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Penalty APR: What Does It Mean and How Can It Affect You?

- Apr 4, 2023 Credit Card Info0 comments

Penalty APR is the increased interest you’ll be paying if you make a late payment on a credit card.

Not every card has a penalty APR, but the ones that do punish you for a late payment, not only do they punish you by charging a late fee, but they also increase the interest rate on your card. 

Important laws to know regarding penalty APR(only for consumer cards)

Here are some of your most important protections under the card act for Penalty Apr:

  • Penalty APR cannot kick in until you are a full 60 days past due 
  • The Penalty APR cannot last more than 6 months
  • The credit card issuer needs to give you a 45-day notice before applying the penalty APR

You can lose your intro 0% APR if you pay late

If a penalty APR kicks in on an intro 0% APR card, not only will you lose the 0% APR offer, but you will pay an even higher interest rate- if your card has a penalty APR. (Not all cards have a penalty APR.)

And as stated above, the penalty APR will kick in only after being 60 days late and can last up to six months (on personal cards). After six months, you will regain your 0% APR if it’s still within the intro period. 

Business cards are worse

The laws regarding penalty APR mentioned above are only for consumer cards. Business cards do not have these protections, therefore you have to be super careful on business cards to pay on time, as a penalty APR can kick in much faster (immediately) and last much longer (even past six months) .

Not all cards have a penalty APR

Not all credit cards have a penalty APR, some banks try to be nice and don’t punish you with a penalty APR. 

Luckily for you, we actually have listed by every card if it has a penalty APR or not (thank us later:)  Reference to the picture to see where to find it.


Being on top of your bills and paying on time is super important but it’s even more important when you have a high balance on an intro 0% apr card and you dont want to lose the 0% APR offer. So always be on top of your bills, pay on time, and stay out of trouble. 

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Sam Sam has nearly a decade's worth of experience educating his many readers on everything credit. Sam spends his days checking out credit cards for a full report, from the minute benefit details to the shebang of welcome bonuses. Plus studying the ins and outs of building proper credit. It’s his favorite pastime and he loves sharing it with others.

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