I am never surprised when clients in divorce cases I handle have incredible credit card debts. Marital stress leading to divorce often results from financial stress. It’s important for my clients to know more about their credit card debt and to see how they might avoid problems in the future. An article from the March 10, 2007 Washington Post makes clear how credit card companies often have unfair policies that compound credit card debt in ways that consumers do not predict or expect.
According to the Washington Post, credit card companies frequently don't play fair even when a consumer does everything according to their terms. An industry practice called "universal default" allows the credit card issuer the right to hike the consumer’s interest rate if he’s late or overextended on another credit account. The article also explains the practice of two-cycle billing.
Recently a Senate permanent subcommittee on investigations took a look at certain credit card industry practices resulting in outrageous fees and interest rates for consumers. One witness testified about how a $3,200 charged resulted in late fees and interest rates that compounded his bill so that the consumer, after making $6,300 in payments since 2001, still owed $4,400 as of February 2007. To read the entire article, click here.
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