Released: June 01, 2007

Bad times for credit card owners

Source: Finance24.com

Credit-card providers appear to be moving “universal default clauses” - where interest rate increases are based on the way customers handle other credit accounts - deeper into their disclosures, making it harder for consumers to determine just what they are facing in their credit account.

According to the 2007 Credit Card Survey released last week by Consumer Action, a nonprofit education and advocacy group, a growing number of card issuers now fold universal default into the “any time, any reason” change of terms disclosures.

That may be appropriate, because universal default allows the issuer to hike rates at any time and for any reason, but it also moves disclosures from the top of the form into the meaningless, jargon-filled bottom, according to Linda Sherry, Consumer Action’s director of national priorities, who spoke in a radio interview with Chuck Jaffe, MarketWatch senior columnist.

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