How Bank of America Credit Card Works

Living a life without worries and debt free demands that you stay away from collecting any loans at all. However, we all know that this is a tall order for most people. For these people, they love buying things even when they do not have the means of paying for them immediately. So, to fix this problem the banks brought out credit card product to cater to those who need credit to buy whatever they want using the bank’s money. Of course, the banks will charge a little amount of interest and other charges for default and more. That’s where getting credit for consumption becomes worrisome. Ordinarily, taking credit is not a bad thing but, if you take to buy wasting assets like cars and clothing it is bad. However, on the other hand, if you take credit to build a business or buy an asset then you are doing the right thing. This post will show you how Bank of America credit card works to help you get the right credit and manage it well.

how Bank of America credit card works

How Bank of America Credit Card Works

In this post, we will cover the following areas.

  • how to understand credit card types and their rate
  • Know the different rates available
  • how the bank applies your repayments
  • where you can check for rates

How to understand credit card types and rate

The key to understanding how bank of America credit card works is in knowing that each card is different and has different rates of interest. There are about four types of cards. They are rewards, save on interest, cards for students and cards to help you build your credit.

Also, you can use the credit card finder to find what is best for you.

In addition, how you use the card will determine how much charges you pay for interest and other charges. So, to use your cards well you must seek to know credit card rates.

How Bank of America Credit Card Works-BOA

Know the different rates that are available

As we try to find out how Bank of America credit card works, listed and explained below are the rates you will see in your credit cards.

1. Standard Rates

Standard rates are basic credit card rates in Bank of America. When you get a credit card you usually sign up for some terms in the contract which usually come with the card. It is based on this contract terms that the bank will charge you on a monthly basis, the agreed fees. Also, the bank will show these charges in your monthly statement of account.

So, make sure you know the rate. You see knowing the rates is the first step to take to understand how Bank of America credit card works.

Furthermore, this rate could change anytime due to your credit history, variables in the market and other reasons. However, when the rate changes, the bank will notify you and give you reasons for it. They will also ask whether you can continue using the credit card due to the new rate or stop the card.

2. Variable Rates

Variable rates by its name show that the rates will fluctuate with the market condition since the rates depend on an index like U.S. Prime lending rates. Rates could go up and down so depending on the number of times your bank changes the rates; you should find out what obtains in your case to confirm whether the rate changes every quarter or monthly.

3. The Penalty rate

You pay a penalty when you flout an agreement in your contract. Therefore, confirm from the bank what the penalty is or if it imposes a penalty for defaulting in meeting repayments. Ask them what you must do to avoid paying penalty. Your best way out is to pay on time.

The good news is that if you pay penalty these rates are not permanent. The regulatory authority requires that the bank review rates in line with market changes from time to time. This is to enable the bank to decide whether to lower the Annual percentage rate (APR) or not.

Related: JP Morgan Chase Bank Personal Loans Procedure

4. Cash Advance Rate

When you use your credit card for a loan, charges of the specific rate for such transactions will be debited to that card. For example, when you use your card in a casino, bank ATM, to buy foreign exchange or collect cash from the bank, specific rates are charged for these transactions the bank deems as a cash advance.

5. Promotional Rates

These rates are lowered for a while to entice you to use your credit card. The bank can offer you this deal on your present card or for a new card. Also, you can save money due to the lowered rate but you should look out for the following:

The date Promotional Offer Expires

Look out for the date the promotional offers expire even when you are paying off your debt at a low-interest rate. This is to avert unforeseen charges when the rate goes back to what it was. This is how Bank of America credit card works so watch out.

How the Bank Applies Your Repayments 

Credit card Issuers including Bank of America can legally assign amounts you pay that are above the lowest payment, to reduce your credit card debt with higher interest rates. They are also allowed to assign your lowest payment to reduce debts with the lowest rate first. You can confirm what obtains in your case by checking how bank of America credit card payment assigns minimum payments.

Applied Rate

The applied rate when the promotion ends is normally the usual contract or, standard rate.

Where You Can Check for rates

Now that you now that the whole credit card debt relies on the rate, let us check where you can see the rate.

 Check Your Account Agreement

Your account agreement will show you particulars of all the interest rate that the bank charges you for the credit card. Also, they will state what can cancel the contract. So, if you cannot find your agreement, meet your bankers.

Your Credit Card Statement

You can also get the rates in paper form or online. The statement will carry a present interest rate, promotional rates, penalty rates, cash advance rates, plus necessary information you should have about your account.

Your Email Account

Take all emails from your credit card provider important. You will get separate emails stating that rates have changed. Furthermore, they may put the new credit card rate in your monthly statement.

Customer Services Telephone number

If you have any issues about your credit card, call the phone number behind your credit card to speak to the Bank of America credit card customer service.


After reading this article, we are sure you now know how bank of America credit card works. Also, take time to understand the terms and conditions of the contract before accepting the credit. Furthermore, you should study your credit card statement of account, learn more about the rates they charge your account.  This will help you control paying penalties and excessive charges that you did not bargain for and save you money.


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