credit cards

What is a penalty rate?


What is a penalty rate?

The 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


Show Bankrate's community sharing policy
          Connect with us
Product Rate Change Last week
Balance Transfer Cards 15.80% --0.00 15.80%
Cash Back Cards 16.42% --0.00 16.42%
Low Interest Cards 11.09% --0.00 11.09%
Credit cards on a table

Get advice for managing credit cards, building your credit history and improving your credit score. Delivered weekly.


Credit Card Blog

Jeanine Skowronski

Staples: 1.16M cards compromised

Another data breach has become official in 2014. Staples confirmed on Friday that  approximately 1.16 million consumer credit and debit cards were compromised as part of an incident it has been investigating since October. According to Staples, hackers obtained cardholder names, payment card numbers, expiration dates, and card verification codes, after sneaking malware onto the point-of-sale systems  ... Read more

Partner Center

Connect with us