BANK OF AMERICA Rolls Out New Credit Card Fees

Posted on April 25, 2011

The CEO of Bank of America promised it and now it has come to pass.  He promised that if the Bank rules and regs were changed and threatened profits, that banks would begin raising fees.

Saturday an announcement of new terms for my BAC VISA credit card hit my mailbox.  What a shock.  One late payment and my current rate will rise to 29%.  Imagine.  There are not graduated steps to the higher figure.  You are simply placed there.  Here’s the reaction the big banks WE bailed out had after the passage of the landmark bank reform bill:

NEW YORK — [7/17/2010] Big banks facing big drops in revenue are looking to Main Street to make up the difference.

Checking accounts, bank statements, even popping into your local bank branch could carry a hefty cost as the nation’s mega-banks scramble to offset expected damage from the sweeping financial overhaul. The uncertain future has overshadowed otherwise strong second-quarter earnings at JPMorgan Chase, Citigroup and Bank of America.

AVOIDING FEES: How to steer clear of checking account fees on the horizon

All three companies beat expectations this week with profitable results. Yet their stocks tumbled, helping send the wider market sharply lower Friday.

The reason: Investors are worried about banks’ future earning power after Thursday’s passage of the most dramatic rewriting of banking rules since the Great Depression. Adding to the pessimism are falling trading profits — which all three banks mentioned in the their earnings reports — and weak U.S. loan demand.

The worries are well-founded. Bank of America said Friday it could lose up to $2.3 billion in annual revenue alone just from new restrictions on debt card “swipe” fees, or the money banks charge merchants who accept debit cards. All told, the bill’s passage will reduce the value of Bank of America’s lucrative credit card business by a staggering $7 billion to $10 billion.

“This is going to cause a significant reduction in revenue in the future,” Bank of America CEO Brian Moynihan said of the restrictions after his bank reported a second-quarter profit of $2.78 billion, up 15% from a year ago.

The second-quarter results, driven by a sharp drop in losses from failed loans, would have given Bank of America’s stock a nice bounce in the past. Instead, investors anxious about the future swiftly dumped the shares, which fell 9%.  [USA Today]

What can you do?  Check out credit cards offered by credit unions:

But don’t expect a change to another credit card to be without fees if you are transferring a balance.