Reader Reports Dramatic Bank of America APR Rise

We received a shocking email from a reader called Del earlier this week. He wrote in to report on a crazy situation that occurred after his credit card switched from MBNA to Bank of America ownership:

After Bank of America bought out MBNA bank my credit card changed over and they increased my interest rate from 7% to 25%. I have never been late with my payments to anyone and have an excellent credit report. When I opened my latest statement, I was shocked to see the doubling of my interest rate! When I contacted BofA, I was told that a letter was sent to me asking if I wanted an increase in my rates and that by not responding with a no, they went ahead and increased them [to 25%!]. I never received such a letter. Not only is this unethical, is it legal?

In my youth this was loansharking. I bring this to your attention for two reasons. First, all I ask is that this practice is brought to your attention so you can help others I am sure are being squeezed like this by them, and second to see if you have suggestions for how I could get a fair rate back. On second thought,  I plan to pay off all of my BofA account and never do business with them. What do you think?

What a horrible situation! Technically, it is legal for Bank of America to increase your interest rates as long as they alert you to the change somehow. This business with the letter asking you if you want to raise your rates seems completely absurd to me, but likely covers the legal bases.

If calling and demanding that your interest rate is lowered doesn't work, you should then start paying off the card as fast as possible. You may even want to transfer the balance to a different card with a lower rate. When the account is paid off, do not close it with the bank. Instead, leave the card open but don't use it. Closing credit cards can cause significant damage to your credit scores, so it often hurts you more than the creditor.  Keep the dormant card in a safe drawer at home for emergencies and check in on it once in a while to make sure it is okay. Letting the card go dormant is better for your credit scores and still "punishes" the bank for their bad behavior.

Have you received a letter like this from Bank of America? Have your credit card rates increased dramatically? Share your story in the comments section.

Comments

[Karl Schneider]

Bank of America recently bought MBNA a company I have had a credit card with for a 3 years with no complaints I have never missed a payment or been late I rarely make minimum payments in fact I usually make double the payment. After looking at my last statement they raised my APR to 22% with no notification even though I had a fixed rate of 8% with MBNA and have never defaulted. When I called to find out why I was given the run around for 2 days before I finally spoke with a supervisor who told me it was because of a high balance and proceeded to lecture me and treat me as though I were a criminal. I asked as to the legality of this and was told that I could waste money on a lawyer if I wanted to. Again I had a fixed rate never defaulted almost always payed more than the minimum and just because they bought out the company I had a contract with they can raise my rate an exorbitant amount with no notice ???? Even if this is legal it is certainly reprehensible unethical behaviour mitigated only by the fact that I can pay the balance off and cancel my account they will never have my business again. Although I must admit I never intentionally gave them my business in the first place.

[EmilyPeters]

Wow! Thanks for sharing your story Karl. With three confirmed reports of bad BofA behavior, this is getting serious.

[Devender Reddy]

same thing happened to my card. i signed up with MBNA with 9.9% fixed apr, now BOFA increased my rate to 27%, which is fraud. wehn i call them they just transfered me to the phone which says this center is closed. i have to close down the card with them right away.

i wonder if theere is any legal battle i can go for?.

[Katrina]

Interesting... BOA sent me a letter telling me my APR is going to be 19.99% variable starting next month. I have never missed or been late on a payment and have had the card for 3 yrs at 9.99% fixed. I called to ask why this was happening and the rep said nothing other than to hold on, sent me to another rep who tried to get me to apply for a line of credit! Do they think I am stupid?

[Jim G]

I also have Bank of America card that was originally a Fleet card. I had had zero problems with Fleet and enjoyed my 9.9% fixed APR (rare these days) and then Bank of America bought them. Initially when I was moved, everything transitioned and I thought things were fine. I use online banking exclusively to handle my account, see transactions, and make payments. Their online system conveniently does not show what your current APR is. Out of curiosity I called up Bank of America and found out my APR skyrocketed to 25.24% variable. I have been trying to get a better rate for a few months now and they claim my account is flagged because of a high balance and not making large enough payments. This is hard to do considering the bloodletting going on due the APR. What happened to the time when credit card terms fit on a single page instead of a booklet? They have wording in these things that lets them get away with anything, any time. I plan to transfer my balance somewhere else.

[Kim]

I also have an MBNA (now Bank of America) card. I received a promotional offer to transfer balances at 3% interest, which I did. Last month, I got a letter from MBNA saying that they were increasing my APR to 22%. They increased my APR before my promotional period was even up...how messed up it that? I never made a late payment either! I was going to reject the increase, but then found out that if you do, they will close your account. Since I didn't want to take a bump in my credit score, I chose not to reject it. Now I just have to find a way to transfer this balance to another card. Hopefully some laws will be changed soon to help out the people...not the unethical corporations.

