Consumer Payment Card News

Rate Burn

For the first time in the U.S., punitive interest rates charged by the top U.S. general purpose credit card issuers will slip past the 31% barrier. Due to the increase in the prime rate this week to 7.25%, Chase, Citibank, and Bank of America will begin charging some cardholders next month an annual interest rate of 31.24%. The three issuers set their rates at prime +23.99% for cardholders who miss payments, exceed the credit line or whose credit score deteriorates. However, most issuers consider a number of factors before imposing their highest rates on cardholders. For example, the length of time your account has been open; the existence, seriousness and timing of defaults; and other indications of your account usage and performance. Make sure you play by the rules or you can get truly burned.

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