They didn’t even buy us dinner…

 This is one way they are ‘sticking it to us.’
I have a personal story too, but, I’ll wait until I’m a little more calm about things. BIG HUGS, Steph
Why is Bank of America raising it’s interest rates on it’s good customers?
BusinessWeek has just published an article about Bank of America’s recent surprise mailings in January to some of its customers, announcing "that it would more than double their rates to as high as 28%, without giving an explanation for the increase." These customers have good credit scores and hadn’t made any late payments, and those who called Bank of America to ask why this was happening weren’t given clear reasons. Industry experts say Bank of America has reached a "new level" of "lack of transparency in raising rates," beyond anything Citigroup and JP Morgan Chase currently practice, because BoA is apparently using some undisclosed internal metric to determine who gets the rate hike.

The easiest explanation is that BoA is just trying to get rid of customers who don’t make them any money, usually by carrying extremely low balances or no balance at all. But the anecdotal evidence suggests otherwise:

Michael Jordan, 25, a software developer who lives in Higganum, Conn., says he received a letter from Bank of America in late January advising him that his card rate would rise from 9.99% to 24.99%. The software developer, who earns $80,000 per year, says he was "shocked" because his payments had been on time and his credit score hadn’t changed in the last year. In fact, Jordan says, he has only $4,500 in overall outstanding credit-card debt on two cards and that, on the Bank of America card in question, he had paid down his balance to $3,000 from $3,700 last August.

Some analysts think the bank might simply be trying to shore up profits in anticipation of dealing with the "profit sinkhole" that is Countrywide Financial and the anticipated rise in charge-offs and write-downs as the economy continues to falter. "Boosting rates on existing credit-card holders is one of the quickest levers a bank can pull to try to boost earnings," says one analyst.

"A Credit Card You Want to Toss" [BusinessWeek]


8 Comments (+add yours?)

  1. Lola
    Feb 18, 2008 @ 15:16:41

    Well, that is just great.  I have a Bank of America card.  I ues it because of the low APR.  I can  ( and will ) take my business elsewhere if they increase my rate.  I have learned through the years that credit card companies are a dime a dozen.  They don\’t seem to care how they treat their customers.  What ever happened to fairness, integrity and decency???  **sigh**  I rambled… I will get off my soap box now.
    Take care!


  2. Unknown
    Feb 18, 2008 @ 15:23:09

    New Endangered Species: The American Credit Card Customer

    Many Americans are saying that when you get little pieces of plastic from Chase or Bank of America, you are stuck with Credit Cards from Hell. I agree. After thirty years of good credit scores and no late payments on any bills, They both have the gall to raise my interest rate to over 30%. PLEASE POST YOUR STORIES HERE OR EMAIL THEM TO CREDITCARDHELL@HOTMAIL.COM. OUR VOICES MUST BE HEARD.Thanks to Chase and BOA, the American consumer may be the next endangered species. The DEVIL is not just in the fine print it is also in the lack of support and protection provided to us by Congress and the Whitehouse. They had no problem spending billions of our tax dollars to bail out rich people who put more than $100,000 into savings and loans even though the sign on the door told them that was all that was insured. But why can\’t they help the millions of hard working Americans that live from paycheck to paycheck and who are being taken to the cleaners by the Big Banks. We must demand a BILL of Rights for Credit Card Customers!Please visit for the story that ABC\’s Good Morning America did on the problem on February 12, 2008. The reporters were CHRIS CUOMO, JIM BUNN AND IMAEYEN IBANGA.You can also let Congress hear your stories or opinions please visit Permanent Subcommittee on Investigations initiated an investigation into unfair practices within the credit card industry. As part of this investigation, They commissioned a report by the Government Accountability Office (GAO) that was released in September 2006 and held a hearing in March 2007 that focused on three fundamental issues: grace periods, interest rates, and fees. The subcommittee plans to hold more hearings on other unfair credit card practices. If you would like to tell the subcommittee\’s investigative staff about an unfair credit card practice that you have experienced, please send an e-mail to mailto:creditcards@hsgac.senate.govAre we just peasants living in a feudal society created by BIG Banks? Now we know how repressed coal miners felt when they lived in company houses and owed their souls to the company store. They have taken our jobs overseas, sucked the profits out of American corporations, gutted the bankruptcy laws, destroyed the mortgage markets, and are trying to squeeze the last drop of blood from hard-working Americans.Some Important Points We Need to Consider:1 – When I went to check my credit scores and get my credit reports from the three CRA\’s Experian, TransUnion, and Equifax and found many discrepancies on my records. It is tedious work to even try to read them – not to mention try to get them corrected. Here they are selling false information about me and getting paid for it. What do I get? Higher interest rates and other problems. 2 – The federal government should mandate a specific easy to read format for all three to use so all Americans can understand them and make it easier to get them corrected.3 – We should get a copy of any reports that our sold by the CRA\’s. 4 – I am looking for an attorney that can help me copyright our family\’s personal financial information so I can permanently restrict access and charge a fee for its use. If the CRA\’s can make money off of my information why shouldn\’t I.5 – Also in 2007, our auto insurance company said that they would now base our premiums on the use of credit scores also. How does my credit score affect my ability to drive? The federal government should regulate or ban this practice also.6 – We should support Senator Levin\’s legislative efforts. On May 15, 2007, Senator Levin introduced the Stop Unfair Practices in Credit Cards Act, S. 1395, [PDF] in an effort to ban the unfair practices exposed in this investigation and to protect consumers who seek to pay off their debts in good faith.7 – If Chase and BOA felt the need to raise my interest rates to what amount to usury fees, then why do I get offers in the mail almost everyday from my current credit card companies that want to increase my limit and from other companies including American Express that want to give us their cards? We have received over 70 offers in the last six months. 8 – Why is it when we loan money to corporations that they only pay us interest in the form of dividends and increased stock value based on what THEY can afford. Seems pretty lopsided to me.Go Figure and stay in touch.


