bank of america credit card

Bank of the United States holding credit card, be careful. If you are late with a monthly payment, this little "oops" could become a major "ouch" The balance of your future may be subject to a penalty rate of almost 30%, according to a report in The Charlotte Observer Wednesday . The penalty rate will apply to previous balances, however.

Nor does the interest rate penalty will be applied automatically, the article notes, but rather on a case by case for other risk factors into account. And if the bank chose to make an account with a higher penalty rate, it will give the customer a head 45 days before the new rates are effective as required by the credit-2009 Accountability and Disclosure Act , otherwise known as Card Act. Bank of America (BAC) has begun to inform customers about rate increases penalty through their bills this month: those affected will soon see their rates increase next afterJune 25th

Rate of fine may change up to 29.99% of the sales to come, and the holders will have their accounts audited every six months required by the Act on the map of potential reductions in penalty rates, said spokeswoman Betty Riess BOFA daily finances.

Before CARD Act came into force, consumers face an interest rate of death spiral with their credit card, Greg McBride, a senior financial analyst with Bankrate.com, told the daily finances.

"Before the law of MAP, increases penalty interest rate was one-way ticket," said McBride. "Now they have to go through every six months. And while the needs are still kind of loose, it is a step in the right direction."

He said another big change that came out of the law of cards is that any increase in rates can only be applied against future balances on credit cards and existing balances, unless the payment is a crime with more than 60 days .

The adoption of the Bank of a penalty rate follows a path that other financial institutions have been taken since the 1990s, according to a CreditCards.com. Back in 1998, for example, hovering the average default rate of 22.75%, and remained in a relatively narrow range over the years that followed, up to 25.28% in 2009. But despite the passage of the map of the Act, the penalty interest rates continued to rise.

Last summer, banks were charging an average median rate of penalty interest of 29.99%, the report says BankRate.com. This puts the Bank of America squarely in the middle of the pack with its competitors. If it's any consolation to their customers, CreditCards.com noted last year that HSBC is the penalty rate had exceeded the limit of 30% - 31.99% less trim.

To avoid these sanctions, the users credit card just to make payments on time, McBride advises.

McBride said: "People complain that the default interest on complaints of violations, if you do not want the ticket, then do not speed .."