If you own a Bank of America credit card, then you are likely aware of the fact that the bank has changed (and is continuing to change) its credit card policies due to the passage of Congress’s Accountability, Responsibility, and Disclosure (CARD) Act of 2009, which takes effect in February 2010.
It would be in your best interests as a customer/cardholder (or a potential customer) to know what exactly they things are being changed, because it may have an effect upon your financial situation. The purpose of this blog post is to try and bring some of these changes to your attention, and to provide you with access to the documents being used to do so.
1) Your rate for existing balances will no longer be raised for being a few days late with your payment -but you will still be charged a late payment fee. This change affects the “Default Pricing” section of your credit card agreement.
2) Beginning on February 13, 2010, your APR’s on existing balances can only be raised if you do not make your minimum monthly payment within 60 days of the payment due date. However, the APR on future accounts and transactions can (and probably will) be raised if you fail to make the payment within 60 days. The bank also reserves the right to amend your agreement in such a situation. However, in order to do so, Bank of America has to provide you with at least 45 days of prior notice.
3) Bank of America will not give you a charged fee for going over your credit limit (although such transactions would still be declined). Doing so can negatively affect your account balance if your account is currently at a penalty rate, leading to a decrease in your credit score.
4) This one is perhaps the most important one – Any amounts that you pay over the minimum payment required will now be used to pay down balances with the highest APR. In other words, if you have a credit card account with two balances and you overpay on one, then the amount that you go over will be used to pay off the account with the higher APR. This is a tricky one that you need to keep your eye on.
5) Payment dates will always fall on the same date each month, and will be at least 25 days from the closing date printed on your account.
Reading the following documents will give you a firsthand look at the changes being made, what exactly is being changed, and why. You can also use them to help reach your own conclusions concerning your personal financial situation.
For a copy of what the February legislation should look like, you can find an online copy if you click on the following link: Credit Card Program
For a copy of Bank of America’s letter explaining these changes, you can look at a sample provided by them. You can find it by clicking on the following link: Sample Customer
For a copy of the Accountability, Responsibility, and Disclosure (CARD) Act of 2009, click on this link: Congressional Act. And if you want to know more about what the Act will affect, you can find out by clicking on the next link: Congressional Act Explained.