Your credit score determines a lot more than what interest rate your mortgage will be. It will affect how much you pay for insurance (if you have bad credit, you're more likely to commit fraud), if you can find a place to live (many apartment complexes check credit ratings to determine whether you are likely to pay your rent) and what jobs you can obtain (companies check credit reports to determine if you will be a good employee). If you accumulate credit card debt and lower your credit rating, you can expect to pay significantly more money than your friends who have good credit ratings. 2. They can come with universal default.
Universal default basically states that if you make a financial mistake somewhere and it gets onto your credit history, the credit card company has the right to raise your interest rate to its highest level. You read that correctly. It doesn't matter if the issue on the credit report has nothing to do with your credit cards. If you make a late payment on your garbage bill, your credit card rates may jump from their current rate to more than 30%.