29.99% penalties – Here we go again! - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » 29.99% penalties – Here we go again!

29.99% penalties – Here we go again!

29.99% penalties – Here we go again!
The content is accurate at the time of publication and is subject to change.

Customers of Bank of America (BOA) who miss an upcoming credit card payment may be in for a huge and unpleasant surprise. Starting June 25th, BOA could raise penalty rates to 29.99%. The higher rate will apply to new purchases only, as old purchases have protection from rate increases under the Credit CARD Act of 2009.

Preparation

The rate increase, however, is not something that BOA is just springing on its customers. In fact, it is something the bank has been preparing bank customers for since April. It is also important for BOA account holders to understand that the higher interest rate is a penalty rate that is triggered by a late payment. The higher rate does not become the overall interest rate that the cardholder will be paying on existing balances. The penalty APR is an option the bank may choose to impose on the account, although it is not mandatory. The bank has discretion regarding these penalty APRs and it is possible that it would not be triggered the first time a client is late with his payment. The cardholder’s payment history will be taken into account and analyzed.

Notification

Notification of the penalty APR won’t happen overnight either. Customers will be notified at least 45 days before the rate increase occurs.

When BOA customers make a late payment, the penalty APR may not be the only consequence they face. The bank may also charge a fee of up to $25 as a late fee. For repeat offenders, such as those that make two late payments within a six month period, the late fee may be as high as $35.

The Irony

The fact that BOA will be charging a 29.99% penalty APR is within industry standards, with the rate typically exceeding 20%. The irony of the story is that BOA eliminated the penalty APR in 2010 in order to comply with the new credit card laws. The penalty fee at that time applied to both new purchases and existing balances. Today, banks cannot charge the penalty APR to the entire balance unless the account is 60 days past due.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

With The Chase App Cardholders Can Send Gift Cards
With The Chase App Cardholders Can Send Gift Cards

Posted: April 19, 2019

Have you ever wished you could just send a gift card to someone easily and quickly? If so you might want to check out the new feature Chase has added to their app letting users do just that. With the Chase App cardholders can not only… Continue reading

Getting 100,000 Bonus Points with the Marriott Bonvoy American Express Credit Card
Getting 100,000 Bonus Points with the Marriott Bonvoy American Express Credit Card

Posted: April 17, 2019

If you have the Marriott Bonvoy American Express credit card you might want to head over to the website to register your card so you can pick up an extra 100,000 bonus during the year. How does it work? It is fairly simple. Continue reading

Refer a Friend for the Chase Sapphire Preferred Credit Card and get 15,000 Points
Refer a Friend for the Chase Sapphire Preferred Credit Card and get 15,000 Points

Posted: April 15, 2019

People with the Chase Sapphire Preferred Credit Card can now get 15,000 bonus points if they refer a friend – and the friend is approved. What’s even better is that they can make up to five referrals which would let them bank an extra… Continue reading

Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Introducing the New Citi Rewards+ Card - the only credit card that automatically rounds up to the nearest 10 points on every purchase - with no cap
For Excellent, Good Credit
Enjoy 70,000 bonus miles after spending $5,000 on purchases in the first 90 days
For Good/Excellent Credit
See Rates & Fees
Perfect credit not required for approval; we may approve you when others won’t
For Fair/Bad Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!