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

[Greg]

I just got the letter as well. This is utter BS ! Is there any class action or anything organized ? Are these rates in place to pay for the massive Q4 profit loss BofA incurred due to their incredibly short sighted mortgage loans ?? Why do WE get screwed for THEIR mistake ?? Been on hold 15 minutes now - getting a recorded message to call back at a "more convienent time". Convienent for WHO !? Me or them ??

[Kristin]

Add me to the list! I just got the notification a couple of days ago that my rate is increasing from 13.99% (which is already by far the highest of any other card I have) to 23.99%. This is crazy!

[Beth]

About a month ago, I received a notice that BofA would increase APR's for balance transfers and cash advances; I paid no attention because I do not utilize these card services. However, yesterday I received another notice that the APR for purchases would be raised to 19.99%. I HAVE HAD THIS CARD FOR 21 YEARS and was formerly receiving a 10.9 fixed APR!! Ironically, Discover recently did the exact same thing less than 6 months ago, raising my rate from a 9.9% fixed to 19.99%. Discover claimed this was a random decision affecting several thousand customers and was due to the fact that Discover was losing money. Amusingly, Discover has new TV ads for a Motiva card where customers who pay on time for 6 months receive the 7th month of interest CASH BACK!! What kind of company stiffs responsible, long-term customers for the sake of new business! I have an excellent credit rating (recently bought a home based on my credit alone) and have always paid my payments on time. However, these 2 cards contain my highest balances and I cannot pay them off. Not only does this seem to be extortion but also a form of "bait & switch sales"! With all these posted complaints, it seems to me that a Class Action Lawsuit is in order! I believe these rate increases have to be reasonable and incremental and that these companies should not be allowed to implement such a significant change instantaneously without any basis relating to poor credit or poor payment history! If being a good customer for 21 years has no weight, what does?

[Bank of America Hater]

Yes this just happened to me. I got a letter in the mail saying that they would increase my APR rate to 27.99% in March 2008! They said they did not have to explain why...but if I didn't write them a letter refusing the change by February 29th, 2008...and stop using my card permanently, then they would raise the amount. I talked to a few friends who had this happen to them too. My advice: Don't get a credit card with Bank of America. They have always charged me high interest and weird charges and now this percentage increase? I'm a working student and it's hard enough trying to pay off my card as it is. Almost half my payment is just interest and my APR is only 14% right now. This is just wrong of them to pull this on us.

[Denise]

I got this letter last week. My APR is going from 12% to 23%. I have not done this company wrong in any way. In fact, about a month ago they sent me a letter offering a pretty decent balance transfer offer, so what gives? I sent my letter rejecting the APR today. I will pay it off and let it sniff drawers, never to see light of day again.

[!]

I received this letter a few weeks ago as well--and plan on writing in to reject the amendment.

I spoke to BoA customer service, and was told that it was sent because my balance (while paid on time, monthly) hasn't varied enough. And that it looked like it was being used as a loan rather than credit card. That said, I was told to pay down my balance half--call back in, and speak to them about lowering the APR back to normal.

This isn't half as bad as losing use of the card if this weren't the case.

[Avelyn]

I got a letter like this, as well. I want to reject the new interest rate, but I don't have the letter, so I don't know what to write or where to send it. Can anyone post the address and format of the letter? Thanks!

[Paula]

I'm commenting on this post.
Reader Reports Dramatic Bank of America APR Rise
Posted by EmilyDavidson

I have almost the exact story. I received my card through MBNA 3 years ago. I had 7.9% for the lifetime of the balance on the card. I did receive the letter from B of A written in January (no date on letter other than,
January, 2008). For some reason I read the letter rather than tossing it in the junk mail as I do with the tons of B of A junk mail. I called and was told I had to write for the reason or I could opt to not use the card and keep the rate the same. I also have never been late, have always paid a hefty payment each month. I do believe it's an effort to make up for the Mortgage losses. I'm furious, and know that legally they are probably covered. I don't use the card for credit card charges, so don't increase the debt.

[Ryan Kirk]

I received my first credit card from MBNA (now BofA) in 2001 and have been a customer since then. I had some credit problems in the past but that has been almost three years ago. For the past 2 years I have been paying on time and reduced my credit card amounts by almost 30%.

I was put in an unfortunate situation 2 years ago where I can't work until I graduate this semester. For this reason I have had to use a little bit more credit than I would have liked. Despite that I have still maintained good credit and my credit balances.

