Buried in the fine print of your credit card application, agreements, and correspondence from the card company are provisions that can cost you plenty. Here is one trap to look for in tiny type. An attractive low interest rate can disappear for the slightest infraction, including a late payment. Sometimes even a late payment on another card will cause your rate to go up.
Most credit card issuers today charge late fees, sometimes even if borrowers are only one day late. In addition, many also raise your interest rate if you are late with a payment. This new rate can be much higher than what you’re paying now—especially if you have a low introductory promotional rate. It is not uncommon for these so-called "penalty APRs" (annual percentage rates) to reach 25% or even 30%.
If your interest rate increases to a high penalty APR following a late payment, contact the creditor immediately and ask that the interest rate, as well as the late fee, be reversed. If this is a one-time event and if you have been a customer in good standing, the creditor may be willing to do this to keep you as a customer.
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