Bank of America cuts interest rates for credit card users

A man rides by a Bank of America branch Pasadena, Calif.

TEXT OF STORY

Bob Moon: Some good news for credit card holders -- and how long has it been since we've been able to say that? Actual good news. More than a million Bank of America credit card customers are going see their interest rates go down.

Marketplace's Stacey Vanek Smith just had to check this out.


Stacey Vanek Smith: The credit card interest rate cuts are part of the CARD act Congress passed in 2009.

Bill Hardekopf is the CEO of lowcards.com.

Bill Hardekopf: People had their APRs go skyrocketing in a number of cases and it was unfair and that's why Congress acted.

The CARD act ruled banks needed to reevaluate any interest rate hikes imposed in 2009 and much of 2010. The banks have a lot of leeway in how they reevaluate, but many customers could see their rates drop significantly.

Banking analyst Bart Narder with Celent says banks want to lend money again and are starting to raise credit limits and lower interest rates to encourage borrowing.

Bart Narder: Banks are seeing delinquency rates drop and that makes them more confident about extending more credit.

Card companies also don't want to lose good customers, says Hardekopf with LowCards.com.

Hardekopf: The credit card industry is still a really competitive industry. Issuers want to hold on to their very best customers.

Hardekopf expects other banks will follow suit and millions more cardholders will see their interest rates go down.

I'm Stacey Vanek Smith for Marketplace.

About the author

Stacey Vanek Smith is a senior reporter for Marketplace, where she covers banking, consumer finance, housing and advertising.

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