Getting daily emails and comments from readers all across the country puts us in a unique position to spot trends in the financial world. One phenomenon we’ve been following for the last few months are dramatically rising Bank of America credit card interest rates.
As you know, Bank of America acquired MBNA in June 2005 and became one of the world’s largest credit card issuers. There were some technical glitches here and there as consumers had their accounts switched over to the new bank, but the process went pretty smoothly overall. Now, a few months later, Bank of America has been sending term amendment letters to card holders with rate and fee increases. Here are some of the stories we’ve heard:
- Del had his interest rate increased from 7% to 25% without ever missing a payment.
- Karl had his interest rate increased from 8% fixed to 22% variable. Bank of America told him it was due to his "high balance" on the account.
- Devender had his interest rate increased from 9.9% fixed to 19.99% variable with no explanation.
- Jim had his interest rate increased from 9.9% fixed to 25.24% variable. Bank of America told him it was due to his high balance and insufficiently large payments each month.
- Kim had her interest rate on a balance transfer increased from 3% to 22% before the end of the promotional period.
- Mitch had his interest rate increased from 5.9% fixed to 19.99% variable.
- Fiona had her interest rate increased from 9.9% to 23.99% without ever missing a payment.
- Bill had his interest rate increased from 14% to 23%.
- Shaun had his interest rate increased from 7.99% fixed (for 9 years) to 25.99%.
- Tammy had her interest rate increased from 9.9% to 22%.
- Brittany had her interest rate increased from 5.9% fixed (for 3 years) to 11.9%.
With 11 reported cases, this is more of an epidemic than a trend. If you have a Bank of America credit card, and chances are you do, check it today to see if your interest rate has increased. If they have, it doesn’t seem like there is much you can do to convince Bank of America to lower your rates. Your best bet is to pay off your balance or transfer it to an account with a lower APR. Here are few things to keep in mind:
- Yes, it is perfectly legal for Bank of America to raise your rates. Not necessarily fair, but legal.
- If you are transferring your balance, be sure to investigate the rates and terms for that with the new card. 3% balance transfer fees are pretty common.
- Avoid closing the Bank of America card. Closing older accounts can hurt your credit score. It is better to leave it open and unused with a high limit.
- Don’t forget to cash out any rewards or miles that you may have on the account.
- If you let your Bank of America card go "dormant," don’t forget to check in on it once in a while. Keep an eye out for sneaky annual fees or signs of identity theft.
- If you have complaints about your account, you can send them to the Comptroller of the Currency at Customer.Assistance@occ.treas.gov, the Federal Reserve Board, the Federal Trade Commission, Consumer Affairs, the Senate Banking Committee, and the House Committee on Financial Services.
And please keep us posted!
{ 32 comments… add a comment }
Just an update – I spoke with Bank of America and no, it’s pointless to try and get them to drop the interest rate. It seems that anyone who is carrying a high balance is receiving the increase. However, here’s the good news – if you reject the increase in writing (for those that just received the letter) they don’t cancel the card so your credit isn’t affected. You just can’t use that particular card again, or you’ll receive the increased APR. The bad news – they just upped my minimum payment. It’s interesting because I have a similar balance on another card with the same 9.9% interest rate and the minimum payment on that is $50 less than Bank of America.
Thanks for the update Fiona! Keep us posted
I was outraged at this. They said they had sent out a letter about it and I never saw it! I’m seriously upset and am waiting for a call back from the manager.
I had this happen to me in June of 2007 without noticing until I couldn’t pay down my balance at all and looked at it. Never missed a payment, never went over my limit, APR increased to 27.99 because of a high balance. I called and got it lowered to 24.99, that’s it. Big whoops. I’m done. Transfering my balances and leaving them behind.
BOA did the same thing to me – went from a 12% to 25%. My irate call got it reduced to 19.99% – WTH? They could care less too – transfer or pay off your balances – if enough people do this they will be begging our business back! But we must UNITE!
A bit off topic: Discover raised my rate 5%. When I inquired I was told the increase was due to the business difficulties they, Discover Financial Services, were facing. The representative said they raised the rates on over 900,000 customers:
http://ecoecon.wordpress.com
just fot info today mine was going up to 27.99 no lates, i am even getting other b of a offers on platinum business see ya later b of a
I got an increase as well.. unreal! But I lost the letter to write and decline it. Does anyone have the address fior Bank of America to decline the change in APR?
spmosher@yahoo.com or post it here or both please.
