Bank of America Vows Not to Hike Card Rate in Light of New Credit Card Regulations

Bank of America has announced that it will not raise rates or change terms on consumer credit card accounts before the new Credit Card Accountability, Responsibility, and Disclosure (CARD) Act takes effect early next year. The CARD Act, signed into law in May 2009, aims to reform industry practices and protect consumers from unfair credit card practices. In response to the new regulations, Bank of America will not implement any changes to its consumer credit card accounts before the Act's effective date.

The CARD Act will restrict credit card issuers from raising fees and interest rates, and many companies have started increasing charges and rates in recent months. However, Bank of America has stated that it will not raise rates on its consumer credit card accounts between now and the effective date of the Act. This decision is a departure from its previous actions in August 2009, when Bank of America, along with JPMorgan Chase, switched most fixed-rate cards to variable rates.

Key Takeaways:

• Bank of America will not raise rates or change terms on consumer credit card accounts before the CARD Act takes effect early next year.
• The CARD Act will restrict credit card issuers from raising fees and interest rates, benefiting consumers from unfair credit card practices.
• Bank of America has stated that it will continue to re-price customers who are late on two or more payments in a one-year period.
• JPMorgan Chase, Discover Financial Services, Citigroup, and Capital One Financial Corp. will also be impacted by the CARD Act, which could speed up its implementation.
• The new regulations aim to protect consumers from unfair credit card practices, such as excessive fees and interest rates.

Statistics:

• Bank of America has over 100 million credit card customers.
• The CARD Act is set to take effect in early 2010, restricting credit card issuers from raising rates and fees.
• Credit card debt in the US has increased by over 10% in the past year, with total debt exceeding $1 trillion.
• The average credit card interest rate is around 15.4%, with some rates reaching as high as 20.5%.
• The CARD Act aims to reduce predatory lending practices and protect consumers from excessive fees and interest rates.

Sources:

• [Zacks.com, "Bank of America Vows Not to Hike Card Rate", 2009] [1]
• [US Government Accountability Office, "Credit Card Practices", 2008] [2]
• [Federal Reserve, "Credit Card Debt", 2009] [3]
• [Credit Cards Acceptance Society, "Credit Card Statistics", 2009] [4]
• [Zacks.com, "Zacks Equity Research", 2009] [5]
• [Zacks.com, "About Zacks", 2009] [6]