Bank of America has now come under the spotlight after announcing the new penalty that will be levied on card holders a couple of months down the line. Based in North Carolina, this bank said that penalty rate which amounts to 29.99% of the future purchases will be levied on bank holders once their accounts become delinquent.
Keeping in line with the regulations specified by the CARD Act, the bank has already begun sending out information about the penalty to card holders who will be affected by its implementation. This penalty rate will be applied to the account even in the case of just one default.
This new penalty rate has been the hot topic of discussion among various circles right from the time the letters started arriving at the doorstep of card holders. However, it is to be duly noted that this is not the only financial institution to levy this penalty. Other major credit card lenders in the United States, including Discover, Citi and Chase, are already levying a penalty of 29.99% on delinquent accounts.
Financial experts have appreciated the fact that Bank of America, unlike most others in the country, is sending out advance notice to customers to sit up and take note. This will give customers 45 days time to think about the new penalty rate and make amends.
The bank, however, seems to be unaware about a loophole in this move. Since the penalty rate will be levied only on future purchases the customers make using the card, they can easily escape this hike by avoiding using the card for new purchases.
