If you're considering applying for a Bank of America credit card, or are a current cardholder, it's worth taking stock of recent changes the bank implemented.

What happened

Just over a month ago, the Federal Reserve raised interest rates for the second time in the past three months by increasing the overnight rate to a target of 0.75% to 1%.

Man holding credit card and iPad.

Image source: Getty Images.

What it means for credit card APRs

Broader economic interest rates impact the interest rate, or annual percentage rate (APR), that card issuers charge members for carrying a balance. Issuers determine their credit card APRs by adding a pre-determined margin on top of a floating benchmark rate, commonly the U.S. Prime Rate.

Cardholders won't see their interest charges skyrocket because of this recent rate increase alone, but the cost of carrying debt is inching higher, and that trend may continue throughout 2017 across credit card issuers.

What it means for Bank of America credit cards

Bank of America increased the variable APR on its suite of BankAmericard-branded cards by 0.25 percentage points. Here's more on the changes to some popular offers.

  • BankAmericard Travel Rewards -- The BankAmericard Travel Rewards card's regular APR for purchases and balance transfers increased to a range of 15.74% to 23.74% from 15.49% to 23.49%. The card's other valuable perks remain intact, including a 20,000 points sign-up bonus for qualifying cardholders (worth $200), which takes affect after the cardholder spends at least $1,000 on new purchases, and unlimited 1.5 points per dollar. (Read The Motley Fool's full review of BankAmericard Travel Rewards to learn why we picked it as one of the best travel credit cards.)
  • BankAmericard Cash Rewards -- Importantly, the card's sign-up bonus and lucrative cash-back program didn't change, but the regular APR for new purchases and balance transfers increased to a range of 13.74% to 23.74% from 13.49% to 23.49%. (Read The Motley Fool's full review of BankAmericard Cash Rewards to learn why we picked it as one of the best cash-back credit cards.)
  • BankAmericard -- The card's most valuable perk may be its promotional APR offer, which remains unchanged. The regular APR for purchases and balance transfers increased to a range of 11.74% to 21.74% from 11.49% to 21.49%. (Read The Motley Fool's full review of BankAmericard.)

What it means for you

While this update is specific to Bank of America credit cards, similar APR updates have been implemented across issuers on the back of the Federal Reserve raising rates. Cardholders with credit card debt will feel the brunt of recent changes as higher APRs are charged to their interest-bearing balances. If you're carrying debt, this may be prime opportunity to take advantage of a promotional 0% APR offer to pay down high-APR balances more quickly.

Although everyone's personal financial circumstances are different, we Fools believe cardholders will fare best by paying off balances each month to avoid interest charges and to harvest the full value of rewards and sign-up bonuses. There's no sense in spending to earn rewards at a single-digit rate, only to watch as they're eaten up by far higher double-digit interest rates.

Our picks of the best balance-transfer credit cards cover a handful of popular offers to consider for cardholders wanting to pay off debt faster. These include the BankAmericard Credit Card, which includes a promotional 0% APR for balance transfers spanning 18 billing cycles.

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