About a week ago I received a notification that my rate would increase from 16.74% to 27.99%. So I had to use most of my savings to pay off my credit card so that I wouldn't have to pay the interest charges. On top of that, they couldn't tell me why I was getting an increase because they said I had to write a letter refutting the increase.

This is horrible service for everyone, and quite surprising to those that have good credit and have been good customers for a long time.

[debbie]

My husband received the same letter about 6 months ago for his formally mbna card. I notified B of A that I would not pay the higher interest rate and they said I could continue to pay my payments, but if I used the card at all the rate would be increased. About 2 months later I receive the same kind of letter for Discover card also and I have never been late on any bills and have an excellent credit score. Never less, I have notified Discover also that I would not use my card anymore and would not pay the higher rate either.

[Tine]

Format and address for rejecting BofA's APR increases as per instructions on my letter from BofA.

Type or print your name and full credit card account number and state you reject the change. You must give notice in writing; it is not sufficient to telephone. Send the notice to this address:

FIA Card Services, N.A.
P.O. Box 15565
Wilmington, DE 19850

If the card is used after the stated deadline [which varies by account], the higher interest will be charged. This applies to overdraft protection and all online services and subscriptions.

[Rhonda]

I got my letter a few weeks ago, and was furious. They tried to make it sound like it was something on my credit history, which is a big 'ol crock of shit. I've never been late, and my balance is less than 50% of my credit line. I promptly closed the account and rejected the APR. How dare they treat people like this? I will never, ever do business with B of A again. EVER! I hope they're happy with what they've done.

[Danielle]

Yup, got me too. Good credit, regular payments. Increased to 27.99% I rejected the increase and cut up the card and am looking forward to seeing BofA in court.

[Sharon]

Same story as everyone else. I had master card, then sold out to boa, (good name), payments always exceeded minimum and on time, or wwll before due date. Now increased to 24%. Sending opt out! Class action suit? Just let me know.

[ernie brown gomez]

B of A just raised my interest rate to 29% from 14% never been late but limit was too high although under limit

[Bill Anderson]

Hello,

same thing happened to me, had a line of credit through mbna @ 9.9 %, never late, BOA took it over, sent a letter indiacting the the rate would be increased to 24.98 if I did not send a response rejecting the increase..The account was already closed and I sent a response letter in as they requested, but the claimed they never received it, so now on a 23k balance, I have paid them more that 20k and the balacne has not dropped...I am unable to re-finance it, so I am going to let it default, I will trade a 30point drop in my credit score to save $550 per month...There should be sme protection for consumers against thes types of extortion tactics

[bob]

BoA are a bunch of bastards! Same thing happened to me and they won't change/lower my APR. I've (finally) almost finished paying it. Rest assured BoA, I will never do business with you again, and I'm about to buy my first home. I hope you guys go under with the housing crunch!

[Anne]

I too have been duped by BoA. I had one card with Fleet which I absolutely loved. Ditto for my BankOne and MBNA account cards. BoA bought them out and combined my cards into one. Cool. Then all of a sudden, I went from 11 percent to 23 percent. I did get a letter, and I called to opt out. They told me my rates would remain but I could not use the card. By the way, this does not mean the card is closed, so it does not ding your account....but if you use the card the rates skyrocket. It sits in my safe never to be used again.

But wait: there is more.

I got another card through them, and transferred balances. All was fine, and with the latest round of fed cut rates, they were apparently not making enough. They proceeded to cut my credit limits; now they all looked maxed out. See if you can guess what happens when they do that....yeppers, my 12 percent APR was a whopping 27.99. I never got any kind of letter regarding the change, and although the person was pleasant and changed it back with an opt out, there was a whiff of condescension as she recommended a credit help program through them. Uhhh, no thanks. YOU maxed out my cards, not me.

Now both are no longer usable as I opted out, and I am busting my butt to pay them off completely so they can sit and rot as I have no plans of ever closing them. I may even head to my friendly credit union and see if I can get a loan just to really piss them all off. :)

[kevin K]

Just happened to me... went from 10.90% to 19.99% for no reason. I have an excellent credit score and have always paid more than minimum..ALWAYS... Now I have to reject the new rate and cant use the card. THIS IS BULLSIT>>> Welcome to American Banking Business pratices.!!!! Does not one person have the ability to do or suggest anything??? This should be a crime and I take it as one!!!!

[Willie]

I always feel that Bank of America is bad for America they shoul change the name to Bank of Parasites.