It's Baaack! Bank of America Credit Card Rate Increases Strike Again

At the start of 2007, we posted an alert on the blog about Bank of America customers receiving significant rate increases. Usually, these were customers who had a low 9% fixed rate for years and were carrying balances on the accounts when their rates shot up above 20%. We received over 20 comments from readers at the time reporting the same increase had happened to them.

Now, at the beginning of 2008, it looks like the Bank of America rate increases have returned. Apparently BofA makes a New Year's resolution each year to scrub out customers with low rates. One reader reported that Bank of America said they've just sent 1.5 million of these rate increase letters.

Here are some of the reports from consumers we've received today:

I just received the letter wanting to jack me from 11.99% to 19.99% - My minimum payment is $143 a month and I pay $702 every month! Way over my minimum. I have never been late. My balance is a little high, but not that high. Barely over 1/2, which I guess is why they "only" want to raise mine to 19.99% instead of 25%, like others. I too am writing to reject the terms and if anyone starts a class action suit, I would be happy to add my name to the list. They also told me not to use my card after February 29th, if I reject the terms or they will automatically go into effect. This thing is getting paid off and then they can pay to send me a paper statement each month on a $0 balance!
- Mary Lee - 1/22/08

Just had the same letter up from 14% to 27.99%, over 6 years of no late payments and because my balance went up they are screwing me!!!
- Matt - 1/22/08
 
Just got 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
- Paul - 1/22/08

Same thing happened to me with Bank of America. 9.9% to 24.9%, but am sending a letter rejecting it. Screw all the credit card companies. Beware of Chase/JP Morgan, they will take your intro rate of 5% or so and put it to 29.99% then claim you sent one payment in late.
- TS - 1/22/08

This just happened to me. I had a MBNA card that was purchased by BofA and today received an amendment letter stating my rate would increase from 14% to 27.99%!! Doubling. I haven't been late on this card in over 5 years and the customer service rep said it was due to a high balance. How the hell can they do this? I can choose to reject, but then lose the use of the card and a 10 year history with them. I am going to transfer the balance to god knows where I guess. One thing he said was that I was not alone and that over 1.5 million customers were sent these letters today.
- Saluki - 1/22/08

Same here. 9.9 to 23.99%. Getting screwed like everyone else. I'm onboard with signing a class action lawsuit.
- HK - 1/22/08

Wow, I'm not alone. I thought I was a good, responsible customer of BoA who made their payment on time. I guess that's just not enough for BoA. Same as everyone else, I recieved one of these letters today, saying that my 9.99% APR was going to be changed to 23.99% (if you're reading this you probably have the letter). This is highway robbery. Either you close your account (and still pay off the balance at 9.99%, boa wins) or you transfer the account (BoA still get the balance and makes money of past interest) or you pay the outrageous APR and continue to get screwed. I wonder if this has something to do with the laws trying to be passed stating that banks can no longer raise interest rates for missed payments, and too many people filing bankruptcy due to credit card debt. Sounds like this is BoA's last effort to suck money out of their customers. Sad, really. Wish I had known!
- Mark - 1/22/08

Have you received a rate increase notice from your credit card issuer? If so, think twice before retaliating and closing your account. Credit card account closure can have a major negative impact on your credit scores. It is better to leave the account open and unused if you can.

Emily Davidson – Credit.com credit expert and former TransUnion insider. Emily writes about credit reports, credit cards, loans and personal finance as the CreditBloggers.com moderator.

Comments

[Paula B]

There is a company called Credit Card Zappers that is supposed to negotiate stuff with your credit card company if you need help.

I used them to have interest charges and an overlimit charge removed from my bill.

[Jim ~ mydebtblog.com]

I have been fighting the good fight with BoA for over a year now. They jacked my rate from 9.9% fixed to a 32% default rate. I didn't make the payment late, it just didn't process on their time frame due to a holiday. Got late fee reversed and thought it was fine, no thanks, 32% APR for you. After 6 months I got it lowered to 25.24% and another 8 months to get it to 17.24% and this past December it is at 15.24%. They don't even want to give me back my original rate because I don't use the card. Why should I use their card if I have one with a 9.9% rate and doesn't give me such a headache? I threaten to transfer my balance all the time but they could care less. My wife is lucky to keep her original rate on an MBNA card because it is closed and doesn't get jacked by BoA policies. It's not worth the hassle dealing with those people at BoA, they just take more money out of you one way or another no matter what you do.

[chrissy]

My fixed rate was 6.900% on my platinum plus BoA credit card and I just received the letter saying it was increasing to 20.99%!!! I have had this card and this rate since 2004, and have never paid late or went over my balance either! This is ridiculous and i will definitely send the rejection letter and close my account. I am all for a class action suit, how can they increase a fixed rate????

[eric Fresch]

My rate letter stated an increase from 17% to 27.99%, and when I called to ask BofA about the letter, I was told that it wasn't sent by BofA, but it was up to me if I wanted to respond???????? Thinking that the customer service rep was just clueless, I called again and was deceptively told that my rate was only going up to 19%. (ABOVE PRIME, THAT IS!!!!!). Then, I expressed my dissatisfaction with this increase and asked what I could do about it. She said I could speak with a rate specialist, and I was placed on hold for one hour. Eventually I hung up. I am in the process of taking all my money and mortgages out of BofA for good (totaling 1 million dollars). I no longer wish to do any business with those greedy bastards.

