Banks are hurting with the economy and are looking for ways to lure back consumers who have increasingly turned to debit cards and cash-only payments.
New Bank of America card sheds variable interest rate
This October, Bank of America rolled out its “Basic” card, which establishes for the life of the card one interest rate for all purchases, transactions and cash advances.
“For those consumers who just want the basics, our goal is to offer products with features that are predictable, easy to understand and help them manage their finances responsibly,” says Ric Struthers, president of Bank of America Global Card Services.
Other features of the card are:
• One interest rate — U.S. Prime plus a margin of 14 percent — that never changes for the life of the account. Rate increases and decreases will only occur if the Prime Rate changes.
• No over-the-limit fee.
• Easy- to-understand, single-page disclosure explains terms and conditions.
• One flat fee of $39 for late payments
Is this card a good deal?
The interest rate. At 14% plus prime, you’re looking at a 17% interest rate. There are some consumers out there with interest rates of 9.99% and 13.99%. If you have good credit, you could obtain a lower interest rate than this offer. However, if you typically have interest rates over 20% then this card could be a good deal for you…..if you qualify.
The late fees. Some cards, especially ones issued from community banks, have $15 late payment penalties. The $39 late fee on the Bank of America Basic card is one of the highest fees charged by banks.
Remember banks are in the business of making money, not losing money. Whatever card they issue, it is meant to be done in their best interests, not yours. The best thing you can do for yourself is either pay your cards off every month, at least make the minimum payment, or opt for cash. There’s nothing wrong with using your debit card if you have money in the bank to cover the purchases
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