Bank of America Credit Card Changes: What You Should Know

If you own a Bank of America credit card, you may have noticed recent policy changes. These updates relate to the Credit CARD Act of 2009, which takes effect in February 2010. Bank of America has already started adjusting its credit card terms to comply with the law.

As a cardholder or potential customer, you should understand these changes. They can affect your interest rates, payments, and credit score. Below are the most important updates to watch closely.

Key Changes to Interest Rates and Payments

Bank of America will no longer raise interest rates on existing balances if you pay a few days late. However, the bank will still charge a late payment fee.

Starting February 13, 2010, the bank can raise your APR on existing balances only if you miss a minimum payment by more than 60 days. However, the bank can still raise rates on future purchases if you miss payments. In these cases, Bank of America must give you at least 45 days’ notice.

Over-Limit Fees and Credit Score Impact

Bank of America will no longer charge over-limit fees. Instead, the bank will decline transactions that exceed your credit limit.

However, declined transactions can still hurt you. If your account already carries a penalty rate, these declines may affect your balance and lower your credit score.

How Extra Payments Are Applied

This change is one of the most important. When you pay more than the minimum amount due, Bank of America will apply the extra money to the balance with the highest APR.

For example, if your card has two balances, the extra payment will reduce the one with the higher interest rate. This rule helps you pay down costly debt faster, but you should still review your statements carefully.

Fixed Monthly Payment Dates

Your payment due date will now stay the same each month. Bank of America will also ensure that your due date falls at least 25 days after your statement closing date.

This change makes it easier to plan and avoid late payments.

Helpful Documents and Resources

You can review the official documents to better understand these changes:

• Credit Card Program – Details on the February legislation

• Sample Customer Letter – Bank of America’s explanation of the updates

• CARD Act of 2009 – Full congressional legislation

• CARD Act Explained – A breakdown of what the law affects

Reading these documents can help you make better decisions about your credit card use and overall finances.