Christian Finance Blog

It’s very refreshing to hear news of a credit card company actually doing something positive once every blue moon. Citigroup, which is the third largest credit card issuer in the U.S., said that it is essentially getting rid of universal default.

Universal default is a clause on credit card agreements where a credit card issuer can raise your credit card interest rate if you default on any other obligations to other lenders. This practice seems to punish you for making mistakes with other lenders. So if you happen to default on a loan that doesn’t even have to be another credit card, all of your credit cards can shoot up to 24% interest and even higher in some states! How fair its that?

Here’s the link to the Reuter’s article.

In a recent article at MSN Money, a study found that 1 in 7 (14.3%)Americans own 10 or more credit cards! The average American has 4 credit cards and the average credit score is 674.

Where do you stand? What’s your FICO credit score? How many credit cards do you have? How many do you carry in your wallet or purse? Leave your comment here. Personally my FICO score is currently 658; down from a high of about 730 (I’ll explain later). I usually carry one Visa credit card in my wallet and my Washington Mutual MasterCard Debit card. I use the Visa for everday purchases which I pay off every month. The debit card is just for ATM use, although I rarely use this unless I’m depositing a check through the ATM.

Now I’m going to explain why my credit score dropped. I’ve got almost 4 grand in credit card debt! I have a MasterCard with $1500 on it at 0% that I’m going to pay off as soon as the promotion is up. I also recently took out a $2300 0% balance transfer from Citi to myself and it’s sitting in a savings account earning 5.25%. I’ll pay that off in 12 months. I have no problem using free money and that’s essentially what it is. As long as you’re disciplined, this is a great way to earn a little interest on the bank’s money which they normally do to you. I wouldn’t suggest this, however, if you’re swamped in credit card debt, for obvious reasons.

If your FICO score is high though and your credit card interest is at 15% or higher, I would give your credit card company a quick call and ask them to lower your interest rate. What’s the worst that could happen? They might say no but more often than not, they’ll lower your rate. And if they don’t, tell them you’re going to do a 0% balance transfer (even if you’re not). They’ll send you to a retention specialist and they will most likely lower your interest rate to keep your business. There’s so much competition out there for your debt that they’re willing to do these things. All it takes is five minutes of your time!