Q. I recently opened a Discover credit card because it has a fixed 4.99% rate on balance transfers. The paperwork that came with the card said it had a maximum default rate of 29.99%. But my first statement just arrived, and the default rate is 54.03%. Is that even legal?

A. We examined your statement and have some good news. The astronomically high 54.03% rate isn't the penalty rate you'd be charged for making a late payment.

It's the annual percentage rate (APR) for your balance transfer.

Annual percentage rates reflect the interest rate you're charged and the fees. Because you were charged a $120 transfer fee when you opened the account, it's included in the APR.

That calculation also assumes you'll pay that $120 every month in projecting the annualized rate. If you actually had to pay $1,440 a year in fees on a balance of just under $3,000, your APR would soar above 50%.

But of course you don't have to pay that.

The transfer fee was a one-time charge, and the APR on your next statement will be dramatically lower.