“Write us at FIA Card Services, NA, PO Box 15565, Wilmington, DE 19850. Clearly print or type your name and full credit card account number and state that you reject this change. You must give notice in writing…”
From my letter raising the rate from 14.99 to 24.99%. Pretty much done with BoA
Yep, same crap happend to me. The usual; never late, never over the limit and an 11.9% APR with zero annual fees, however, I did have high balances. BofA is jacking up my rates to 25.99% VARIABLE. I can’t believe it. I AM in the process of refinancing my home loan, I WILL pay off the damn card, and NEVER use it again (of course, I will check to see if BofA will sneak in some kind of “dormant card” fees, and watch for identity theft). As far as using the card for everyday purchases, forget it.
Barclays are worst from 3% apr to 27.25 and the members of management will not respond so please keep in mind this tactic is ongoing
Yes Barclays started out awesome once we charge over 1000.00 the rate went from 5.99 to 27.99 please watch your credit APR they are really applying the bait and switch I am station at fort hood and I am trying to inform all service personel and family
I got the letter from FIA card services which has both my Regions Bank credit card and my B of A card stating that my Regions card rate was going to go up to 27.99%(not sure if they ever sent me a letter regarding my B of A, it probably got thrown away as junk mail if they did, I’m lucky I decided to open this one). I called the number on my card and talked to 3 different people, the first of which tried to tell me the increase would only affect atm withdrawals. I told her no it says ALL transactions. I then was transferred to a second person who couldn’t help me and she transferred me to a third person. I have a zero balance on both my cards and told the lady that if they expect me to use either card again, it won’t be at a 27.99% rate, otherwise I would cut both up right then and close my accounts. They didn’t like hearing that. I ended up having both my cards’ rates being lowered effective in a couple weeks. I got names, department names and locations of the people I talked to. All together it took about 40 minutes of being on hold and talking to 3 different people to get this took care of. It can be done, especially if you have a zero balance they do not want to lose a customer!
Same thing happened to me! So glad I found this forum. I got the letter from BofA about a month ago and have sent them a letter to reject the interest rate change. I had to agree not to use the card again and I have switched a couple of automatic payments to another card (something I should have done months ago actually). I have no late payments and always, always pay more than minimum on my BofA card, and my other card. I am on schedule to pay both off this year, but have been focusing on the other card for a year because it had a higher interest rate than BofA. Well, BofA tells me TransUnion’s credit report is to blame. I can’t wait to get that in the mail and see why. Nothing has happened credit-wise in the past year, so why now??
Just a little helpful info for you guys that are receiving these rate increase letters. Talking with a regular associate or even a supervisor will get you no where. If you receive the letter about a rate increase you want to call in and inform the associate about the letter you received. Then tell them you need to speak with the retention department. Retention is the department that handles rate increases and lower apr request. Be prepared to hold, because that department has been backed up since these letters started going out in January. There is also another letter coming out in the next few weeks for reclassification of balance categories. Instead of just A B C and D category they will be broken down further.
BOA raised my payment from $86 to 250.00 overnight. I was never late and never missed a paymnet in my whole credit history.
This credit card thing is
a scam on America. They are nothing but scams. Did you know that the debt relief agencies are owned by the credit card companies?????
I just got hit by Bank of America, they lowered my credit line by 8500.00$, from 10.000 to 1500.00.
I have never missed a payment – (or) been late on a payment. And no explanation was even sent.
BTW, I just check and my current FICO is 715 to boot!
And – I read all my mail.
I toss nothing without at least looking at it.
What crap, I will also pay mine off – keep it open as sugested, but never use it again.
Adios, “Crap of America”
STAY AWAY!! My son who is in his early twenties received a credit card branded Harris Bank managed by FIA Card Services North America. He moved and missed a payment. My son and I have the same first and last name but different middle initial. FIA Card services uses a collection agency called ACT Collection Services in Kansas City. ACT Collection Services uses a third party service obviously from India. I received a phone call asking about a card that I did not own and after a few phone calls, established that it was not mine but my sons. I told them that I would contact my son and that they should no longer call me as he does not live here and is on his own. The phone calls continued – ACT continued to call my wife’s business line and any relatives who shared our same last name. This morning I received a call again from a person from India who told me “we are going to keep calling you until we hear from your son.” That was it for me – I called and spoke to people from ACT, FIA, Bank of America (who I believe owns FIA), and will contact Harris Bank. No relatives of a cardholder should be harassed that way. I am reporting them to the state’s attorney and will continue to spread the word about these practices. My advice is to stay away from any credit cards managed by FIA Card Services.
