Ask Me Help Desk - Credit card rates

Credit card rates

You know all those notices you get from your credit card company that usually get shredded without much of a glance? You better pay attention to them. I received a wonderful notice that Bank of America was raising my interest rate, from 7.49 percent to 13.24 percent - nearly a 77 percent increase - due to the number of defaults they're dealing with.

Of course if you don't carry a balance then no problem, but unfortunately I do. I have never missed a payment, my credit is outstanding. Bank of America generously offered to lower my rate to 12.94 percent after much discussion. I rejected them and will pay off the balance at the old rate and close the account.

I also typed a nice letter to B of A's CEO informing them I would not be penalized for their malfeasance in loaning money to deadbeats, pushing credit cards on those who aren't credit worthy and convenience checks and balance transfers that force people into paying interest indefinitely on older balances. And just in case any of you have a B of A card and would like to do the same, here is his address:

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Kenneth D. Lewis
Chairman, CEO and President
Bank of America Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255

Check those notices people, you could be in for a big surprise.

I am credit card free Speech, but I appreciate this. I agree that it is not fair for you to have to pick up the pieces.

Hello Steve:

I'm not going to look back, but during the dufus' administration, when the bank lobby wrote the legislation that allowed the banks to arbitrarily change the rules in the middle of the game, I posted about it.

For sure, Elliot thought it was great. I don't remember you being on my side, though.

excon

Hopefully, the new Credit Card holder's bill of rights will be quickly passed, that deals with these practices.

Its not just BOA. I had a similar issue with AMEX. They raised the interest on one of my credit cards, even though I haven't missed a payment for years and it has a fairly high balance.

On the other hand in BOA's defense, I recently paid one payment late because I forgot there was a holiday so I missed the payment by one day. That card had a VERY low promotional rate which was jacked up, but they restored the rate when I called with an explanation.

Yikes! It furthers my devotion to not keeping a balance on my credit card.

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Originally Posted by excon

Hello Steve:

I'm not gonna look back, but during the dufus' administration, when the bank lobby wrote the legislation that allowed the banks to arbitrarily change the rules in the middle of the game, I posted about it.

For sure, Elliot thought it was great. I don't remember you being on my side, though.

excon

I don't remember it, ex. But if sticking a finger in the eye of solid customers was what you were referring to I think I would have been on your side.

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Originally Posted by ScottGem

Hopefully, the new Credit Card holder's bill of rights will be quickly passed, that deals with these practices.

Its not just BOA. I had a similar issue with AMEX. They raised the interest on one of my credit cards, even though I haven't missed a payment for years and it has a fairly high balance.

On the other hand in BOA's defense, I recently paid one payment late because I forgot there was a holiday so I missed the payment by one day. That card had a VERY low promotional rate which was jacked up, but they restored the rate when I called with an explanation.

I was a few hours late with making an online payment once (even though it was on the due date) and Citi worked with me that way. BOA would not budge. That's OK, though, I won't be paying their new rate for long (if at all).

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Originally Posted by NeedKarma

Yikes! It furthers my devotion to not keeping a balance on my credit card.

Believe me, NK, I don't want to carry a balance but sometimes you got to do what you got to do - life happens. A small adjustment I could live with, but this is extortion.

Hello again, Steve:

Here it is. It was a response to a question in other law, so you're excused: https://www.askmehelpdesk.com/other-...ard-57175.html

excon

Quote:

Originally Posted by excon

Hello again, Steve:

Here it is. It was a response to a question in other law, so you're excused: https://www.askmehelpdesk.com/other-...ard-57175.html

excon

Thank you.

B of A needs to raise $10 billion based on the stress test results . How did you think they would accomplish that ?

The White House leaked that info one day before the board of directors vote. They voted Ken Lewis back in anyway.

I'm not defending their actions here. But B of A would be in much better shape today if Paulson and Bernanke didn't strong arm the bank to complete the Merrill Lynch acquisition.When Lewis testified under oath that he was forced to go along with the deal he became a marked man (and yes this shameful move happened under Bush's watch ).
Busting Bank of America - WSJ.com

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BofA had discovered billions of dollars in undisclosed Merrill losses, and Mr. Lewis was considering invoking his rights under a material adverse condition clause to kill the merger.

Of course Lewis does not get a pass for overpaying for Countrywide which is the real source of B of A's financial issues .
Survive or fail ; B of A did not need the Fed's help or their now endless clutch on their business.

