Everyone knows that it is only the unwilling, unable and maybe the unconscious who run up charges on credit cards and fail to make even the minimum payment on time. This week’s mail brought news from the TD Bank that such people face punishing new penalties which will extend out over an entire year, even after their card is current again. A circular enclosed in monthly statements to all cardholders — including the ones who never carry a balance — announces cheerily that the bank is “making important changes” to your TD credit card account. The circular says that effective March 31, 2015 those who do not make the minimum payment will face a jump in the penalty interest rate from 21% to 24.99%. That puts the annual rate at five percent above the regular rate of 19.99% for carrying a balance on an up-to-date card. Furthermore, effective March 31, the bank will apply that rate to the outstanding balance for 12 months, even after you have started to pay on time. The present penalty period is two months. It is a well-kept secret just how many people carry a bank card balance much less how many neglect to make the minimum payment on time.
