Finance Quick Answers
I was late on my credit card payment and the interest rate increased. How can this be?
Buried in the fine print of your credit card application, agreements, and correspondence from the card company are provisions that can cost you plenty. This is one trap to look for in tiny type. The attractive low interest rate can disappear for the slightest infraction. Virtually everyone has paid a credit card bill a few days late. Most people are aware the issuers charge late fees, sometimes even if only one day late. Now some credit card issuers raise your interest rate if you’re even one day late with a payment. This new rate can be much higher than what you’re paying now - especially if you have a low promotional rate.
Consider having your card issuer or bank deduct a set
monthly amount directly from your bank account. You will
still get a bill from the credit card company. The fee
for these automatic payments should be nominal (or
Source: Bottom Line Personal - Oct. 19, 1997
Sandra McKinnon, Consumer & Family Economics Specialist, University of Missouri Extension
Cynthia E. Crawford, Ph.D., Consumer & Family Economics Specialist, University of Missouri Extension
Last update: Monday, July 28, 2008