I’m so glad Ana from DebtFree Revolution brought this scheme to her readers’ attention. I felt so outraged about this rate jacking that I want to pass this on to people that could possibly be affected.
Business Week released an article about the rate hike. Even Bank of America’s spokesperson had no reasonable explanation.
Bank of America had sent out a letter to its customers notifying them that their rates would increase. In fine print there was an opt-out clause requiring them to send a letter to Bank of America. Interestingly, calling the bank is not an option. If they did not do this then their old balances and new balances would increase.
The shady part of this hike was how Bank of America was calculating it. Business Week explains it:
What’s striking is how arbitrary the Bank of America rate increases appear, credit industry experts say… JPMorgan Chase (JPM) and Citigroup (C) announced ahead of Levin’s hearing that they would stop the practice of raising card rates based solely on FICO scores.
But Bank of America appears to be taking an even more aggressive stance because, beyond credit scores, it is using internal criteria that aren’t available to consumers. That makes the reason for the rate increase even more opaque.
I’m glad we didn’t get a credit card from Bank of America. What can you do? Here’s some things I thought:
- If you have a card with them and a balance on it, please opt-out of this rate hike. They make it difficult, but spare yourself a larger headache.
- Try to pay the debt off as soon as possible. You may want to use your income tax return if you got one.
- See if you can transfer the balance to a card with a lower rate, preferably one with 0%.
- Try to pay the debt off as soon as possible.
- If your Bank of America card is one of your oldest cards, don’t cancel it, as it could lower your FICO score. Just don’t carry a balance on it.
I understand banks are a business. What I don’t get is when they try to increase revenue by hurting their customers. That’s so short-sighted.