What triggers a penalty APR?

A penalty APR is triggered primarily by missing a credit card payment. When a cardholder fails to make the minimum required payment by the due date, the credit card issuer may increase the interest rate on future balances to a higher penalty rate. This serves as a financial consequence for the missed payment and is aimed at encouraging timely payments.

Utilizing the card for cash advances may incur fees or higher interest rates already, but it doesn't specifically trigger a penalty APR. Paying more than the minimum payment is generally a responsible money management practice and does not result in a penalty APR; in fact, it can help lower balances more quickly. Closing the credit card account does not directly impact the APR on existing balances or trigger a penalty rate; rather, it can affect credit utilization and overall credit score. Thus, missing a credit card payment is the key factor that leads to a penalty APR.