Your credit card company seems to hate you (continued)

After taking a thrashing last month on Capitol Hill, banks and credit card companies may be showing some sensitivity to the struggles some of their customers are enduring.

But many, including Bank of America, are still raising interest rates in the face of severe losses from loans.

A consumer credit protection group announced yesterday that 10 banks, including Bank of America, have agreed to make credit card repayment concessions to help delinquent customers avoid bankruptcy.

The National Foundation for Credit Counseling said the banks agreed to modify and expand debt management plans through which creditors provided some repayment concessions, including waiving late fees.

Such plans have been in place for 40 years, the NFCC says. But in this economic downturn and recession, fewer consumers have sufficient income to be eligible for, or the ability to maintain DMPs, often leaving bankruptcy as the only option.

"This represents a significant action on the part of the creditors to take additional steps to help consumers, which is our collective mission," said Susan C. Keating, president and CEO of the NFCC. "This will provide those in debt with more options to stabilize and rebuild their economic lives."

Those creditors are American Express, Bank of America, Capital One, Chase Card Services, Citi, Discover Financial Services, GE Money, HSBC Card Services, U.S. Bank and Wells Fargo Card Services.

Certainly, the agreement isn't binding, but banks and credit card companies may be starting to nod to the seeming incongruity of accepting bailout money, then showing little compassion to struggling consumers.

Such behavior has led senators to float the idea of an interest rate cap on credit cards, a notion that's gaining support across the country.

Still, banks continue to raise those rates in an effort to compensate for loan losses. Starting in June, BofA is raising rates for customers who have rates below 10 percent and carry a balance, the Observer's Rick Rothacker reported today.

These customers, who account for less than 10 percent of the bank's portfolio, will now pay rates in the low and mid-teens, spokeswoman Betty Riess said.

Bank of America did retreat this week from an earlier announcement that it was increasing the fee it charged customers when they make purchases or withdraw money without enough to cover it in their accounts.

The bank had been telling customers that it was raising its overdraft fee to $39 from $35, but that increase was suspended Monday. Although the bank is charging a new, one-time fee of $35 if accounts are negative more than five days, it also announced a more welcome change: If an overdraft causes an account to become negative by $5 or less, the overdraft charge will be $10 instead of $35.

Bank spokesman Jim Pierpoint told Rothacker that the general overdraft increase to $39 was dropped in consideration of the current economic climate, particularly rising unemployment.