Credit Cards – What is the “Universal Default Clause”?Written by Charles Essmeier
Most people who carry major credit cards are well aware that interest rates associated with them tend to be higher than for other types of lending, such as home or auto loans. Anyone who has paid their credit card bill late more than once or twice is also aware that doing so may cause interest rate on their card to go up – sometimes by quite a lot. Many credit cards carry interest rates of as much as 20% or 25% annually, and customers who want to avoid interest rates in that range make an effort to pay their bills on time.
What many people do not realize, however, is that up to one third of all credit card issuers now include what is known as a “universal default clause” in their bills. This information, usually disclosed in tiny print on bill that few people bother to read, indicates that interest rate on your credit card may be increased if you pay bills late to other lenders, even if you pay your credit card bill on time.
This means that paying any bill late that could show up on your credit report, such as an auto payment
| | Structured Settlements – Should You Sell Yours?Written by Charles Essmeier
In recent years, it has become more common for victims of accidental injury who accept a settlement from at-fault party to accept a structured settlement instead of a lump-sum payment. With a structured settlement, injured party receives payments over an agreed-upon length of time – five years, ten years, or even a lifetime, rather than receiving payment up front in a lump sum.
There are advantages to this for both parties. The injured party may require constant medical care, and regular payments of a structured settlement guarantee that income will be available to cover medical expenses. For paying party, settlement can be paid by purchasing an annuity, which allows an upfront payment to accrue interest, thereby producing a larger long-term yield from a minimal investment. In many cases, a structured settlement is viewed as a win-win situation for both parties.
There are restrictions on structured settlements that may not suit everyone. Once you agree to accept a structured settlement, you cannot trade it back in for a lump sum payment, nor may you use it for collateral for a loan. What if you want to buy a home and pay cash? What if some other unexpected expense comes up and you simply do not have cash available? Under certain circumstances, you may be able to sell your structured settlement to a third party.
There are companies that are interested in purchasing structured settlements for investment purposes. Perhaps one or more of these companies has already contacted you. They will agree
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