Credit Cards > Tools > Glossary > U-terms > Universal default

Credit Card Glossary: Terms and Definitions

Confused by credit card terms?'s glossary of credit card definitions will help. From account holder to Regulation Z, we have defined the most-common and most-confusing credit card terms.

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Universal default
Universal default is a common practice among credit card issuers that allows them to increase cardholders' interest rates for any change in risk profile with any lender. Under universal default, credit cardholders who fail to make timely payments to other creditors -- such as other credit card issuers, utilities, car lenders, landlords or mortgage lenders -- can see their rates raised by other creditors, even if they were never late in paying those other creditors.