How To Avoid Penalty Rates On Your Credit Card 

You might keep a couple of credit cards in your wallet and kind of use them willy-nilly, not realizing how important it is to have a credit card spending and management strategy that’s smart and consistent. After all, not paying regularly and on time can lead to incurring harmful penalties. Penalty rates are enacted by your credit card company as a punishment to keep you accountable for paying your credit card bills on time. Sometimes, the penalty can apply to your account indefinitely. Other times, you can go back to the APR you had when you opened the account in as much as 6 months.

The penalty rate is enacted when you miss payments for 60 days or more, exceed your credit limit, or if your monthly payment doesn’t process properly and gets kicked back to your bank. If you’re diligent about your payments and make them on time and reliably, you’re probably not in bad shape in the eyes of credit card companies and lenders. 

It’s just good practice to pay your credit card bills on time and in full—not just the monthly minimum—because you won’t fall behind if you make payment a necessity. The more you can automate your payments so you don’t have to worry about them, the better. Credit card default rates are rapidly increasing to take advantage of a financially insecure and credit-card dependent audience, since many Americans today wrongly view their credit cards as free-flowing money without consequences, or rack up the maximum to cover emergencies.

Want to know more about penalty rates on your credit card and what they mean? Contact someone at Cain & Daniels today for more information. 

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