Default APR Rates
When it comes to a business credit card, most of us pay a great deal of a
ttention on the intro APR, features, benefits and rewards. Unfortunately, we also do not pay enough attention to the terms and conditions that define whether or not your account is in good standing.
In particular, there is a penalty known as a Default APR (it’s also known as Late Payer APR or Penalty APR). If you trigger this penalty then the interest rate applied to your current balance goes up dramatically.
Now this varies for every business credit card so to make it easy for you I have compiled a list of the default APR rates and triggers of twenty major business credit cards:
American Express
Penalty APR – 27.24% (Prime Rate + 23.99%)
Four cards fall under this rule:
- Starwood Preferred Guest Business Credit Card
- SimplyCash Business Card
- Lowe’s Business Rewards Card
- Jet Blue Business Card
Default trigger – The Penalty APR will apply to your account if you make 2 or more late payments in a 12-month period; you go over your credit limit 3 times in a 12-month period; or you make a payment that is returned.
If the Penalty APR is applied, it will apply for a minimum of 12 billing periods in a row, and will continue to apply until after you have made timely payments, with no returned payments, and without going over your credit limit for 12 billing periods in a row.
Applied Bank
Default APR – 29.99%
One card falls under this rule:
Default trigger – With this card if any minimum payment is not received by the last day of the billing cycle in which it was due, then the default APR rate will apply beginning the first day of the next billing cycle.
Capital One
Penalty APR – 29.4%
Six cards fall under this rule:
- No Hassle Miles
- Preferred No Hassle Miles
- Business Platinum
- Venture for Business
- Business No Hassle Cash Premier
- Business No Hassle Cash
Default trigger – The Penalty APR may be applied to your account if you make a late payment. If APRs are increased for a payment that is more than 60 days late, the Penalty APR will apply indefinitely unless you make the next six consecutive minimum payments on time following the rate increase.
Chase Bank
Default APR – 29.99%
Three cards fall under this rule: 
Default trigger – If you fail to make your minimum payment by the due date, exceed your credit line, or make a payment that is returned unpaid on this account or any other account or loan you have with Chase or any of its related banks your APR goes up to 29.99%.
If an APR is increased for any of these reasons, the Default APR will apply indefinitely to all outstanding balances and future transactions on your Account.
Citi Business
Default APR 23.99% – 29.99%
Four cards fall under this rule:
- AAdvantage Visa Card
- AT&T Universal Business Rewards Card
- AAdvantage Master Card
- World MasterCard.
Default trigger – All your APRs may automatically increase up to the default APR rate if you default under any cardmember agreement that you have with Citi. This includes failing to make a payment with Citi when due, exceeding your credit line, or you make a payment that is not honored.
Factors considered in determining your Default APR may include how long your account has been open, the timing or seriousness of a default, or other indications of account performance.
Discover
Default APR – 28.99%
Two cards fall under this rule:
- Discover Business Card
- Discover Business Miles Card
Default trigger – If you are late making a payment or your account is over the limit twice, they may increase your APRs to a Default Rate. Your Default Rates are determined based on factors such as your current purchase APR, your payment history with Discover and your general credit history.
The bonuses, perks and rewards you get from these types of business credit cards are excellent but make it a priority from this point forward to fully understand the pricing and terms and conditions
By doing your homework you can avoid any surprises and prevent your business from falling into the default APR rate trap.
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About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for AllBusiness, a subsidiary of Dun and Bradstreet and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.