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What Credit Traps Snag Consumers? - by Alan Woods

Nearly 20 years ago I worked for a small consumer advocacy organization in Washington, DC. Each week we received sacks full of mail from consumers across the country requesting our list of credit cards with low interest rates and no annual fees. If you wanted a low interest rate on a credit card back then, you often had to apply to a bank in Arkansas where interest rates were capped by state law.

Those were the good old days.

Now, interest rates range from zero percent to a high 39 percent. It's tougher to find (and keep) a good credit card than ever before. That's because there are many new traps that can snag unsuspecting consumers.

At the top of the list is the "universal default clause" which allows issuers to monitor you credit report and raise your rate if you are late on any bill that appears on your credit report. One major issuer, for example, will hike a 0 percent rate to 24.99 percent if...

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