I previously sent an email on Bank of America increasing their interest rate on late payments to nearly 30%. In the interest of fairness please find response by B of A to Kurt Chilcott a CDC lender who is a member of Small Business California.
Small Business California is looking for a new board member in the San Diego area. If you or someone you know is interested please let me know. The ideal board member would have a knowledge of the small business community in San Diego and a desire to shape small business policy in Sacramento and Washington.
Hope you had a great 4th.
Small Business California
2311 Taraval Street
San Francisco, CA 94116
On June 25, new guidelines for consumer cards went into effect; customers were notified of these changes in April. If a customer is late with a payment, an interest rate increase is possible. Please note that last word. The bank would first review the account to determine if it is appropriate to raise the rate on future transactions. If there is a penalty for late payments, the maximum the new rate could be is 29.99%, and the customer would be notified at least 45 days in advance. Again, this is for consumer cards, and please note that most other major issuers already had a penalty rate. We also constantly work with our customers to help them understand and manage their accounts, using such tools as free automatic alerts for payment due dates.
As for small business cards, Bank of America eliminated many punitive fees and practices last year:
o Unlike most other issuers, we no longer charge over-limit fees.
o We no longer increase APRs on existing balances.
o We allocate payments above the minimum payment to higher-rate balances first.
o We provide a minimum of 25 days from statement closing date to payment due date.
Also, here is the link to the release last month on our new Small Business Charge Cards: http://mediaroom.bankofamerica.com/phoenix.zhtml?c=234503&p=irol-newsArticle&ID=1563962&highlight=
Kurt, thanks again for keeping us informed of talk out in the field. Hopefully this information will improve others’ understanding, and please let me know if I can provide anything else.
Enjoy the 4th!
Susan Povak | SVP/CSR National Program Manager | Community Affairs
Bank of America 100 Federal Street MA5-100-10-09 Boston MA 617.434.7333