Bank of America Raising Interest Rates on Credit Cards with Balances

Bank of America has become the latest credit card issuer to impose higher interest rates on customers who opt to carry a balance.

Beginning in June, account statements will reflect the higher rate, which will generally rise from the single-digits to the teens, the Wall Street Journal reported.

One example they cited pushed a cardholders’ interest up to 13% from 7.9%; the customer has decided to opt out, so her $2,000 loan balance will retain the old interest rate.

However, she’s unable to make new purchases using the credit card, as it would push the 13% rate on both new and old balances.

Some cardholders may not be so lucky, and could be forced to either accept the new terms or close the card and pay the remaining balance in full.

Bank of America said it began notifying customers of the changes last week, and said affected accounts had an average APR of 8.5%.

While it’s unclear the exact number of affected cardholders, the changes should impact roughly 10% of the bank’s credit card customers in the United States, so potentially four million credit cards.

If you’ve received a similar notice from Bank of America or another card issuer, it may be wise to shop around for a better deal, though there are no assurances these days if you’ll get approved or if the new card issuer won’t eventually jack up your “fixed” rate too.

Of course, that shady practice looks like it will change if the so-called Credit Cardholders’ Bill of Rights goes into effect next summer.

Recently, Chase raised minimum payment requirements on credit cards to 5% of the balance from 2% for certain customers, forcing many to come up with a lot more money each month.

Most of the cardholders affected by such changes tend to carry large balances for a long period of time without making any significant effort to pay them down.