Bank of America Lays Out Card Terms

CHARLOTTE, N.C. (TheStreet) - Bank of America (BAC) said Monday it's sending out simple, one-page explanations of the rates, fees and other terms for its millions of credit-card customers.

Lack of clarity in lending agreements has been a key issue for consumers, and banks are probably going to have to provide such simple statements as part of the regulatory overhaul eventually. Bank of America is the first of the major banks to take initiative with simplified terms. The Charlotte, N.C.-based lender now has about 40 million credit card holders, and ranked No. 2 behind JPMorgan Chase (JPM) in terms of consumer credit card market share in the U.S. last year.

"We know that now, more than ever, people want clear, straightforward information from their bank," Ric Struthers, Bank of America's president of Global Card Services, said in a statement.

The new statements will clearly outline rates for new purchases, balance transfers and cash advances, as well as provide a summary of fees. While others are likely to follow suit, not all recent changes by top credit-card issuers like Bank of America, JPMorgan, Citigroup (C), American Express (AXP) and Capital One (COF) have been a blessing to consumers.

Many have changed terms in the past few months before new consumer-protection laws take effect. Changes include cutting card limits, canceling lines of credit, or hiking rates and fees. Bank of America specifically changed most cards from fixed rates to variable rates to give it more flexibility. New legislation will prevent banks from unexpectedly hiking the rate on fixed-rate cards, unless the borrower is at least two months delinquent. Bank of America has also started charging annual fees on a small percentage cards that previously carried none.