Search words: FIA CSNA ; FIA Card Services NA ; FIA Card Services ; ACT Collection Services ; Bank of America ; Harris Bank ; Harassment of cardholder’s relatives
They got us too. Interesting enough, when I got back to old statements (we have estatements only, have NEVER received a paper statement) they changed all the old statements from 9.99% which is what it has been since we got the card 2 years ago…to 8.99%!
I had been charged nearly $40 a month in finance fees, but I go back and look at all my old statements…ALL OF THEM…and they have changed the interest rate from 9.99 to 8.99 saying I have only paid $25 a month in finance fees.
To me this looks like they are trying to cover up earnings here.
yeah, that’s what I said….I will investigate further.
I used to love BOA, they were a great company. But over the past few months, their practices have become questionable. Including attempts to charge my checking account fees, to which when I called in and complained, the funds were immediately returned to my account.
If you still have ANY accts with BOA, watch them and watch them carefully!
Same here, always paid ontime at due time on internet, the excuse that the payment on 2 occasions was late, No way of reasoning with the SOB´s
HOW ABOUT A CAMPIGN OF Letters to the other thieves, our congressmen, maybe for fear of losing an election they might do something. Regards from Puerto Rico, US of A
I had this happen to me. I sent in the letter to stop the APR boost in time and all but an online game account activated for the holiday’s then billed me for a subscription to my boa card. The company of course took off the charge but now I have $200/month in additional finance charges to pay because of this error.
WTF?? gawd dammit! I had a look this morning and my account is over the limit!! its only a 2K limit and it was at a high balance due to some expences I had recently.. Now all of a sudden my APR went up to 29.9%!!! from 9.99!!!! I`m pissed!! and reading all these comments, it seems like there is nothing I can do about it!!
I dint know if I got a letter from them, but I`m willing to reduce it back to 9.99% and paying it off and keeping it off!!
I have always loved BOA, but this is rediculous!
BTW, I have a few other Amex cards, and a similar thing happened there.. they reduced my credit limit… I called and there was nothing I could do about that either! Obviously having that done, also changes your credit score! I never had any fees on that card, because i would use it and pay it immediatly (to get the cash back rewards).
I read that they did this to many of their customers..
I think the struggling economy is to blame for this, and banks are trying to fuck people over (the people who are still paying their accounts and maintaining balances on them) in order to make up for losses in home loans.. which only they are to blame for!! They dished out loans to peole who couldnt afford them in the first place!!
anyway.. just my thoughts!
Yesterday my brother tpld me his 6.9 apr with bank of america went up to 18.9% without warning and with an account in good standing. Having heard that I checked my account this morning only to find a similar scenerio from 9.7 to 18.9. I called boa and told them what had caused them to increase my rate only to hear them say it was the current rate. I have been a cardholder with them since 99 and felt they should have had a better explanation to whom they once refer to as a valued cardholder. This is ridiculous our tax dolars are going towards these greedy institutions to bail them out. I for once am paying off the balance and writing my local congressman and senators. This is in my opinion a white collar crime. They should have you agree on a new rate in writing before surprising you with a new rate. This is especially true if you have never been late on payment. I am truly disappointed with bank of america.
I also just had an issue with BOA. I know I was late on one payment in November, which was my own fault, but in the few years that BOA has owned my card (originally from MBNA) I have always paid on time and have always paid FAR more than what was due.
My interest rate went from 13.99% to 25.49%, nearly double. I spoke to someone who told me I had a letter sent to me and that it was on my statement that APRs were going up and I could opt out. I never received a letter (and I do check my mail) and the info on the statement was in fine print. Well, I have opted out and will no longer be using the card. I’d cut it up before Christmas and had been working on paying it off to begin with.
Their actions just furthered my desire to pay the card off and have nothing to do with them.
Talking to friends, they have had similar experiences with BOA and some had been long time customers in good standing.
I hope they fold.
I’d closed my account over a year ago befor i knew hit hurt your credit score. I’d closed it around 16%. like many others I’d never been late. Unfortunitly I don’t get statements in the mail I just pay my bill online. This month my min payment jumps way up, so i look and they bump my apr to almost 29%. I never got anything in the mail, or even an email about it. unforturnitly its in the online statements that I never looked at sence my account was closed.
