Should universal default be illegal?

[I spent the winter writing songs about getting better]

This is a practice where if someone who has multiple credit cards misses a payment on one, the other companies increase their interest rates on them.

It's basically a form of predatory lending, and Keith Ellison has sponsored a bill to ban it, that I support.

[opebo]

It should be required of creditors that they keep such information completely private - no one else need know if you 'default'.

[7,052,770]

Well the obvious answer is don't have a credit card (I don't have one and don't intend to ever get one), but yes, universal default should be illegal.

[Bandit3 the Worker]

I can't believe this isn't illegal already.

This is clearly a form of racketeering.

[MaC]

credit as a system should be abolished in it's entirety.  That said, it's a pretty mean thing to do, but not all that different than other forms of price discrimination.  I say keep it legal-until I hear a convincing argument otherwise...

[Gabu]

Why is it being done at all?  I don't understand the logic behind it.

[tik 🪀✨]

Why is it being done at all?  I don't understand the logic behind it.

they make more money

[MasterJedi]

I could support this.

[WalterMitty]

while i think it is kind of low down, i dont think it should be illegal.

you have to read the fine print before agreeing to take a card.

[Gabu]

you have to read the fine print before agreeing to take a card.

On that note, I also think that fine print should be illegal.

[Small Business Owner of Any Repute]

Customers should vote with their wallets, and not take credit cards from companies that engage in such practices.

That being said, credit card companies should be allowed to deny new credit purchases or raise interest rates *on new purchases* if you default, miss payments, or otherwise show yourself to be an increased credit risk.  That seems like fair game.

[MODU]

Why is it being done at all?  I don't understand the logic behind it.

Risk.  When you sign up for a credit card, you are accepting the terms of the contract, which includes the scaled interest rates depending upon missed payments.  This covers the additional risk the credit company is assuming by giving you a card.  They can deactivate your card initially without raising your interest rates, forcing you to call in and reactivate it and notifying you that you are now in a higher rate bracket, but they aren't required to since you are suppose to be responsible enough to handle your own finances.  Now, is it abused by the credit companies?  I'm sure it is in some cases.  However, you as the credit card user are the only one to blame for poor credit purchases/payments.

[Jake]

Why is it being done at all?  I don't understand the logic behind it.

If you default on a payment, you're a bigger risk to default on your other card's payments, and they would raise your interest rates just as they would if you had missed a payment on their card. I don't see the problem. Charge as much as you can comfortably pay, keep your credit fine, and nothing happens.

[John Dibble]

Why is it being done at all?  I don't understand the logic behind it.

If you default on a payment, you're a bigger risk to default on your other card's payments, and they would raise your interest rates just as they would if you had missed a payment on their card. I don't see the problem. Charge as much as you can comfortably pay, keep your credit fine, and nothing happens.

And you probably shouldn't have more than a couple credit cards anyways.

[Ban my account ffs!]

And don't apply for cards and get them just to charge on it once in order to save money or whatever.  That doesn't look good on your credit report.

A good rule of thumb when making a credit purchase is to ask yourself "could I write a check for this?".. if you can't pay for it with cash, don't charge it.  And never put gas or groceries on a credit card.

[Gabu]

Why is it being done at all?  I don't understand the logic behind it.

If you default on a payment, you're a bigger risk to default on your other card's payments, and they would raise your interest rates just as they would if you had missed a payment on their card. I don't see the problem. Charge as much as you can comfortably pay, keep your credit fine, and nothing happens.

After thinking about it, it does actually make sense.  Thanks for the explanation.

[The Constitarian]

This is all part of your credit score.  By the logic behind making it illegal should it be illegal for a bank to turn down giving a loan to a person just because they didn't pay back a car loan at another bank.

[Jake]

Basically the only thing I use my card for is gas and internet purchases (Amazon, Ticketmaster). It's just so much more convenient to by gas off the card rather than walk inside and wait in line.

[??????????]

Basically the only thing I use my card for is gas and internet purchases (Amazon, Ticketmaster). It's just so much more convenient to by gas off the card rather than walk inside and wait in line.

Agreed. Carrying large sums of cash on the road is risky business.

[I spent the winter writing songs about getting better]

That's why I have a debit card, which I use far more often. I only use my credit card for large purchases I don't have the money for and need to get done, which mostly means car repairs. Unfortunately this alone has driven up quite the debt, with one in particular costing $1300. I still make my payments all the time though, but I often have to "cheat", by charging my rent to my credit card, and then making a payment for the amount of my rent if the monthly min. payment is too high.

[bullmoose88]

Just make sure that if you have to make large credit purchases (ones you couldn't afford otherwise), that they be absolute necessities. And pay them off quickly, no minimum payments BS (if you can).