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6.Still another “hook” some of these guys can get you with is the “Universal Default Clause”, a practice that I find almost unethical and one that should be made illegal. This nifty little gizmo may trigger interest penalties for a change in your credit score ( when, for example, your debt to available credit suddenly skyrockets, possibly caused by this strategy, or even when you are late with a bill to another lender ).

Yowza! Murph, I'll bet that's it.

It would be so easy for the bank to implement a process whereby a customer's use of one of those 0% cash advance checks would automatically trigger a review of the customer's current credit score, debt-to-income ratio, or percentage of debt to available credit.

The bank could then compare those measurements against the scores and ratios at the time the customer originally applied for the card. If the current figures represent a greater credit risk to the bank, it would represent a "change of circumstances" rendering the original underwriting no longer adequate to protect the bank's interest.

Such a "universal default" or "material change of circumstances" clause would be a clever way to escalate rates if an event triggered a comparative underwriting review. The exercise of using a 0% cash advance check would represent exactly the sort of trigger event that would justify a look-back or comparative review.

Credit card issuing banks have so many ways in which to screw customers. It makes one almost want to start a new bank or buy an existing one just to be able to figure out clever ways to play games with credit card customers.

Wanna start a bank (headquartered somewhere like South Dakota, where the regulations are banker-friendly)? I'll be glad to serve on the board and help with writing the credit card contracts if you'll be willing to move to South Dakota (if the rules happen to require at least one employee and/or location in the state).
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