Ex-MBNA cardholders face new minimum fee
Bank of America Corp. is imposing a monthly minimum finance charge of $1.50 on former MBNA credit card customers who carry balances unless they opt out in writing by May 1.
Diane Wagner, a Bank of America spokeswoman, said customers the bank acquired when it bought MBNA Corp. in 2005 are being brought into conformance with the existing Bank of America fee structure. In letters to customers, Bank of America said it was adding a minimum finance charge "due to a change in our business practices."
Wagner said the minimum charge would only be assessed if the customer has a finance charge of less than $1.50, which is roughly the interest on a $100 balance at an 18 percent interest rate. Someone with a balance yielding a 30-cent finance charge would pay $1.20 more, bringing the total to the $1.50 minimum. Customers who pay their entire balance would not be assessed the fee.
"It's pretty much industry practice to have a minimum finance charge," Wagner said.
Greg McBride, senior analyst at Bankrate.com, said minimum finance charges are common in the banking industry but the $1.50 minimum imposed by Bank of America is among the highest he has ever seen.
"The minimum finance charge is sort of the industry's way of squeezing some extra income out of very minimal balances that are carried over," McBride said.
In a letter to MBNA customers, Bank of America said customers could reject the minimum finance charge and pay whatever amount they actually owe by notifying the bank in writing by May 1.
Tom McNiff of Winthrop said he intends to reject the minimum finance charge. "Anyone who doesn't opt out of this slimy policy is a fool," he said.
In the same letter, Bank of America also said payment due dates were changing. The bank said a customer's payment due date will be a minimum of 20 days and might range as high as 32 days after the statement closing date. The bank said a customer's due date may change from one billing cycle to the next "based on such factors as your payment history."
Payments made after the due date typically trigger late fees and a higher interest rate.
Bruce Mohl can be reached at mohl@globe.com. 