I got a good tip from watching Suze Orman the other night. Consumers don’t realize that when you default on one debt it can affect other credit use. There are a lot of people that are losing their homes due to foreclosure. They feel that the mortgage is hopeless yet they want to keep their credit cards for emergency use. While this is understandable, consumers fail to realize what the impact to their credit is across the board. Your creditors are checking your credit all the time. If they see that you are having trouble on one of your credit accounts, they have the right to raise your credit card interest rate to the universal default rate. It is in your contract. If you don’t believe me, then believe Suze Orman. I’ve seen her tout this fact a few times on her show. Your rates can go as high as 29% just because you are late on your mortgage. The reality is that you need to keep up on everything. If you are having financial difficulty you need to be aware that your credit cards may not be your safety net.
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