Ever since the enactment of the proposed credit card Bill has been announced to take place in February 2010, banks, credit card companies, and lending institutions have been running amuck with the changes that they are incorporating during this grace period given by the Congress. Representative Barney Frank has been clearly adamant about the need for changes to be implemented, to give the consuming public a breather from the high interest rates and sudden hike increases that they have been dealing with all these years. In turn, there are large banks that are noticeably increasing their interest rates during the given grace period, as an attempt to offset the limitations that await them, come the implementation of the bill.
Bank of America Corporation is certainly not one of these large banks that have been dubbed as 'abusively' increasing their interest rates'. The Bank of America, in particular, has pledged that it would not implement any hike increases in terms of interest rates and fees before the changes that come with the enactment of the Credit Card Bill has been implemented.
However, most of Bank of America's customers have taken out variable rate cards, which mean that their interest rates just still might rise. This is because variable rate cards have interest rates that are dependent on the prime rate's rise and fall.
Bank of America actually made the move to switch most of its fixed rate cards to variable rates. This was done to implement more effective cost management to deal with the new reforms that will come with the proposed bill. Bank of America is not alone in implementing this switch strategy at all, with Chase and Discover Financial Services doing exactly the same.
This somehow defeats the purpose of Bank of America's decision not to implement any rate hikes during the given grace period. Moreover, the bank also issued a statement saying that it would still re-price customers who are unable to make consistent on-time payments during a 12-month period.
Recently, legislation has been introduced, stating the attempt to move the effective date of the proposed credit reforms to December 1, 2009. This is in response to the large banks' actions of hiking rates during the given grace period. The grace period was intended for the banks to make necessary preparations for the changes that would come with the new bill. Instead, it has been observed how banks have resorted to increasing their interest rates right now while the new bill has not been implemented yet.
Because of this, Bank of America has vehemently stated its plans NOT to change any of their terms until February 2010. Other banks all over the world are encouraged to do so as well.