Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Bank of America to hike interest rates for late payments

By Blake Ellis, staff reporter


NEW YORK (CNNMoney) -- Bank of America customers who make late payments on their credit cards may soon see their interest rates jump.

Beginning June 25, the nation's largest credit card issuer will introduce a penalty interest rate of up to 29.99% on future balances for credit card customers who fail to make timely payments.

The rate will vary based on a customer's credit profile, and one late payment won't automatically trigger a 29.99% penalty rate, a Bank of America (BAC, Fortune 500) spokeswoman said.

Bank of America hasn't charged a penalty rate since the Card Act was introduced in 2009 -- which limited issuers from raising rates on existing balances.

But issuers weren't prevented from raising rates on new balances. They just have to notify customers at least 45 days before raising the rate, as Bank of America said it will do.

Other issuers, including Chase (JPM, Fortune 500) and Citi (C, Fortune 500), are already charging penalty rates ranging as high as 29.99%.

In addition, the Federal Reserve is considering a cap on the fees banks can charge retailers when consumers swipe their debit cards. Speculation about the new "swipe fee" regulation has led banks to make many changes to terms and conditions in recent months.

Bank of America is also testing a $59 annual fee for its riskiest customers. Other issuers have eliminated debit rewards programs, tested $5 ATM fees, introduced monthly fees on checking accounts and threatened to put a spending limit on debit cardsTo top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed4.01%3.96%
15 yr fixed3.14%3.12%
5/1 ARM3.15%3.08%
30 yr refi4.05%3.99%
15 yr refi3.16%3.14%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 20,624.05 4.28 0.02%
Nasdaq 5,838.58 23.68 0.41%
S&P 500 2,351.16 0.00 0.00%
Treasuries 2.42 -0.02 -1.02%
Data as of 5:46pm ET
Company Price Change % Change
Bank of America Corp... 24.52 -0.06 -0.24%
Pfizer Inc 33.62 0.00 0.00%
Cisco Systems Inc 33.74 0.14 0.42%
Kraft Heinz Co 96.65 9.37 10.74%
Mondelez Internation... 42.50 -0.70 -1.62%
Data as of Feb 17

Sections

Kraft Heinz has abandoned its more than $140 billion bid for food and personal care products giant Unilever. But the company, which has Buffett as its largest investor, could still be interested in buying another big supermarket staple. More

It's still not clear whether millions of European Union migrants living in the U.K. will be permitted to stay in the country. More

Some Silicon Valley workers are going public with how their lives are changing under the new President as part of a new project from photographer and oral historian Helena Price called "Banned." More

Pay yourself first; donate stuff you don't need to charity and remember to claim deductions; finally, cut your recurring expenses. More