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.
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