No one wants a penalty APR. So, here’s a rundown of everything California consumers should know about penalty APRs and how to avoid them.

Here’s yet another reason why California consumers should manage their credit cards well and make all payments on time. Penalty APRs make credit card use more expensive. Your APR – or, annual percentage rate – refers to the percentage of your credit card balance the card issuer charges as interest on an annual basis. Sometimes referred to as interest rates, APRs vary widely. In fact, depending on their credit scores, credit card users may have 0% APRs, 29.99% APRs, or any number in between. Then, when consumers in California break certain rules, issuers normally impose penalty APRs. These interest rates are normally much higher than regular APRs. So, California credit card users should manage their accounts responsibly in order to avoid them altogether.

A Rundown of How Penalty APRs Work for California Consumers

Even if a California consumer opens a credit card with a very competitive APR, poor credit management can instantly inflate an interest rate. Depending on your credit card issuer, penalty APRs may kick in after payments are 60 days overdue. They might also take effect when you go over your spending limits. Sometimes, credit card companies enforce penalty APRs when payment checks bounce.

Normally, penalty APRs imposed in California apply to current balances and future purchases. And they can reach as high as 29.99%. Unfortunately, if a credit card user carries a high balance and gets hit with a penalty APR, it can cause their minimum monthly payments to skyrocket. Then, if they can no longer afford to keep up with their payments, they could incur more delinquencies and credit score damage. Eventually, if California credit card holders default entirely on their accounts, their credit scores drop significantly.

Luckily, the CARD Act of 2009 requires credit card issuers in California and other states to lower APRs on existing balances back to the regular rates. Yet, some credit card companies continue to impose penalty APRs on future purchases. You can find your issuer’s policies on penalty APRs in the terms and conditions section of your credit card agreement.

How California Consumers Can Avoid Penalty APRs

If your credit card company imposes a penalty APR on your account, you can pay off your balances every month to avoid interest charges altogether. Or, California consumers with good credit scores can transfer balances to new credit cards with regular APRs.

Of course, the best way to avoid a penalty APR is to follow the terms and conditions in your credit card agreement, and make every payment on time. This type of responsible credit management will also protect your credit score. Another way for California consumers to maintain or improve credit scores is to keep their credit card balances at or below 30% of their spending limits. Those shows potential lenders that you are financially stable and not too dependent on credit cards.

Finally, one of the best things that you can do to protect your good or improving credit score is check your credit reports regularly.

How California Consumers Can Protect their Credit Scores by Regularly Checking their Credit Reports

Even if you do everything right with your credit card accounts, loans, and other bills, your credit score can unexpectedly drop. How? Frequently, creditors and the credit bureaus mishandle and misreport consumer information. These organizations make mistakes, and these mistakes become errors on California credit reports. Then, often, these credit report errors are significant enough to bring down credit scores.

Fortunately, the Fair Credit Reporting Act (FCRA) entitles California consumers to accurate credit reports. Yet, it’s up to you to check your credit reports at least every 12 months, and find these inaccuracies. This is how often the Fair and Accurate Credit Transaction Act (FACTA) allows you to request a free copy of your credit report from each of the major credit bureaus. You can request credit reports at,, and Or, you can get all three credit reports in one place at

Then, if you find that mistakes and errors are bringing down your credit score, contact Credit Repair Lawyers of America. From here, our team of credit pros will handle the entire dispute process for you, and we don’t stop there. If creditors or the credit bureaus don’t comply with our requests, an experienced credit attorney will file an action on your behalf – for Free. Either way, when you call us or fill out the contact form on our website, your get clean credit reports, but you never pay anything for the work we do.

The Free and Legal Way to Get Better Credit in California

Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.

Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (855) 956-2089 or sending him a message through our contact page.

For more information about Free Credit Repair, please visit