TARP'ed bank BofA to Boost Rates on Cards With Balances
Story: BofA to Boost Rates on Cards With Balances
Starting with June account statements, any credit-card customer who carries a balance and has an interest rate below 10% will see his or her rate jump into double-digit territory. A company spokeswoman declined to provide an exact number, saying the changes would affect less than 10% of the bank's card customers in the U.S. The bank has 70 million card customers world-wide, but doesn't break out the number of customers who are in the U.S. "It impacts a small portion of our cardholders," said Betty Reiss, the spokeswoman.
The bank's move follows similar rate increases that other banks, including Citigroup Inc., J.P. Morgan Chase & Co., and American Express Co. have implemented in recent months. The banks, facing rising delinquencies, blame the economic turmoil. Many have been tightening the screws on people with less-than-perfect credit, but now they're pinching a broader range of customers who have good credit records, but carry a balance.
Most of their customers are US taxpayers who help keep BAC alive. Now it is returning the favors back. BTW, the credit card delinquency rate is going up. Higher rate will certainly trigger more credit card defaults.
Welcome to Banana Republic of USA!