The agreement with the Consumer Financial Protection Bureau and the Comptroller of the Currency includes $727 million in refunds and $45 million in civil fines.
The bank, the nation's second largest, separately estimated the combined payments would total $783 million.
From 2010 through 2012, bank representatives misled customers about the true cost of credit card debt-cancellation products purchased as protection in case of a job loss, disability or retirement, the CFPB said.
Roughly 1.4 million bank customers were affected, the consumer agency said.
Additionally, the bank improperly charged an estimated 1.9 million customers for credit card identity-theft monitoring and reporting services they did not fully receive. The unfair billing occurred from at least October 2000 through September 2011, the CFPB said.
The agreement marks the fifth recent government settlement with a major U.S. bank involving credit-card practices and the largest single refund action secured by the consumer agency.
"When we see credit card companies charging customers for services they did not receive and using deceptive marketing to pitch products to consumers it's important that we take action," said CFPB Director Richard Cordray.
Bank of America spokesman Tony Allen confirmed the settlement and said the payments were "in line with what we expected." Most of the refunds have already been issued, said Allen.
He added that the bank stopped marketing identity-theft protection products in December 2011 and ended debt cancellation offerings in August 2012.
Most other U.S. banks have stopped offering such credit card add-on products amid criticism by government regulators.
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