In the past, consumers who were behind on paying off their credit card debt could have expected to be hit with a penalty interest rate that was much higher than their basic APR. However, those days may soon be forgotten.
According to a report from the Associated Press, Wells Fargo recently announced it would eliminate all penalty interest rates – which it traditionally held at 27 percent – for accounts that were more than 60 days delinquent after July 6. Any accounts that incurred penalty rates prior to that will still be required to pay theirs until that debt is eliminated.
The report said that Wells Fargo will still maintain late fees of $25 or the minimum payment due, whichever is less. That late fee can escalate to $35 if another late payment is made within six months of the first one.
A recent report from Mintel Comperemedia found that despite experts’ predictions, many banks, like Wells Fargo, have not adopted practices that could have been harmful to consumers in the wake of the new credit card laws.