Which term describes an elevated interest rate due to delinquency?

• A. Penalty APR
• B. Intro APR
• C. Standard APR
• D. Purchase APR

Answer: (A)

Penalty APR describes an elevated interest rate that a card issuer applies after delinquency, such as a late payment. When you miss a due date, the issuer may raise the rate to a higher penalty level, and this higher rate can apply to existing balances and future charges depending on the terms. The other terms don’t describe this situation: an intro APR is a promotional rate for new purchases for a limited time; the standard APR is the ongoing rate when there’s no delinquency; the purchase APR is simply the rate applied to purchases, typically the regular rate rather than a delinquency-triggered penalty.