.htaccess redirection

What am I doing wrong? I cannot figure out when this is throwing a server error. It should redirect anyone going to to www.example.com/folder to www.example.com/folder.php.

Code:

---

RewriteCond %{REQUEST_URI} ^/folder [NC]
RewriteRule ^(.*)$ http://www.example.com/folder.php [L,R=301]

---

Update: It might not be that code after all.

It turns out, that I have two identical .htaccess files. Bytes to permissions the files are identical. However, one returns a server error and the other works. Any ideas? I have never seen this before.