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Bank of America Raising Penalty Rate for Late Payments

ABC News(NEW YORK) -- It's never been more important to pay your credit card bills on time.

Being just one day late on your payments can be very expensive and now, it could even be costlier.  Bank of America is expected to raise its maximum penalty rate this week -- a move that is becoming part of a trend.

Explaining Bank of America's new policy, Adam Levin with says, "If you're more than one day late on a payment they have the option, if they want to, to raise your rate to 29.99 percent as a penalty rate."

The hiked up penalty rate would apply to future purchases, not on what you already owe.

If you want to avoid paying more, switch your credit card account to another bank.

"You can also go to credit unions and smaller banks.  So it's not like you don't have options," Levin says.

Copyright 2011 ABC News Radio

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