Cramer: Banks Just Need to Accept Lower Profitability

Bank of America’s decision to start charging higher interest rates on credit cards for customers who miss payments is not the right move for the financial institution, Cramer said Thursday.

While the Card Act of 2009 allows for such increases after proper notice, the "Mad Money" host thinks Bank of America needs to stay off "Washington’s radar screen." The Obama administration deems interest rate hikes as an attack on the consumer, Cramer said. So he would steer clear of any action that would appear to test the new law, especially since the Consumer Financial Protection Bureau is set to open June 21. Elizabeth Warren, a Harvard professor and banking advisor to Obama, is said to be under consideration for heading the bureau. Warren has publicly denounced those who seek to "water down" FinReg, as it relates to consumer protection.

“If the bank stocks are ever going to go up, move in our lifetime, they have to wait a decent interval before they start raising rates and showing strong profits.” Cramer said, adding that banks should simply accept a lower level of profitability for the time being. “Otherwise your underperformance could last for a generation rather than just 2011."

When this story was published, Cramer's charitable trust owned Bank of America.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com