Cross-default clauses are those nasty little traps that credit card companies figured out they could use to boost profits. The idea is devilishly simple: A customer who has been making payments faithfully to Providian, for example, may get into an argument and refuse to pay her phone provider. BAM! Providian ups its 9.9% interest to 29.9%, raking in the profits and wrecking havoc with the customer’s budget. Welcome to cross-default clauses.
This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=1250329