In These Times has a great report about the predatory lending schemes currently employed by the credit industry, often on people who thought they’d been responsible, careful debtors. Changes are happening in the wake of the current recession crisis that many people aren’t figuring out they’ve been gamed until they check their credit card bills, only to find whopping interest rate hikes and penalties for things they didn’t even know they’d done wrong. But worst of all is the “Universal default” clause written into many a credit contract:

Killer Credit — In These Times

Universal default is another vicious innovation. If applied, one lender can raise the terms of a loan to the default rate (27 percent, on average) when a customer fails to pay another lender, even if the customer’s record is perfect with the original bank. In theory, a technical error or fraud could trigger rate hikes on every card someone owns, a scary thought considering the average American has seven credit cards in his or her wallet. Roughly half of the banks that issue credit cards have universal default language in their contracts.