Penalty Repricing

“Penalty repricing” is when our credit card’s interest rate goes up because we’ve either paid the bill late or failed to pay it at all too many times.

How many times is too many? It depends on the card, but sometimes it only has to happen once, so we should definitely check the fine print on whatever’s in our wallet. Just skim down to the part about the “penalty APR.” That’s where they tell us what our penalty interest rate will be.

Spoiler alert: it’s not going to go from 17.99% interest to 18.01%. No, folks, it’s a lot more likely to go from 17.99% to, say, 29.93%. And that’s not even taking into account late fees we might be charged, sometimes to the tune of $40 per late payment. Credit card companies don’t mess around with delinquent payments. That’s why it’s oh so important to always—always—make at least the minimum payment due, and to make it on time.