In these terribly hard economic times—massive federal bailouts meant to loosen credit aside—lenders have to do whatever they can to protect themselves, and they are. Since the 1990s, they have been slipping universal default language into their terms and conditions. That allows them to change the terms of your loan (interest rate, credit limit and so on) based on how you do with other, unrelated creditors. Pay late on your Capital One card, the interest rate on your Chase card goes up. Universal default has been around since the heady deregulatory days of the 1990s, but until the recent economic crisis hit, it was not something that regularly came into play. Now it has, but at least it is based on something that the borrower did.
Now we hear of a little tactic that American Express is using. They are examining where you shop. American Express is making the connection between merchants and their customers’ payment habits. Say you own a shop and you have—at least as far as... [Read Full Article]