A Credit Card You Want to Toss

[Celebration]

http://tinyurl.com/37yha5

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 (NYSE:BAC - News) 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.

[glowing]

1. I wondered when that would hit the news.. There is a rejection letter

you must send in.... But if you do, you can't use the cc or have an overdraft fee come from your bank account.. or the rate defaults anyway.. I'm just using mine to pay off.. so, I don't care.. but this is insane and its because Bank of America is about to go bust big time.. Also, watch out for CitiGroup Financial.. and Chase.. those 3 are in some deep shit.

[Celebration]

4. How can this be good for business?

Also, this is a big time worry for the economy. The retail sector will be bailing out the banks, because people will be spending their money on these jacked up interest rates instead of clothes. This is apart from the fact that people can't get credit. If this spreads, we are going to really, really have the *mother* of all recessions.

But something had to give because the banking sector as a whole, as we know, HAS NO RESERVES. They have no money to lend, so they sure don't want any risk with whatever is out there now.

B of A is going to have some angry customers once they all catch on.

[glowing]

11. Oh, I can see some heafty lawsuits in the works, but in the meantime,

people are getting screwed... I also wonder just who is getting hit, everyone, or the middleclass.. and the elite get to keep their cozy rates...

What is going to happen is that people are going to either pay this off fast or switch the amt. to another c.c....in the end B of A gets their money. Other's will say F-it, and not pay it at all.. And if you have your house or apt. and aren't needing a new car anytime soon, most people are going to start letting their c.c. go. The middleclass welfare is going broke trying to pay it all back.

[Warpy]

22. I don't see this as a sign they're going bust

I see it as a sign of something every single credit card company will be doing in the very near future. Interest rates will escalate as they try to up those monthly minimums and squeeze as much money out of borrowers as they can before they're squeezed totally dry.

Most other lenders canceled equity lines of credit before BoA got around to it. BoA is just ahead of the curve in realizing they're going to have to act fast if they want any of those trillions in outstanding credit card debt paid back.

The subprime mess is just a little disturbance. The avalanche will happen when the whole plastic credit industry starts to go bust as people living on plastic stop piling up more debt at ridiculously high rates and spend only on the barest essentials in an attempt to service that debt while staying alive. Something will have to give, and the credit card will have to starve before the kids do.

No GOP or Wall Street/DLC Democrat has a clue what to do about this. We only hope they are flexible enough to take a few lessons from history that tell them the problem is longstanding suppression of wages combined with the overconcentration of wealth. Knowing the cause is realizing what the cure will have to be.

You can't rip off the consumers to fatten the rich for long before really bad things start to happen.

[rox63]

2. This is probably how they plan to make up for their losses on bad mortgages

On the backs of people who can't afford it.

[ursi]

17. I think you are right ...it's the mortgage losses

http://news.yahoo.com/s/bw/20080207/bs_bw/feb2008db2008026105146;_ylt=AnY5v5.zWBFn9TLxPEAjKQKyBhIF

[truedelphi]

3. Credit card companies can do whatever they want whenever they want

Thanks to Congress and the Bank reform measure of 2005.

[Adsos Letter]

5. Oh I am SOOO glad you raised this....

CitiBank canceled my card without even informing me while I was on a trip away from home; needless to say, it was "inconvenient" to suddenly have my card refused.

I tried calling their helpline (somewhere on the Indian sub-continent) and could get no answer for the cancellation...

Finally got transferred (after 5 calls) to a higher manager stateside, who informed me that they had made a "business decision" and that I should have received new cards in the mail (which arrived while I was gone) and all I would have to do was call for these cards to be activated...

When I interrupted to ask why my previous card had been voided, she hemmed and hawed for a bit about "business decisions" and then informed me that because we used the card often (like for all of our purchases), paid the entire balance off monthly, but had been less than 1 week late with two payments, a fact I readily acknowledge that they had decided to raise our rate to 26% on the new cards...and weren't even going to tell us...the letter that arrived with the new cards made no mention of an interest hike but merely sang the praises of all the new "benefits" I would receive from activating this new card

I informed her that I was making my own "business decision" to cancel their freakin' card, which she was none-too-pleased about...

I understand the need to keep current with payments, but this whole scenario just fried me...when she began a chirpy, moralizing lecture (and I do mean "moralizing") about paying debts (we had been 1 week late on 2 occasions, but still payed our hefty balances completely each time) I challenged her with the morality of usurious lending practices.

The actual value of the conversation sort of went downhill from there...



Man...I've been waiting to let that out for awhile...thanks... :hi:


EDIT:...for proofreading... :dunce:

[Celebration]

6. you are welcome!

What did you do about your trip? Did you have another card you could use? I want to get one of those airline mile credit cards for Northwest, because they add something like 20,000 miles if you do it before March 1. The problem is that Northwest is getting ready to be taken over by Delta, so it is hard to know whether it is worth it or not. I love upgrades, though.

Hope you had a nice time in India.

Another thought I had after reading your story is what a sorry job it is to work in customer service for some place like this.

[Adsos Letter]

7. We have switched everything to AmericanExpress....

we pay our full balance monthly and it gives us a cash-back bonus system on purchase volume.

Yes, my wife had her American Express card, and we had cash, too.

I agree that working in a call center must be exceptionally challenging, especially for those who are in Pakistan and India because they get a lot of crap and insults just because of where they are.

One of the things I am happy about, as far as personal-growth issues go, is that I have finally overcome the need to express anger in an unhealthy manner :mad: at the people on the other end of the line...not their fault, and they have to deal with angry customers all day.

That old adage about "walking is someone else's shoes" finally sank in, I guess...

I don't know about the Northwest skymiles, but I should think they would transfer to Delta...but I am just guessing here.

