Terms and Conditions
What is a default APR?
A default APR (Annual Percentage Rate) is used in certain cases when you fail to make the minimum payment on your credit card account, or exceed your credit limit by a certain amount. The Default APR is higher than the other APRs for your account.
Factors considered in determining the Default APR include the frequency and severity of account defaults and concerns and any other indications of risky account use. The maximum default APR that a credit card company can charge you is limited by federal and state laws, but even then it is very high!
Example:
A typical Default APR is described like this in the Terms and Conditions:
The Prime Rate plus 23.74% (currently 31.99%) and may vary.
Note: the Prime Rate is the interest rate banks charge their best customers.
See also:
What is an APR?
What is the difference between a variable APR and a fixed APR?
What are the finance charges? How are they calculated?
What is a minimum finance charge?
What is an introductory APR?
Last update: 2006-09-25 16:53
Author: BKO
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