How to understand the Universal Default Clause

he Universal Default Clause is a term hidden in your terms and conditions of the credit card agreement you agreed to by taking out a particular credit card. Usually it is in really fine print and is the provision of your credit card agreement which basically says that if you are more than 30 days late on any payment to anyone, the interest rate on your credit card could will go to the default rate which can cause also hurt your credit.

Difficulty: Easy

Instructions

Things You'll Need:

• A credit card

1. 
    

   Read the fine print of all of your credit cards, make sure you don't have something called a Universal Default Clause. If you do you need to be very careful. The majority of people who sign up for credit card terms and conditions. Make sure you read the terms. I can not stress this enough.

2. Never pay your cards late. If this is not an option, make sure that you cancel the cards with universal default clause. This can cause you hundreds of dollars per year in extra interest charges, and your 0% card can go to 30% overnight.

3. Do not use credit cards that have the UDC. Do not support these cards. Take back your financial future by making informed decisions. If a UDC kicks in, call the credit card company and close the account.

Tips & Warnings

• Read the fine print.
• READ THE FINE PRINT.

Resources

• HPM Financial

[rorsich]

on 12/20/2008 Hmm.. Never heard of this one before.

I will keep this in mind when dealing with credit distributors.

Thanks! 5**********