I hate being this way but everytime I think about CC companies now I keep thinking about the movie “Fight Club” =)
I find it funny that so many of you believe that because you have a debt with a bank, you are entitled to certain privileges. Being a “cardholder” isn’t much different then owing money to the mob. They will do whatever they can to get their money back and then some.
People, the days of living off credit are coming to end. Pay off your cards and get out before you get buried in interest (these rates are only going to continue to climb), and learn to only spend money you have.
Bank of america has no right on screwing its own customers this way!! thats illegal and unacceptable. the slogan says: Bank of america bank of opportunity .. yeah right.. opportunity for THEM TO ROB and TAKE YOUR $$$
I just received BOA’s “Changes to Your Credit Card Agreement” notifying me that they are changing my terms from a FIXED FOR LIFE 9.9% rate to a variable on May 1 starting at 15.65% – of course, customer NO SERVICE didn’t help – what a surprise!
I will be rejecting this increase and will be moving ALL of my accounts from BOA. I have been a customer of BOA for ~ 20 years and will never use them again.
Hopefully, they will go out of business SOON!
Bank of America raised my APR 9.99 to 18.99. The reason: increased cost, which they are passing onto me. They apologized, b ut said that they appreciate my business.
Never late, pay more than minimum, but carry a small balance each month. When I asked BoA about this, I had to go to three supervisors, promised call backs and finally went to an Excecutive. I have transferred all balance over to a 4.99% APR card and will not use the BoA card at all. Will watch the card however.
I have a BofA card. I just looked and saw that my APR is 27.24%. I asked my dad how I should work to pay it off. He said to make extra payments and to call them and tell them to apply it to the balance so that I can skip getting hit with the APR. WELL, I called and the BofA rep said, “We can’t control where the payment goes, so we can’t apply it to the balance.” I asked what I could do to get my APR down. She said, “Nothing.” Well, no help there. Thanks a lot Bank of America. My minimum payments are ridiculous, and with when I pay over $60, about $20 of that goes to the balance. I have missed some payments in the past, but not within the last year. If I ever do miss a payment, my minimum would be well over $100…again, only $20 being applied to the balance. I have tried everything. I have a friend who was the VP of BofA in Charleston, SC, and he even tried to help. The response I got from him was, “Ooh, nasty.” I told the last BofA rep that I was “…tired of getting raped by BofA.” Her response was, “Oh well.” I had the card closed a few years ago so I could pay it off and not spend the money. I don’t know if that already affected my credit, but is that considered closed as if I had it paid off?” If I pay it off, should I go ahead and tell them that I am fully closing the account, or will that hurt my credit, EVEN though the account is “closed”? I can’t make purchases, and I’m just making payments. macmcdougal@gmail.com
I think it’s funny how Kenneth Lewis, the CEO and President of Bank of America says, “Bank of America helps build strong communities by creating opportunities for people — including customers, shareholders and associates — to fulfill their dreams.”
More like…
“Bank of America helps build higer interest rates by creating traps and hidden fees for people — including customers, but not shareholders and associates (because who would we have to invest or work for our company if we screwed them over?)— to put them in debt to make it harder to fulfill their dreams. We also like to mail out pamphlets (with the money we get from you) with a million words and fine print, knowing that most of you won’t read it, alerting you that we are going to rape you with a higher interest rate. It’s our way of saying ‘We own you and there is nothing you can do about it.’ Thank you, America!”
Don’t even waste your time. The Comptroller of The Currency is paid by the banks. The Comptroller of The Currency will do nothing except forward your complaint to the bank who will basically send you a letter stating that they can do whatever they like and you should perhaps consider taking up kite flying or get lost (after the bank drains your accounts through perfectly legal fees, penalties, and other sundry charges). I will never put a dime in another American bank. Wise up America BofA and Wells Fargo are 2 of the most corrupt organizations in the U.S.(Stock ticker WFC for We Fleece Customers). Go find a small local credit union.
I use to work for Bank of America and I know how the credit card APR increase works. There are some card holders that never had an APR increase since 1996, because they have good jobs and had never paid late. What bank of america does is to check your credit history, your Social Security Number and everything and if they think you are earning less, or if your credit history goes just a few points down, they increase your APR a 5% maybe a 7% more, but if by any instance you pay late or go overlimit twice within 12 months…. They give you an APR between 27 and 29.99% wich is terrible 8-S