The Chase Slate®, a popular choice on the balance transfer credit card market, will no longer charge a penalty APR to cardholders for paying late, a Chase representative said in a May 19 email.
The change could save some consumers thousands in interest, but it’s not the feature the Nerds like best about the Chase Slate®. Find out why below.
What you need to know about penalty APR
The penalty APR is the interest rate imposed on consumers who fall significantly behind on their payments. A card’s penalty APR — in some cases as high as 29.99% — is usually substantially higher than the regular purchase APR. Although other mistakes may trigger the penalty APR, paying late is the primary reason some issuers levy this rate.
The penalty APR can be applied to existing balances only if a consumer hasn’t made a payment in 60 days or more, according to the Credit CARD Act of 2009. Otherwise, the penalty APR can only be applied to new purchases. In either case, 45 days’ notice is required before the interest rate increase can go into effect.
Also, credit card issuers are required to reassess accounts carrying the penalty APR after six months. They must reinstate the regular purchase APR if the consumer has made six consecutive on-time payments.
Is this a good reason to get the Chase Slate®?
Not having to worry about facing a penalty APR for making late payments might seem like a huge benefit offered by the Chase Slate®, but it’s far from a free pass to be tardy with your bills. For one thing, you’ll end up racking up late fees, which could be as high as $35 a pop, according to the card’s terms and conditions.
For another, your late payments could be reported to the major credit bureaus, which may cause your FICO score to drop dramatically. This will make getting credit in the future more expensive, so it should definitely remain a priority to make all your bill payments on time, whether you’re getting hit with a penalty APR or not.
So the no-penalty-APR for late payments feature probably isn’t a good reason to get the Chase Slate® on its own. But there are a lot of other things to love about the card, particularly if you’re interested in refinancing credit card debt with a balance transfer. For instance:
- You get an introductory APR of 0% on Purchases and Balance Transfers for 15 months, and then the ongoing APR of 15.99% - 24.74% Variable APR.
- You won’t pay a balance transfer fee on debt that’s moved onto the card within the first 60 days of opening your account.
- Its annual fee is $0.
- You’ll get free access to your FICO credit score.
The takeaway? The Chase Slate® is a standout for consumers seeking relief from burdensome interest rates, but not because it waives its penalty APR.
Other cards that don’t charge a penalty APR
The Chase Slate® isn’t the only card that charges no penalty APR for late payments. Here are two other top cards that do the same:
Citi Simplicity® Card - No Late Fees Ever
The Citi Simplicity® Card - No Late Fees Ever is another good choice for balance transfers, because it offers an ultra-long 0% intro APR period on this type of transaction. You’ll pay 0% on Purchases and Balance Transfers for 21 months, and then the ongoing APR of 14.99% - 24.99% Variable APR.
Aside from charging no penalty APR, the Citi Simplicity® Card - No Late Fees Ever doesn’t charge late fees, and its annual fee is $0. The two major downsides to the card are that it carries a 3% or $5 balance transfer fee, whichever is greater, and doesn’t offer rewards in the form of ThankYou points, miles or cash back.
So the Nerds think its ideal use is for financing a big spend (think household appliances), because the long introductory 0% rate applies to purchases, too.
Discover it® - Cashback Match™
With the Discover it® - Cashback Match™, you’ll earn 5% cash back in rotating quarterly bonus categories (up to $1,500 spent per quarter) and 1% cash back on all other purchases. It also comes with an introductory APR offer: 0% on Purchases and Balance Transfers for 14 months, and then the ongoing APR of 11.99% - 23.99% Variable APR.
Plus, the Discover it® - Cashback Match™ is low on fees. Its annual fee is $0, and it charges no foreign transaction fees.
But keep in mind that it also charges a balance transfer fee of 3%, so if debt refinancing is what you have in mind, the Chase Slate® is probably a better choice. The Discover it® - Cashback Match™ is best for consumers who frequently spend money internationally, or are looking to earn cash back with every swipe.
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