Posted on 02/07/2008 3:56:07 PM PST by bjs1779
Bank of America abruptly notified cardholders in good standing their rates would skyrocket if they didn't opt out fast. Is BofA greedy or needy?
Credit-card issuers have drawn fire for jacking up interest rates on cardholders who aren't behind on payments, but whose credit score has fallen for another reason. Now, some consumers complain, Bank of America (BAC) is hiking rates based on no apparent deterioration in their credit scores at all.
The major credit-card lender in mid-January sent letters notifying some responsible cardholders that it would more than double their rates to as high as 28%, without giving an explanation for the increase, according to copies of five letters obtained by BusinessWeek. Fine print at the end of the letter—headed "Important Amendment to Your Credit Card Agreement"—advised calling an 800-number for the reason, but consumers who called say they were unable to get a clear answer. "No one could give me an explanation," says Eric Fresch, a Huron (Ohio) engineer who is on time with his Bank of America card payments and knows of no decline in the status of his overall credit.
Bank of America spokeswoman Betty Riess confirms some bank cardholders could be receiving rate increases for reasons other than declines in credit scores, such as running higher balances with their Bank of America cards or with other creditors. She says the increases are part of a "periodic review" that assesses customers' credit risk. She declined to say if the Charlotte (N.C.) bank had changed its credit standards thereby bumping some consumers' rates or how many cardholders were being affected by the review. Bank of America has 40 million U.S. credit-card accounts.
(Excerpt) Read more at businessweek.com ...
Welcome to the world of debt, people.
Its like no one even cares what interest rates the Fed sets anymore. The fed is so out of touch with the financial markets that the banks are walking in the opposite direction without a second thought. Sometimes, interest rates just have to go up I guess.
Too many amigos ran for the border ehh?
Credit card companies have a word for people who spend within their means and pay their bills on time, and that word is “deadbeats”. They make a lot more money on the idiot who is in over his head and carries a balance every month.
That’s why I don’t carry a balance on mine.
Capital One did this 6 months ago. I had two cards. The one with a Limit of 3,000 I paid off. The one with a Limit of 30,000 they sent me a letter saying it was a mistake and the same terms apply.
B of A just posted their worst quarterly profit in six years. Doesn’t take a rocket scientist to figure this one out.
That said, there is absolutely no reason any credit card company should lose money servicing a client, just because he is paying on time and not paying interest. It is a voluntary contract, and it is proper that it may be terminated by either side.
Geez! This was an old tactic of Fleet Bank, bought by BofA a few years ago.
Fleet was responsible for putting more New England companies out of business, than all other banks combined.
How do you sit down with your banker and demurely say “FU”!
Capital One did the same to me last year because I am a “deadbeat” as a previous poster described (pay my balance off every month). Guess whose card I no longer use? My credit union now gets the benefit of whatever finance charges I do end up paying.
Hey! I resemble that! When Discover jacked their rates over a year ago, I started running a zero balance. I buy the stuff I normally would, pay in full, and they owe me money. (8^D).
“The fed is so out of touch with the financial markets that the banks are walking in the opposite direction without a second thought.”
I think its just a way they see to recoup some of the money they lost on mortgages. They also realize that nobody can get out of the debt since its nearly impossible to write it off even thru bankruptcy.
Absolutely correct!
Was B.O.A. the issuer which pioneered credit cards for illegals?
>>>How do you sit down with your banker and demurely say “FU”!
It’s really quite easy. Just do it.
No, this is a case of the credit card companies having us by the short ‘n curlies.
The Fed is now trying to loan money at a rate below that of inflation. That is a situation where ANY FOOL could make money by borrowing and investing. This is not a liquidity crunch, it’s a credit crunch. No one trusts anyone any more so it doesn’t matter how cheap the money is, people aren’t lending.
According to news reports, you are right. Now we pay for it!
Bank of America's New Credit Card Targets Illegal Immigrants,
Filing bankruptcy usually works.
yep, Bank of Amigos.
I did not like the rate Discover offered me so I don't use it. I do pay them $2.00 a month to run a credit balance. This way they have to send me a check every once in a while to refund the balance.
