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Bank of America adds card fee

By Lucy Lazarony · Bankrate.com
Thursday, February 24, 2011
Posted: 1 pm ET

Bank of America will be charging a new $59 annual fee to about 5 percent of its credit card accounts in May, according to an article by the Associated Press.

Whether or not a Bank of America credit card customer will be charged the new annual fee depends on a customer's credit risk profile, AP reports. According to the article, customers that carry balances close to their credit limits, have lower-than-average FICO scores or pay late on a regular basis may be charged the new annual fee.

Bank of America card customers assessed the new annual fee are also unlikely to have any other relationships or accounts, such as a mortgage or checking account, with Bank of America, according to AP.

According to the CARD Act, credit card issuers must provide notice of certain changes to your credit card account 45 days before they take effect. These changes include adding an annual fee to a credit card account.

So it's important to monitor your credit card accounts carefully and be on the lookout for new fees.

Has a credit card issuer informed you that a hefty annual fee is being added to your credit card account? Would you rather close the account altogether than pay the annual fee?

Before you close a credit card account, be sure to consider the impact on your credit score.

Your credit score considers how much of your revolving credit lines that you use every month. This is called a credit utilization ratio. The higher your credit utilization ratio climbs, the lower your credit score dips.

Closing a credit card account, especially one with a high credit line, could push up your credit utilization ratio, nudging down your credit score.

Utilization counts for a good portion of a factor worth 30 percent of a consumer's FICO score, the most widely used credit scoring model. The FICO score doesn't factor the balance and limit of a closed account into utilization once the cardholder has paid off the account.

So if you have high balances on other credit cards when you close a card account, your utilization could climb and ding your credit score. But as soon as you start to pay down those other balances, your credit score should improve.

If you decide to close a credit card due to a hefty annual fee, the best way to protect your credit score is to pay down balances on your other credit cards. If you pay your credit cards in full each month, you can protect your credit score by charging less on your other credit cards.

Ready to close a credit card account? Be sure to follow these steps.

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Come back to our home page Monday, Feb. 28, for our Managing Debt special feature. Find out how to live a debt-free life.

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93 Comments
mr. parker
April 25, 2011 at 1:09 am

Credit scores are a joke. I don't care for government regulation but some is needed when dealing with these financial predators. Unless you are applying for a job that deals with finance, no credit score should be utilized in the hiring process. People that need jobs desperately might be behind in payments and need a better job. Insurance companies should be forbidden to use it when evaluating applications.
There's too many mistakes and apparent subjective criteria in determining credit reports and the resulting FICO score.
People are cheated if they pay off a card and close it.
They are cheated if they dare to use too much of their approved credit line.

The increasing interest rates and underhanded fees are designed to keep people in perpetual debt. I thought the XIIIth Amendment outlawed slavery.

P.S. I do have good credit and now have no credit cards.

Vitsing
April 25, 2011 at 12:55 am

Given historical data banks should charge high risk customers more. I pay my credit card off every month and have little use for dead beats or progressives who think that I should penalized for their bad behavior.

Major_J
April 25, 2011 at 12:05 am

Have any of you figured out the way to use credit cards is to PAY OFF balance each month. Don't buy something you cannot afford. seems like a simple approach and you will never be concerned with the interest rate charged... DUH!

Dean
April 24, 2011 at 11:12 pm

Keep on making the banks richer.They love to rais intrest rates and charge outlandish Fees.I am working to pay off my credit cards So I don't have to pay these leaches a dime.A wise man (my father) once told me if you can't pay cash for it you don't need it.I wish I had listened 20 years ago :-)

toldyouso
April 24, 2011 at 7:49 pm

THE P!TTS

toldyouso
April 24, 2011 at 6:41 pm

knew that would happen...they gave all those !lle@als those credit cards and low or no interest loans...THEY GOT WHAT THEY DESERVE, BECAUSE I KNEW THEY WOULD NOT GET PAID BACK..Took my money out of there

Jackson Black
April 24, 2011 at 5:46 pm

fumanchu is obviously a shill for the bank.Forced to take TARP money and not bailed out? B/S!,they were still complaining afterwards that they didn't get enough money, so save it.
They're a lousy bank that charges 5$ to cash a paycheck, no matter that your employer has their business account there.

Blake
April 24, 2011 at 7:09 am

i have one of their cards and got that fee my score over 700 and not even half way toward my limit. so going to pay it off and cancel it. tired of these added fees by banks give me a new fee take my money some place else.

Mike
April 23, 2011 at 10:26 pm

No doubt the bank is losing too much because of all the cards they have issued to illegal immigrants.

Shane Mac
April 22, 2011 at 11:58 pm

Greedy !!!! :)