[Mitch]

How is this bullshit even legal? The same thing just happened to me. I received a 5.9% fixed rate credit card through MBNA. Bank of America bought them out and I just received my most recent credit card bill. I looked at it briefly and noticed that my interest rate had skyrocketed 14 points to 19.99%. What a complete crock of shit! I can't believe this is legal. I called the place and they said they sent me out a letter saying they were increasing my rate, which of course I never received.

[Fiona]

The same thing just happened to me. I had an MBNA card and BoA bought out MBNA. I was happy at 9.9% - never missed a payment, always payed on time (same with all my bills) and then they decided to up it to 23.99%. Now, I intend to reject this, but can they cancel the card and demand payment in full if I reject it? Also, will rejecting it adversely affect my credit score?

[Bill]

I just got the same letter, saying mine was to be raised from 14 to 23% if I didn't respond. Obviously, I'm going to reject the amendment to increase my APR. The catch is that if the card is used at all, it will shoot straight up to that new number.

[Shaun]

I have had an MBNA card for 9 years, been at 7.99% fixed since I received it. I put over $100k on my card every year. My latest statement shows my new rate is 25.99%.

When I called I got the same story: In march they sent me a notice, if I had responded to the notice "rejecting" the rate change, my rate would have stayed at 7.99%, but since I didn't respond they can make it anything they want.

Anyone know a good class action lawyer?

[Tammy]

Same thing happened to me. I had a bank of america card at a comfortable 9.9%. It shot up to a whopping 22%.This puts quite a strain on my family. I am not even sure that I can make my minimum payment on time anymore.

[Brittany]

This is ridiculous. I just found out that my MBNA card which had a fixed rate of 5.9% for the past three years I have had it is now being bumped up to 11.9%. What the hell is going on here? I know my percentage rate is not as high as some of these other people who are getting the low end of the deal but where am I going to find the extra money to pay off this stupid increase. All of this stupid increase came right after I asked for an increase in my credit even though I have not and will not use this increase. This is getting to be a big problem and I am going to be paying off my credit card as soon as possible and BOA can shove it.

[tanya]

I just found out my apr went from 9.9% to 26.99%! My husband called boa and was told it was because of his high balance. I called them the next day and was told it was because my credit score had gone down then they asked me if I'd like to consolidate my cards. The guy would not budge on lowering the rate. I will never do any kind of business with them again!

[Paulette Anderson]

This same thing happened to me. I had a 7.99% rate and two months ago it jumped to 15.9% and the date it is due changes all the time so I have been late the past month. I also have two accounts with Bank of America due to the buyout by MBNA. The 7.9% card was with Quixtar and was supposed to be the rate forever until it was paid. I feel like I have been raped by this company and I am looking for other credit card companies that want my good credit. I had paid them over $1000 on Apirl 1st when my bill was due, but of course, the payment did not post until 4/2 and they socked me with not only 15.9% interest but and additional $39. I hate being treated with such shitty customer service and business.

[John]

I also received notice from Bank of America that they intend to increase the APR on my credit card from 9.75% to over 18%.

The letter gave me until May 1 to reject this change, but advised that I would no longer have use of the card.

I mailed the letter yesterday rejecting the change, but am ticked off by the way they handled this.

I have good credit and no late payments on anything. I have been responsible with my use of credit though this year I did rack up a rather high balance on my BOA credit card.

I hope that I can find a good card with an introductory rate for balance transfers. That way I can payoff this balance and be done with Bank of America.

[Kristin]

I received my statement today and my APR has increased to 25.9%, making my monthly payment $95 per month. I have cild and one on the way and I go to college full time, Ican not afford this every month. I've been paying over the min. balance and have made my payments on time, this is ridiculous. When I called B of A I was told by a "senior advisor" that there was nothing he could do and that my payment only increased a little, we a little adds up to an extra $400 a year I told him. Finally he said he could lower it to 21.9% like that's much better. I've emailed B of A about this practice, so we'll see if they will do anything.

[Kristin]

I received my statement today and my APR has increased to 25.9%, making my monthly payment $95 per month. I have child and one on the way and I go to college full time, I can not afford this every month. I've been paying over the min. balance and have made my payments on time, this is ridiculous. When I called B of A I was told by a "senior advisor" that there was nothing he could do and that my payment only increased a little, well a little adds up to an extra $400 a year I told him. Finally he said he could lower it to 21.9% like that's much better. I've emailed B of A about this practice, so we'll see if they will do anything.

[c]

I also received a giant increase from BOA although I have never been late and send more than the minimum due. When I called I was told it was because I didn't use my card enough. So, by not wanting to run up a large debt and using my card for major items only I have to pay an interest rate of 20.99%, nearly twice as much as I was paying? The woman at BOA did everthing she could to get me to transfer balances to the BOA cards and then she could lower my rates to 15.99% with a 0% interest on the transfer for 1 year. I went to Citi Card and got a 4.99% balance transfer for the life of the loan. Kiss off BOA.