B of A has a history of scrubbing it's business of low interest credit cards.
I would shop around for a new one and transfer the balance... or even better... consider keeping a home equity line of credit and transfer any balances there if you must keep a bal.running . I would not keep a balance on the card . But... do not close the card... just keep it open and unused.

Unfortunately , under normal economic times the banks encourage running balances. But now they need the $$ and do not want to keep customers who run balances. Citigroup, Chase and America Express have all made similar moves.

By the way... credit card rates have been historically a state issue(In a 1978 SCOTUS ruling. The Marquette Bank opinion permitted national banks to export interest rates on consumer loans from the state where credit decisions were made to borrowers nationwide... effectively bypassing state usary laws.
http://www.bankrate.com/brm/news/cc/20020320a.asp
A 1996 SCOTUS decision cleared the way for high late fees .). New Fed rules were adopted at the end of Bush's term.. but they don't go into effect until 2010. Under the new rules, consumers will have to be given 45 days notice of any changes to the terms of an account.

But be careful what you wish for . Caps on rates allowed and other conditions would indeed be protection for the consumer . The cost will be in services denied for those the banks don't consider to be credit worthy.

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Bush has let his banker friends write the rules.

What rules were revised in the last 8 years that gave the banks extra ability to do this that they did not have before ?

[QUOTE=tomder55;1710460]

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B of A has a history of scrubbing it's business of low interest credit cards. I would shop around for a new one and transfer the balance... or even better... consider keeping a home equity line of credit and transfer any balances there if you must keep a bal.running . I would not keep a balance on the card . But... do not close the card... just keep it open and unused.

I immediately applied for and was approved of course, for a no annual fee Visa @ 7.25 percent. And once a business pi$$es me off that bad I'm done. The card will be gone ASAP, I don't need BOA. I may still consider a home equity loan but I'm not sure the benefits would be enough to worry about in my case.

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But be careful what you wish for . Caps on rates allowed and other conditions would indeed be protection for the consumer . The cost will be in services denied for those the banks don't consider to be credit worthy.

You know I'm a free market guy, but this is unethical. Penalties for deadbeats I'm fine with and people should know the terms before getting into something. But changing them in the middle of the game to penalize those who've broken no rules is more than I'll stand for.

The only reason I advise holding onto to the card unused is that closing out accounts like that tend to have an adverse effect on your credit rating. I have been holding onto a Discover card unused for several years now for that reason.

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Originally Posted by tomder55

the only reason I advise holding onto to the card unused is that closing out accounts like that tend to have an adverse effect on your credit rating. I have been holding onto a Discover card unused for several years now for that reason.

Is that an American-only thing? I recently moved all my banking over to another bank that was charging me no fees. I can't stand being charged fees for doing 98% of my banking online. I also cancelled their credit card and got one at the new place. I have no idea what my credit rating is as a score, only that my banker told me that I have a very high rating.

Don't know if it's a US thing or not. I kind of doubt it . You should check your rating independent of bank to be sure .

Don't Close Credit-Card Accounts - Kiplinger.com

I think it's 6 of one and a half dozen of the other. It kind of depends on your total available credit on the cards I believe and I'm not too concerned with that aspect. On the other hand, some are closing out unused cards for you anyway. I had an unused Capital One card for years and they closed it out a while back. I'll be fine without BOA.

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Originally Posted by tomder55

Don't know if it's a US thing or not. I kind of doubt it . You should check your rating independent of bank to be sure .

Don't Close Credit-Card Accounts - Kiplinger.com

I don't get the thinking behind stuff they say like:

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It's also helpful to keep open old cards because they show a good history of managing credit.

I have one card only that I use for large purchases or travel, then pay it down to 0 within a couple of months. I never understood people that carry 10 credit cards though I'm pretty it has something to do with affinity programs.

It is not my game . I just find this common advice given in a number of links .It is the way FICO is calculated . It has something to do with credit availability more than history.

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Originally Posted by tomder55

It is the way FICO is calculated . It has something to do with credit availability more than history.

Hey I'm learning something today. It looks like we calculate it differently: CBC Marketplace: Credit cards and credit scores

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Originally Posted by tomder55

it is not my game . I just find this common advice given in a number of links .It is the way FICO is calculated . It has something to do with credit availability more than history.

Actually it's both as I understand it, as they also advise keeping your older cards in particular. Either way, I'm not worried about my credit score. I'm sure if I needed something my 100 plus year old family owned local bank would take care of me.