Lisa asked:
I know someone who pays promptly on a low interest credit card. She has another credit card not related to the promptly paid card that has had late payments, gone to collections and has shown up on her credit report.
The question is: Can the Promptly paid credit card account raise the interest rate on that up to date card because of the unrelated bad payments on another card?
I hope I’m explaining this correctly. Thanks in advance for all responses.
VENETTA
Comments
Yes they can.
Credit card companies do reviews of their customers credit to see how they are paying other people and when they see what you described they can and do raise their rates. It’s done under whats called the universal default clause.
Yes. Card issuers look at your overall credit worthiness (not just with them) when deciding how to treat you. Late payments are a warning sign.
Yes they can and do. They monitor your credit history closely and I think sometimes are just looking for a reason to get out of the low interest rate they promised you in the beginning. Discover card is notorious for this.