 TITLE: What Is a Penalty APR? CONTENT: How Is the Penalty APR Calculated?\n----------------------------------\nSimilar to how variable APRs on credit cards work, a penalty APR may be based on a fixed interest rate plus a benchmark rate. Combined, the penalty APR is often at or near 29.99% APR. Cards may also cap the penalty APR at 29.99%, even if a rise in the benchmark rate would otherwise lead to a higher APR.\nThe penalty APR will replace your standard APR, and your account will accrue interest in the same way as before but based on the new rate. Generally, card issuers will divide the APR by 360 or 365 to find your daily periodic rate, and then apply this rate to your daily balance to determine how much interest accrues. END