A Universal Default is a clause in a credit agreement that allows lenders to increase the interest rates if the borrower defaults on an agreement with another lender.

Universal default lets lenders raise interest rates if the borrower defaults with another lender.

What is a universal default clause? A universal default clause lets lenders increase interest rates if the borrower defaults with another lender.

What is a cross-default clause in a bond? A cross-default clause in a bond is a provision that triggers a default if the issuer defaults on another financial obligation, potentially leading to accelerated payments.

Why should you avoid a credit card that has universal default? You should avoid a credit card with universal default because it lets the issuer raise your interest rate if you default on any unrelated credit obligation.

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Universal default lets lenders react to borrower defaults by changing interest rates, managing risk.

Universal default allows lenders to adjust interest rates when borrowers default, effectively managing risk.