Originally published February 7 2005
Late credit card payments can spell trouble, even on unrelated accounts, consumer activists warn
by Mike Adams, the Health Ranger, NaturalNews Editor
Consumer activists want to make sure you know that credit card companies these days are looking for any excuse to raise your interest rates. So, they warn, if you happen to forget a single payment on, say, your Best Buy credit card, you will likely end up paying higher interest on all your other cards – no matter how diligent you've been at paying your bills.
A single late payment charge could ripple through all your unrelated accounts.
A late payment on one account could cost you higher rates and fees on all your accounts -- from your credit cards to your auto insurance.
More and more companies are peeking at credit reports regularly to justify raising interest rates or increasing credit limits.
Some of the biggest credit-card companies have started aggressively penalizing customers who show signs of trouble anywhere in their credit reports.
But one black mark from any creditor could trigger a rate hike.
So if you fall behind on your Sears bill, the interest rate on your Citibank credit card could shoot up.
A justification for hiking rates "Why should that matter?"
Ninety-two of the 100 largest personal auto insurance companies in the country use credit data in underwriting new business, according to a study by Conning & Co., an insurance research and asset management firm.
"A consumer with bad credit is going to pay 20% to 50% more in auto insurance premiums than a person who has good credit," says Clarence Smith, assistant vice-president at Conning & Co.
Just how big an effect your credit record has on your auto insurance bill varies -- based on the state you live in and the insurance company you choose.
Someone with a flawed driving record and clean credit record could actually end up paying less for auto insurance than someone with a spotless driving record and a spotty credit record.
Insurance score secrets Your auto insurance company doesn't actually peek at your credit report.
Yes, it could give you a sense of how a single auto insurer rates your credit record, but that's it.
Get in the habit of paying bills as soon as they arrive.
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