Bank Of America & Penalty
May 16, 2011 by staff
Notifications sent with the bills this month say the Charlotte bank may apply a “penalty rate” of nearly 30 percent of future balances. A bank spokesman said a delay in payment is not automatically trigger a penalty rate. The bank will review the account to determine if the new fee is necessary, taking into account the risk factors.
The change will take effect on June 25, according to a notice to the customer. If the new rate applies, customers will be notified 45 days in advance.
Under the new policy, the annual percentage rate or APR, may reach as high as 29.9 percent, said the announcement.
If implemented, the new rate will apply indefinitely, but the bank will review the accounts periodically to determine if the rate can be cut.
The bank says it has e-alerts to remind customers when payments are due. You can avoid the kind of penalty for not using your card for new business.
The bank said it has raised interest rates on existing balances of credit cards from credit card reform legislation came into force last year, even if the customer is 60 days late, and has no plans to do so. The bank previously had not a penalty rate, unlike other issuers.
Recently, the Bank of America said first-quarter revenue in its card services unit, which includes debit and credit cards, fell 18 percent to 5.6 billion in the same period a year ago.
At the end of the first quarter, the bank said the average consumer loans and credit card outstanding 134 300 000 000. About 4.8 percent of the budget was at least 30 days delinquent, an improvement of 6.8 percent a year earlier.
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