Most consumers are aware of the importance of their credit report. This document, offered to consumers and lenders by the three major credit bureaus, offers a fairly complete list of financial transactions and debts incurred by a consumer. Lenders examine the report, along with the associated FICO score, to determine whether a consumer is worthy of receiving additional credit or loans. What many consumers may not know is that credit card companies regularly check their credit reports, and unfavorable entries may result in a higher interest rate on their credit cards.
We have previously noted that many credit card companies employ something known as a "universal default clause" in their terms of service. This clause allows the company to raise interest rates on the customer's card if the customer pays bills late. A late payment to the phone company could result in a higher interest rate on the Visa card. Most companies also allow themselves the latitude to raise their customers' interest rates for any reason at all. With this in mind, the credit card companies tend to run occasional credit checks on their customers, often raising rates if they notice any activity that, in their opinion, makes the customer a higher risk. This might happen even if the customer has a history of paying his or her credit card bills on time.
The sorts of things that may create a "risky" client include taking out additional loans, additional credit cards, or building balances on existing cards to at or near their limits. The companies justify this activity by saying that consumers who do these things create greater risk for the lender, and these costs must be passed on to all of their customers. The problem for the customer is that these higher interest rates are often assigned without warning. The new rate applies to existing balances, too. An interest rate hike today could mean that the television you bought last fall has suddenly become more expensive.
What can consumers do? Keep an eye on your credit card bill and your credit report. You can receive a copy of your credit report, for free, at http://www.annualcreditreport.com. As for your credit card bill, watch the interest rate. If it abruptly changes to a higher rate, call your credit card issuer and ask them about it. They will often reduce the rate if you call and complain. If not, your only option may be to shop around for another card.
?Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to establishing credit, debt consolidation and credit counseling.
executive chauffeured services Bradford .. Madison to Airport carOne of the simplest ways to improve your professional image... Read More
Are you a check fanatic? Don't worry, you aren't alone.... Read More
Here are some tips that can help you save money... Read More
If you, like most people, have not seriously considered what... Read More
It doesn't take much for you to get behind on... Read More
1. If you have your haircut every 3 weeks, try... Read More
This investment retirement account (IRA) is useful to you as... Read More
The judge had to ask the question, and we had... Read More
In this age of information, keeping track of your finances... Read More
Sorting out your personal finances can be a tricky and... Read More
I have been a loyal user of Quicken(R) for more... Read More
Debt levels are at an all time high in the... Read More
Are your financial muscles well toned and healthy or flabby... Read More
Your boss has just informed you that your department is... Read More
Australians, in general, constitute some of the worst savers in... Read More
What is it about being frugal, why do it at... Read More
Of course, these don't have to be done in any... Read More
On the other hand, there are those people who are... Read More
The lists of bank and savings accounts that are available... Read More
Despite how easy it is to balance a checkbook, very... Read More
If you've been thinking about filing for bankruptcy, your best... Read More
Many don't realize that our basic utility bills provide the... Read More
To save on food, be an opportunist. Buy what you... Read More
Next to our physical health most of us are primarily... Read More
Do you have a 401(k) retirement account? Are you vested... Read More
O'Hare Chicago prom limo ..Finding a stable and secure income that will come year... Read More
Have you ever wondered what it would be like to... Read More
Would you be interested in freeing up 10% to 15%... Read More
Have you seen the recent article on a new "green"... Read More
The first step to financial success lies in knowing your... Read More
As the saying goes: "Buyer Beware". If you see ads... Read More
Six Scholarship judges were sitting around an oval table. Forms... Read More
I've been sharing the following idea with people for a... Read More
On the other hand, there are those people who are... Read More
Just about everyone has a checking account. Checks present easy... Read More
With prices increasing all the time, saving money can be... Read More
I think most of us have at some point in... Read More
Are you a check fanatic? Don't worry, you aren't alone.... Read More
One of the biggest challenges facing black RELATIONSHIPS today are... Read More
There have been an estimated 9.9 million victims on America... Read More
Saving money is not easy and is made more difficult... Read More
If you die without making a Will in the UK,... Read More
If you have a 401(k) account, it can be very... Read More
The British government at the beginning of this year officially... Read More
With almost two thirds of university entrants from England and... Read More
It is estimated that we, as consumers, waste an average... Read More
For me, the most terrible time of each month is... Read More
Future financial success is not a guarantee that any one... Read More
The cries are heard from the distance, "I need help... Read More
Things are so expensive these days. We seem to be... Read More
Personal Finance |