Beware fine print on credit card statements

The dilemma stems from the relatively new universal default provisions that allow credit card issuers to dramatically boost interest rates if users don't meet certain conditions.

For instance, on some Bank of America-issued Visa cards, users could see their rates jump to nearly 27 percent if they either miss two payments or exceed their credit limit twice within six months.

Consumer Action, a San Francisco-based consumer advocate organization, said some 85 percent of card-issuing banks levy universal default provisions on their customers.

Banking groups say the arrangement allows creditors to better cover themselves against defaulting customers.

But consumer watchdogs say that the default rules extend too broadly across various payment spectrums. The decisions, they note, are largely based on credit agency reports.

In the end, consumers could see higher credit card interest rates -- and higher minimum monthly payments -- if they're late with a credit payment or even, in some cases, a utility bill payment.

Representatives of the U.S. Trustee's Office and the Oregon Attorney General's office said they've fielded no complaints from consumers who've seen their credit bills soar because of universal default rules.

Yet the federal Office of the Comptroller of the Currency warned banks in September that the practice "may entail unfair or deceptive acts or practices and may expose a bank to compliance and reputation risks."

Steve Dixon, consumer advocate for the Oregon State Public Interest Research Group, said his group is hearing increasing concerns about the tactic.

"It concerns us because it could increase your interest for, say, a Visa card even if you didn't miss a payment with them," he said.

"I'd encourage people to make sure there are no universal defaults on their cards, and just read the fine print."

However, a Bank of America customer service representative said the stipulation appears on all of the bank's cards, "even the ones issued to employees."

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