ARLINGTON, Va. –, a Web site which tracks different card trends, has reported that big card issuers have once again hiked their so-called “penalty” annual percentage rates which they say they reserve only for cardholders who miss payments. Cardweb reported that these APRs had increased from an average of 23.26% in April 2001 to an average of 25.88% for last month. Since many of these rates are variable, any future increases in the prime rate will drive these rates even higher, in some cases above 30%, the site reported, adding that over the past three years the prime interest rate has dropped from 8.00% to 4.00%, thereby raising the spread of these punitive rates by more than six percentage rates, from 15.26% to 21.88%. The big card issuers have also steadily expanded their definition of what can bring a cardholder into the “penalty” APR, the site reported. Bank One recently raised the interest rate on a employee from 14.24% to 27.74% due to “bankcard balances increased to (sic) fast” and “balances on bankcard are too high,” the site reported. The employee had no late payments or over-limit infractions with any creditors. According to the site, Providian charges the highest punitive interest rate of 29.99% or prime +25.99%. MBNA, a leading buyer of credit union card portfolios, does not disclose its penalty APRs on applications but recently raised its penalty APR to 24.99%, the site reported.

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