“Filing bankruptcy usually works.”
Don’t forget about the changes to bankruptcy laws the banks pushed thru a very short time ago. Gee I wonder if they saw this stuff coming?
I'm sure they didn't. : )
Statistics show the filing rates are about the same. If someone makes less than the median income for their state they can still file chapter 7. I’ve even heard of some people quiting their jobs so they can do that. Otherwise I’m sure the credit card companies send W a Christmas card every year.
Oh I use it. I buy things I would normally buy, bank the money, and then pay it off in full every month. In the meantime, they owe me about $200.00 in cash-back money. It probably torques someone there, but I’m getting my old interest back from when they jacked the rate and a 30 day float to boot.
Pay cash, or do without. Layaway is an acceptable alternative. I don’t know why people think they need so much fancy stuff anyhow.
Yes.
I just received that letter on Monday this week. I have until February 14th to mail them a letter saying I decline the increase at which time my account will be closed.
I used this card for business expenses.
I just did a home equity loan (I have 100% equity) at 6.125% which I will use to pay off the BOA card, my wife’s MBNA (now BOA) card and do some home improvements.
I will, of course, close ALL BOA accounts. I closed Cap 1 about 2 months ago. Only card we have now is a Citi card at 11.5% fixed, and a Discover card at 12.2% fixed - neither has a balance.
Never again will I accept card offers with variable rates.
Only card we have now is a Citi card at 11.5% fixed, and a Discover card at 12.2% fixed - neither has a balance.
*************************************************
Those rates are only “fixed” until they decide to jack them ... and jack them they will when they see that you are
A.) using a portion of your HELOC
B.) your available credit line has decreased due to closing the CAP1 account 2 months back.
C.) your closing of the BOA/MBNA card accounts
I suggest dealing with a local bank or (preferably) Credit Union ONLY and getting to know the local branch manager.
If your FICO score goes down...If your debt increases, Yes, your rates will go up. All financial inst. follow the same formula. Keep your debt low. FYI..my debt is low and so are my rates. Should MY rates go up to compensate someone with high debt?
Fixed isn’t really fixed. Variable rates generally are ‘flat rates’ and go up and down due to the prime rate (down now as the fed is lowering). Getting rate jacked can happen on a ‘fixed’ again or a ‘variable’ rate account just as easily as the other.
But of course!
Should they go from 6% to 28%, perhaps not, but in order for BAC to buy (bailout) Country Wide and be profitable, they must find more profit centers.
Where? You might ask. Well from you, who is responsible and liquid.
Go ahead pay them off...go elsewhere...same situation at the other large banks.
Plus if you pay them off, that helps them because if reduces their capitalization requirements and allows them to loan more to folks who will pay more for money.
Raising your rates is a win only situation for BAC.
Only problem with this theory is if the rate jacking causes the said person to decide they really don't want to pay 29% interest and defaults leaving more defaults at BOA's door. They also have 1 less "Prime" customer if you do transfer it which makes their books look worse.
Pay off the full balance every month, and you never have to worry about your interest rate going up.
Great advice, but not really feasible for people already with large amounts of cc debt.
Guess you can say I'm on the Dave Ramsey Diet.
Hmmmmmm let's see, $1.00 per sucker per month times 12 months = $480,000,000 *extra* above *&* beyond the regular juice is collected.
Nice work if ya can get it, good job MBAs.
An excellent example of life in America, today.
Fabulous riches beyond imagination await those who can gather in the hordes.
...of ignorant.
Headline: NEW YORK — Bank of America Corp. has begun offering credit cards to customers without Social Security numbers, typically illegal immigrants . . . .
Step two:
Headline: Illegal immigrants in Arizona [and other states], frustrated with a flagging economy and tough new legislation cracking down on their employers, are returning to their home country . . . . (leaving behind BoA credit card and other debts?)
Step three?
Headline: Bank of America raises INTEREST RATES on MILLIONS of their CARDHOLDERS! . . . .
quite a scam, huh?
Profit ping
I bet they are front and center at all the colleges this fall, trolling to open cards for incoming skulls full of mush.
Usury is a crime.
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