Posted by Karl Denninger
Read that white part carefully, and then make sure you read the inverted part.
If you:
- Exceed your credit line.
- Do not pay on time (even once)
- The bank believes you will be either unwilling or unable to pay because of "information they receive" (like, for instance, because your credit report discloses you didn't pay someone else?)
The bank can immediately close your account without notice AND DEMAND YOU PAY THE ENTIRE BALANCE ON THE ACCOUNT IMMEDIATELY.
Oh, and when you can't (because you thought you had time to pay) you are then in default again for not paying "on time" and they can sue and add attorneys fees and costs.
I thought this crap was going away?
This, by the way, is from Chase, I have the entire section of the statement (all pages), and is claimed to be effective on 22 February.
So much for the CARD act banning practices like this, eh?
This is effectively a "CALL" option on your credit card. This "feature" is why when I ran MCSNet I refused to ever accept a bank credit line for any purpose whatsoever for the company - they all had this sort of tricky crap in them somewhere. Every one. In each and every case such a clause gives the bank the right to force you into bankruptcy if you ever actually use the credit for anything other than as a cash-management tool (that is, as a means to pay for something over time), as they can declare the line in default any time they'd like and accelerate repayment, demanding the full balance. You either have it (in which case you didn't really need the credit, right?) or you're bankrupt - at their sole discretion.
TELL THE BANKSTERS TO SHOVE THIS CRAP UP THEIR BUTTS - WITHDRAW YOUR MONEY AND REMOVE YOUR BUSINESS FROM ANY LENDER WHO HAS SOMETHING LIKE THIS IN THEIR AGREEMENTS - ALL OF IT.
I warned people a year ago to get out of debt, especially revolving debt or any other sort of credit where the terms could be changed on you, in my "Ten Things" Ticker of June 8th of 2009.
This sort of trick is why.
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