Beginning this summer, Bank of America (NYSE: BAC) will be rolling out a new penalty interest rate for credit card customers that fail to make prompt payments on their credit card accounts.

Bank of America, the largest U.S. Bank by assets, will begin charging a new penalty fee that could reach as high as 29.99% for certain customers who miss payments, according to the bank’s spokeswoman Betty Riess, who spoke with

Customers can expect to receive letters in the mail with full details of the Bank’s plans this month.

The fee will only be charged to certain customers after a review of their accounts, said Riess, adding that those chosen to receive the new penalty fee will receive 45 days advanced notice. The new fee will only be charged on new transactions, she added.

According to Riess, Bank of America hasn’t charged a penalty interest rate on its credit card holders since the Credit CARD Act was enacted. Bank of America also hasn’t raised the rates on its existing credit card balances for customers that are more than 60 days late on a payment since the law took effect, Riess added.

Bank of America Overhauls Fees and Rates to Keep Up With Feds:

Bank of America announced in February that it would be applying a new $59 annual fee to the accounts of certain credit card holders, which affects just 5% of the bank’s credit card customers that are considered “high risk.” Those considered for the new fee include credit card customers that those that make late payments, have lower than average FICO scores, have maxed out their credit card balances. The bank’s high-risk customers already pay about 14% on their credit card balances.

Read: Bank of America To Charge New $59 Credit Card Fee

The Credit Card Act of 2009, placed limits on the ways credit card companies are allowed to charge fees in ways that included restricting finance fees to $25, prohibits inactivity fees, and allowing card issuers to charge just one fee at a time. In the event of a rate change, customers must also have advanced notice before the change occurs. Credit card customers that do experience rate changes are also entitled to reevaluation of their situation after six months.

Learn: How to Avoid Bank Fees and Credit Card Fees


Carolyn Okomo

Carolyn Okomo

Carolyn Okomo is a staff writer for Her columns cover general personal finance topics with a focus on financial literacy.
Carolyn Okomo
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    Today all credit card customers of Bank of America received a letter informing them that their late payment will go up to 29.9%.Pay for ever, you will never re-pay this.

    The Prime Interest Rate in the USA is now 3.25%. Bank of America is adding a “penalty” of 26.74% to this rate. A penalty? For all existing balances, cash advances AND anything over the credit line.

    However, Bank of America customers no longer have a credit line. The bank now can “refuse to honor your account” (direct quote) The bank states : We may deny any transaction for any reason at our discretion. We are no liable for any refusal to honor your account.

    Excuse me?

    Remember Bank of America bailout? It got 45 billions in US taxpayer bailout aid (read cash) and 118 billion in “guarantee against bad assets”, cash for all those bad mortgages the bank made.

    No one was ever prosecuted for the bad loans, over priced appraisals, the non-existent value of the “derivatives”, the huge CEO pay (all paid out), the bonuses or the meltdown it all caused.

    Bank of America continued doing business: selling and buying real estate, paying bonuses, making bad investments and running a credit card scam that makes the mafia look good. Really good.

    Bank of America would have belied up had the taxpayers not pony the billions that saved it. Twice. In 1987 it cost 1,4 billions to keep it going. The US government owns share of this bank, it’s the best guarded secret in the US but it is still at least 34% of the bank. If effect, we the taxpayers are the largest shareholders.

    In gratitude the bank just instituted a policy that makes the mafia look good.Usury? Scam- as you can be denied any time and then the usury, the penalty,kicks in? You kidding, just a way to keep those bonuses floating.

    The bank advises not to use your card, if you do not want to pay this usury. Now, that is a real help.

    Mr. President? Elisabeth Warren? Is this the customer oriented reform you promised? because it feels like mobbing us out. And we own them!

    Time to step in and actually perform in the name of the people/owners of the bank that killed our jobs, stole our savings, emptied our pension funds and created a huge housing bubble twice in 30 years. Like firing the management, taking over the assets and end this usury parading as legitimate banking.

    We are waiting, Mr. President.