We get Delta skymiles, and recently took a trip to Mexico on 'em.

:hi:

[nightrider767]

8. Very Nice absos

Anger is the soul destroyer.

I work on that issue myself. I try, I try and I really do well. But when a bill problem arises and I enter the directory Matrix, my blood pressure goes into the red.

[Adsos Letter]

9. I hear ya'...

I think the cadence and tone of the automated systems sets us up for that...

But anger is a definite soul-destroyer, both giving and receiving.

:hi:

[Celebration]

12. Pakistan and India call centers

Have you noticed how they all introduce themselves as Bob or Bill, or something like that? I feel for them too. Then I always get these surveys about whether these people did a good job or not. I am torn. I have a southern accent, and often we literally can't understand each other that well. Usually I pass on the survey, or I just say something nice about the person, but in the comment section say something about the switch to the foreign country. Yes, I bet they are abused by some people.

Once you reached a person at the manager level, though, I think you had reason to make your displeasure known.

Although extremely inconvenient for you due to your trip, I think the approach of sending new cards that had to be activated is a lot better than just changing the rate with the instruction that, if you don't accept it, request that the card be cancelled IN WRITING. A whole lot of people don't pay attention to those mailings that are sent around by credit card companies.

In your case, if they had been smart, they would have reactivated your present card for two weeks or something. They should have had something in place for people in situations like yours.

The banks are totally up against the wall or they would not be doing things like this. They are really risking a backlash, a loss of customers, and everything. This is all causing a bunch of stressed out people even more stress, not something that we need. Many people can't afford to pay their balance off every month.

Can you imagine what is going to happen when people miss the notification date, and then get slapped with the additional interest payment? It will then be hell to be a call service center employee.

[Mojorabbit]

13. I had a woman from

India at a call center profusely thank me for bing kind. She must have had a bad day. I couldn't do that kind of work without internalizing all the anger from customers.

[Adsos Letter]

15. well...that' why I have worked hard on how I deal with

call-center people, including the ones who solicit me, unbidden, at home...I know it is just their job, and they are trying to put food on the table just like the rest of us.

That higher management person and I had quite the "chat" for about 15 minutes, however...the last thing I need is a lesson in morality from someone whose organization charges usurious interest rates.

And it did cost them THIS customer...even if I am a small grain of sand on their beach. :)

"Business decisions," you know... :D

[Common Sense Party]

18. You know what the CC companies call someone who pays their

balance off every month?

"Deadbeats."

Seriously. You're a "deadbeat" if they can't charge you interest or fees.

You're only a "good customer" (also known as a "revolver") IF you carry a balance and are occasionally late with a payment. That's where their profits come from./

[Extend a Hand]

20. greedy *ssholes

they're getting close to 2% off the MERCHANTS for every transaction.

[lligrd]

10. I've Been Credit Card Free For Over 15 Years Now

Also keep other loans down (pay cash for cars, furniture etc.) Have had no problems and turn down all offers with a smile. I may not get the rewards but I don't get the problems either and I know that the only debt I own is what is left on my house.

[abelenkpe]

14. This happened to me!

A few months ago after Bank of America had bought or merged with MBNA I got that letter. I had had a credit card with a crazy high limit with MBNA that I rarely used. Last time I used it was back in 2004 for something small. The card was paid off, and I never carried a balance. I had received my new Bank of America card and told my hubby: "We should really get rid of this thing. I never use it." So a couple weeks go by and then a second letter comes telling me Bank of America was raising my rates to 28% and that even if I never used the card I would be charged a 30 dollar service amount each month for NOT spending more than a set amount. So I called the next day and canceled the card. Never really thought about it since then. I remember being pretty pissed off. I had that card since 87 and was suddenly being punished for being a responsible card holder.

Strange things are happening lately. Seems like the rate cuts, lower interest of savings accounts and the increased fees charged by banks are designed to squeeze a little money from many. Has anyone here benefited from the rate cuts? Had interest lowered on a loan or credit card?

[mbee]

16. Big time crooks describe them. When our renewal

time came up last year they sent us a letter that there was a problem with the acct. and we would be getting a new card. When my husband went to activate he was told over the phone there was a problem with the new card and they would send yet another card which was received in a few days. We were suspicious they were up to something and, sure enough, even though we didn't activate any of the new cards they transferred our balance to the new card and then put a annual fee on the bill. As soon as I received the bill I paid it in full including the fee because I was afraid they would charge me some sort of fee for not paying the fee. They really didn't have the right to do what they did, but we are just glad to be rid of them. I can only imagine in my wildest nightmares what they are doing to people who carry balances. I have written to my representatives to complain about these predators, but I guess the politicians are on the take from these leeches otherwise why do they get away with this stuff?

[truedelphi]

21. Here is something that happened to me -

Several years ago, I made a payment to my Visa account. I had triple A credit at the time - never missed a payment.

My bank never processed the payment - I had made it over the phone as an electronic check.

Something snagged in the system - the funds were available and were earmarked for that expense.

My bank said it wasn't their fault, the credit card said it wasn't their fault.

No one cared one whit that I had a confirmation number for this or that the funds had been waiting to be processed.

Both agreed it was my fault! The credit card company immediately tripled the amount I owed each month, and doubled my interest rate. I cancelled that card.

[Art_from_Ark]

19. Meanwhile, in Japan, if you make a credit card purchase

they ask you up front if you want to pay in a lump sum, or in installments. If you pay in a lump sum, there is no charge, and they will automatically deduct your monthly balance from your bank account.

[fortyfeetunder]

23. I ditched them a long time ago

After I paid my last payment in full and on time, they came around next bill with a fricking interest charge. I figured there was a no-win...and mailed in the chopped up card along with the residual payment.