Additionally, CardHub examined the issuers’ explanations on how other triggers, such as making one late payment or going over a credit limit, would affect new transactions. Bank of America, HSBC and the Federal Reserve received poor ratings for failing to explain that the penalty APR could only be applied to new transactions (as opposed to existing ones) as long as cardholders were not 60 days delinquent on payment.
Finally, issuers were evaluated on how well they explained to card holders how the non-penalty APRs could be restored. American Express, Bank of America, Capitol One, Citi and Discover failed to mention that, by law, they were required to remove the penalty APR on prior purchases once the card holder has made the minimum payment for six consecutive months.
Prospective credit applicants can view the rest of the study here before deciding which application to fill out.
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