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Bank of America Corp. says beginning in June it will raise the interest annual percentage rates for all of its credit card customers who carry a balance on cards with rates below 10%. BofA would not define the average new interest rate for affected customers. "The increase in rates on these accounts reflects current economic conditions where our cost of providing credit has significantly increased," a BofA spokesperson tells CardLine. The nation's largest card issuer began sending notices to affected customers earlier this month. Customers may opt out of the interest rate by paying off their balances under the existing rate, but the new interest rate applies if they make any additional charges. BofA would not say how many customers received notices, but the spokesperson says the new rate policy would affect less than 10% of its 70 million credit card accountholders worldwide. BofA says customers can call or write the company to reject the new rate. Linda Sherry, director of national priorities at Consumer Action, tells CardLine the nonprofit consumer-advocacy organization is keeping tabs on credit card interest-rate spikes and is protesting those that seem unfair. "The Federal Reserve approved new credit card industry rules that will prevent some of these unfair interest-rate increases, but those don't go into effect until July of 2010," she says. "It seems that all of a sudden we're seeing all sorts of movement in credit card rates and fees, almost as if it's the last gasp for credit card issuers to jack up rates on consumers who can least afford it now."
