What is a penalty rate?
The Bankrate.com financial term of the day is: "Penalty Rate"
If you're one of those people who can never remember to pay credit card bills on time, your plastic can be a lot pricier. Credit cards come with a higher penalty rate that replaces the usual interest rate, typically after a couple of late payments, though sometimes all it takes is just one. The penalty rate will be several points higher than the card's ordinary annual percentage rate.
Being fashionably late with your credit card can be a style disaster for your bank account because tardiness can trigger the card's more expensive penalty rate.
To shop for the perfect credit card, visit the credit cards section at Bankrate.com.