Dear Credit Card Adviser,
I read your articles all the time. I have noticed there are a few articles regarding the Credit CARD Act that confuse me, and I am sure they do the same to others. What I would like to know is can a creditor raise your APR for being only 30 days late? Many articles say it can’t until you are 60 days late, but others say that it can when you are 30. Please help clear this up.
— Paul

Dear Paul,
A credit card issuer cannot raise the interest rate on an existing balance if the cardholder is just 30 days late with a payment. The Credit Card Accountability, Responsibility and Disclosure Act, most of which went into effect on Feb. 22, 2010, prevents credit card issuers from hiking the interest rate on an existing debt except in four circumstances. One of those exceptions is if the payment is 60 days past due.

If you are 30 days late on your payment, the rate on your balance won’t increase, but you may face a late fee and a strike on your credit report in the form of a notation indicating delinquency. The reporting of a single 30-day missed payment can cause a high credit score to plummet.

Now, what your credit card issuer can do instead is raise your interest rate on new purchases. The issuer needs only to provide 45 days’ advance notice of the increase. So, while the rate on your existing debt won’t go up if you’re one month late paying the bill, the issuer could hike your rate for new purchases. Make sure to open your mail promptly to stay informed of any changes to your account.

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