Wells Fargo (NYSE: WFC) to Eliminate Penalty Credit Card Interest Rates for Late Payers

Wells Fargo & Co. (NYSE: WFC) announced that it will be eliminating penalty interest rates on credit cards which are imposed when customers are 60 days or more late on their payments, the Associated Press reports.

The San Francisco-based bank, who will be notifying customers of the change in their August statements, previously imposed a 27% interest rate to customers that were 60 days past due on their payments. The bank said that it will no longer automatically raise interest rates, but may cut a borrower’s credit limit or close their account if they are chronically late.  Wells Fargo also said that it still has the ability to raise rates credit card interest rates on all accounts as long as the bank provides customers a 45 day notice.

The firm said that it the change will be effective for customers that go late on their payments as of July 6^th. Accounts which triggered penalty rates before that date will continue to be charged the elevated rate.

Although the bank will not charge penalty interest rates, it will still charge the lesser of $25.00 or the minimum payment due as a late fee. If a second late payment is made during the six months following the first late payment, the lesser of $35.00 or the minimum payment due will be charged as a late payment. Previously Wells Fargo was charging late payment fees of $39.00 per incident, however, the firm lowered its penalty fees to meet new federal requirements.

Other new credit card regulations which have effected Wells Fargo and other banks this year is that banks can no longer trigger penalty rates on existing balance unless the payments are at least sixty days late. After the borrower returns to making regular payments for six consecutive months, the original interest rate must be restored.

Shares of Wells Fargo & Co. (NYSE: WFC) traded up 0.60% or $0.17 on Friday, trading at $27.86 by 3:45 ET.