  3. Jean
    Feb 18, 2008 @ 16:03:54

    Exactly why I don\’t like credit cards.. I use cash or a debit card.. That\’s the only way to go.. that, or pay them off every month..give them nothing!! They\’re making huge fortunes, and we\’re subsidising them! I can barely bring myself to use a bank! It\’s awful when they\’re all just after all they can get, no one is concerned with keeping customers or customer satisfaction anymore..


  4. Daniel
    Feb 19, 2008 @ 12:11:32

    There are many credit card offers available in this super competitive industry.It\’ll not be easy to argue with the credit card issuer once they\’ve made a decision no matter what the purpose is.For me, I just go to the site above, get a good comparison and apply the one that I like.It\’s much easier than arguing with them.


  5. Jean
    Feb 20, 2008 @ 21:46:09

    Tag, you\’re it!! Go read my last blog…
    love you,


  6. Unknown
    Feb 22, 2008 @ 21:18:35

    If you think American Express is "one of the good ones", think again.  We have, for YEARS, always paid on time and more than the minimum.  Last month, without warning or notification of any sort, they froze our account.  We only found out when we attempted to use it at dinner one night and were faced with the embarassing situation of having the waiter bring it back to us.  When we called they told us they had done a periodic review of our credit reports and decided that our debt-to-income ratio was too high (a few months ago we bought a new house and put the old one on rent rather than try to sell it in this crappy market).  They said that as soon as the account was paid off, we would be eligible to reinstate it.  Since then we have made a couple of large payments in an attempt to pay it down.  Just today we received our new bill and noticed that our balance was still high, despite the large payments we had made.  Looking deeper at the bill we saw that our interest rate had shot up from about 6% to 30%.  Yes, 30%!!!!   Those payments we made over the past few weeks barely covered the interest.  Again, we recieved no warning or notification of any kind that this was coming.  That amounts to robbery as far as I\’m concerned. 
    I will never again, EVER, give American Express one cent of my business.  They have lost a very good customer.


  7. Unknown
    Apr 28, 2009 @ 07:08:59

    I recieved a letter from my credit card company unionplus mastercard in september, they asked to verify my union membership my interest rate would increase if i was not a current member, I sent the letter they had asked for and which they said they didnt recieve. I have tried several times to correct this and they said they will review my account my rate is now 24% why do we have to put up with this when all these banks are getting bailouts. mad as hell in michigancomplain and they said it would be reviewed that


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