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Penalty APR is the annual percentage rate (interest rate) your creditor applies to your account if you are late or miss making a payment. It is often much higher than your regular interest rate. If you are less than 60 days late then the penalty APR is usually only applied to new charges. If you are more than 60 days late it can be applied to your total balance. Penalty APR is typically applied for 6 months.

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I think it's a way people get into trouble. If you're already struggling to pay your 'regular' payment and run late, it's going to be even harder to keep up once the new interest rate hits. This kind of game from the cc makes it all the more important to make sure your payments are on time, always, if you use one.
 
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