What’s my other loans got to do with it?!

I’m a father of two kids and I work as a teacher at a local elementary school teacher in New York. My wife and I each own at least a couple of credit cards. We’re not highly dependent on them and are able to pay off our debt before the deadline. We made sure that we wouldn’t be deep in debt with our credit card because we all know how much they can increase the interest rates the higher debt we incur.

But our credit cards are not the only loans we have. We also have our car and mortgage loans. Back in 2000, we met through tough times when my wife lost her job so I had to support the entire family by myself. We missed our car and mortgage loan payments for about a couple of months but never the ones for the credit card. It was tough times. But after about 6 months, we were back on track.

A month ago, I got my bill and my interest went up from 8.9% to 19.8%! I called them up and questioned the increase since I didn’t miss a payment. The guy on the other line told me that they found out that I failed to pay my car loan for sixty days last 2000. That was 60 days ago! How could they do that?

I got my answer in the documentary I watched online. Turns out, they can charge interest based on our performance in other loans. Bummer.