[Matt]

My card was with MBNA before the buyout. About 3 months before the buyout I saw my rate change from 7.9%, up to 11.% in one month, then it went up to 23.99% on the third month. I called and asked MBNA why, and I was verbally told as the service rep was reviewing my account that she could see "NO REASON" for raising my rates, there were no marks on my account or any postings to my account in their system explaining the rate increase. But I could call back next month to see if they have a promotional offer. WHAT A LOAD!!!!! Then I find out why.... two months later Bank of America buys them out. Something to sweeten the pot before BofA signs on the line. Now that its BofA, and Ive had a checking account with BofA for a long time, since it was NationsBank. They held a large deposit of mine I was going to use to pay off that old MBNA card, for ten days, which costed me 200.00 in finance charges, that I wouldnt have had to pay if I could have had immediate access to the funds. All Around, Both companies deserve an old time tar and feathering. We need another Boston Tea Party on their asses.

[Frank]

I would say KUDOS to everyone who files for bankruptcy. It has come to the point that consumers have been completely ramrodded into this. MBNA and BankofAmerica want to act criminal? And they finance Bush? If you get money from criminals Enron, MBNA, what does that make you? If you WORK for criminals, what does that make you? The people who work for these companies should be ashamed of themselves, but of course, shame is a lost adage.

[Kevin]

I received the "letter" this week advising that effective Jan 19, 2008 my APR would increase from 7.90% to 24.99% if I didn't reject the increase. I have sent in my letter rejecting the increase and I also filed a complaint with the FTC and BBB as this appears to me to be a legal form of extortion.

[Tres]

The exact same thing happened to me. I have been a bofa customer for over 2 years now. I had a rate of 9.9% after my introductory rate. I have been using the card for a remodel of my home and intended to pay it off once I get the appraisal and refinance the home. I currently have a 10,000 balance on the card. My payments went from $200ish to $457 this month. My intererst rate is 23.9% now. Same story as all of the above. I never made a late payment and never went over my limit. I too felt this couldn't possibly be legal. I'd love to hear from someone who knows if there is anything I can do to lessen the damages caused by this. This is causing me a great deal of financial stress. I was also told that a letter had been sent and that I had the option to opt out of the increase. What kind of nonsense is that. Who would "Opt in" to that?
Please if anyone has any ideas...let me know.

[David]

I guess I too can add myself to the list of people being duped by BoA.

While jacking up my rates, they continues to send me teaser promotions. When they sent me a "wipe your credit clean" consolidation offer, I called to see what they would do for me.

Of course this was treated as a loan application which apparently allows them to review all of my accounts with them.

Based on my call to them, they rejected the "wipe clean" offer, proceeded to lower my account limits on two credit cards, and close a line of credit that I wasn't using. I'm sure this is goning to kill my credit score.

Keep in mind: I called them!

Whatever you do, don't call them!

Like many others on this post I always paid on time and have (had) an excellent credit score.

I too am doing everything to get out of BoA, including banking.

Do what I am doing, take your good debt to http://www.Prosper.com and borrow from real people.

I too suspect there is an anti-trust class action suit in here somewhere.

[David]

I guess I too can add myself to the list of people being duped by BoA.

While jacking up my rates, they continues to send me teaser promotions. When they sent me a "wipe your credit clean" consolidation offer, I called to see what they would do for me.

Of course this was treated as a loan application which apparently allows them to review all of my accounts with them.

Based on my call to them, they rejected the "wipe clean" offer, proceeded to lower my account limits on two credit cards, and close a line of credit that I wasn't using. I'm sure this is goning to kill my credit score.

Keep in mind: I called them!

Whatever you do, don't call them!

Like many others on this post I always paid on time and have (had) an excellent credit score.

I too am doing everything to get out of BoA, including banking.

Do what I am doing, take your good debt to http://www.Prosper.com and borrow from real people.

I too suspect there is an anti-trust class action suit in here somewhere.

[Rachel]

This is ridiculous. I never got a letter and I know for sure because I went "paperless" last year so every news about account change comes as an attachment that is called "Important information about your account".

I recently moved abroad and had to use my credit card more than usually for my first month and racked up a decent (though by no means absurd) amount of money. Not only was I charged a 3% foreign transaction fee for every time I used the card abroad (something that MBNA never did), that month my card's interest rate jumped to 28.11%. I have been an excellent customer never letting my ENTIRE balance go unpaid for more than three months, plus I've always paid more than the minimum payment each time--never ever late. Give me a break! I'm transferring and never using this card again.