Wells Fargo to get rid of penalty interest rates on credit card debt
Many consumers who have fallen behind on their credit card debt payments in the past may have found that their lender hit them with a penalty interest rate that was significantly higher than their standard APR. But one bank will soon eliminate such punishments.
According to a report from the Associated Press, consumers whose cards are issued by Wells Fargo will find that the company’s standard penalty interest rate of 27 percent will no longer be applied to accounts that are more than 60 days behind. Instead, Wells Fargo will cut credit limits or even close down accounts for those that are chronically late.
The report said that the eliminated APRs will only apply to balances as of July 6. Any accounts that picked up penalty rates prior to that date will continue to see them on their bills. Wells Fargo will also continue to charge a late payment fee of $25 or the minimum payment on the account, whichever is lower.
A recent report from Mintel Comperemedia said that contrary to what many experts expected, most lenders have not introduced new, costly practices to make up for the profits lost as a result of the Credit Card Accountability, Responsibility and Disclosure Act.