Universal Default

Everyone goes bankrupt. The end of commerce. The lights go out. Complete descent into barter and barbarism. Universal default.

Actually, the term isn't as dire as all that. However, it can lead to higher interest rates on your credit cards, if you're not careful about payments. So...almost as bad.

The basic concept of universal default is that one credit card company will react to things that happen at other lenders. So if you're late with a payment to one place, every place could increase your interest rates.

You have a credit card and an outstanding loan for your scooter. You fall behind on your scooter loan and they report it to the credit bureaus. You've kept up with your credit card payments, despite your troubles with the scooter loan. However, it doesn't really do you any good. The credit card has a universal default clause. Since you were late with the scooter loan, they have the right to jack up your interest rates. Default in any place is functionally the same as a default on your credit card, as far as rates go, even if you're diligent about payments. Universal default.