Penalty APR

A penalty APR is a higher interest rate, often near 30%, that a card can charge after you pay late: on new purchases with 45 days' notice, and on existing balances once a payment is 60 days late.

Under the CARD Act, if the penalty rate is applied because of a 60-day late payment, the issuer must restore the old rate after six months of on-time payments. Not every card has a penalty APR.