[AlexRedd]

My guess is that Bank of America waited for the outcome of congressional hearings on credit practices before doing this. If you recall, BOA was unapologetic during those hearings in regards to today's subject, "universal default". From a business standpoint, if they will make money from this practice, why should they not?

[Kevin Jackson]

They did this to me twice, first it was MBNA 9% Fixed with good credit, then out of the blue jacked it up to 29% without any late payments or over limit.

So I paid it off, a year later B of A takes over for MBNA and get a new intrest rate of 13%. Did they learn from their mistakes? You guessed it, once I used the card again, I now have the same notice 29% since I used the card, again, no late payments ever. So much for customer loyalty and they wonder why people default on them so often.

I say if credit card companies can do this legally, then next time they want a bail out with our tax dollars they should be forced to the same exact rates they chared their customers. What, that might put them out of busness, too bad, so sad. Not all credit card companies do this. We should reward the ones that dont and punish the ones that do, after all, thats basicly what they tell thier customers.

[Brandon]

I have had a BofA card for over 5 years now. Never a late payment or overlimit. Today I received a letter stating that my fixed rate of 7.90% was being raised to 15.99% as of 3/01/08. The letter gave no reason. The letter stated that to reject this increase I could write to an enclosed address and pay off my balance at the current rate; but could not use the card any longer without the rate increase. I decided to call BofA and found out there is a special dept. set up for this mass letter as they stated. When I asked the woman in this dept. why my rate was being increased; she said she had no idea why. I asked if everyone got this letter with increases and she said a lot of people did. I explained all of the above to her and she said it was just the economy. This is such a scam; but what can you do. I noticed from previous post that it appears to happen when BofA is trying to raise capital for new acquisitions. i.e. MBNA, as stated in many post above and now my letter with the recent news of them investing in Countrywide. Has anyone else noticed this?
1-800-718-6257 - This is the number I was given for questions about this letter. It is called the Retention Dept..

[Richard]

I too received a letter from B of A today! They are raising mine from 18.24% on my purchases to 27.99% and my promotional that was supposed to be good until paid off 8.25% to 27.99%!! So if it's legal for them to go against their agreemnet for my promotional terms shouldn't it be legal for me to go against my sgreement to repay them? I've had my car for over 10 years with no late payments! I do have a very high balance on this card! I've been trying to pay my cards down and make a better life for my family! I just got married, i have a baby on the way and my wife lost her job and is now making half what she was! I swear it seems like I'll never get ahead! They want a darn stimuls for the economy how about passing laws against this sort of thing!!!

[Mary]

Just got the lovely increase letter from BoA...I will be rejecting by certified mail today and pulling ALL my accounts from B of A and recommending this to all family members and associates...they deserve to go under with business practices like that!!!!!!

[Danielle]

I called BOFA this morning after seeing so many ppl get letters and I had not. My husband and I have had an acct with them since 2004 but our rate is remaining at 14.24 and they said we have no increase coming. The rate specialist said in her words that ppl who are getting it have had high balances or late payment history. I say you get back on the phone with them and hold for the rate specialist.

[Fed UP]

I think it's irresponsible to advise the masses to continue to do business with an avaricious, underhanded company simply over fear of one's credit score being negatively affected.

I would rather take the ding to my credit score for a couple of months than to undermine my own principles and allow these companies to get away with atrocious business tactics.

There used to be such a thing in business practice called GOODWILL. Apparently that commodity has disappeared in today's society.

I would advise anyone who does business with such a company to immediately close ALL accounts and take your business elsewhere.

When it comes to credit card companies, we must understand that we have a choice as to whether we wish to be held hostage by our credit scores.

Businesses like these need a wake-up call.

[richard]

**Update to my earlier post**

They are not raising the rate on my promotional offer! But that really isn't the point here! They decide to pump money in to Countrywide and they are going to make us pay for it! All of our bank accounts are currently with B of A but not for much longer!!!!!

[Sandy]

I called BOA two times to verify, but as long as you send the rejection letter and not use your card, you can keep the current apr throughout the balance.

[Mike]

9.9% to 24.9% more than double my interest rate and I've never missed a payment... I'm not canceling, but the balance will be paid off by the end of the month. What is the point of being a good customer with good income if I'm getting treated like someone who defaults on their payments?

[Tim]

Yup, they got me too. from 9.99 fixed to 27%, no lates, pay more than minimum. They say my balances are too high, hmmm, my credit score is better than it was when the accts were opened. Also, if balances are too high, why do they constantly send out checks to write off of the accts that have balances too high?

[Eric Patridge]

If you have a facebook account and wish to join a group against BoA and their sudden and disloyal interest hikes, look for the group "Bank of America (BOA): Vote No Confidence"

[Amanda]

Another soon to be ex-BofA cardholder here...I also have a platinum plus card, and my rate is going from 15.74 to 25.99. Just 3 months ago they raised my limit (again). The "rate specialist" said I am "high risk" because of the high balance on my account. It's no higher than it has been in the past. I'm sure the reason for this is the new car I purchased just 2 months ago. I've been with them for quite a few years, never been late, paid the balance off several times, and also bank with them. I'll be rejecting the new terms but keeping the account open and unused. I'll also be taking my and my SO's checking/savings accounts elsewhere.

[kevin]

ive been a boa credit card holder for 5 years now, never been late or over the limit. the other day i was raised from 13.79% to 29.99% on an 8k balance for no reason what so ever. (note)none of my other accts are/have been delinquent in any form...for i have just checked out my 3 credit bureau reports, and my credit score holds steady at 735. furthermore i told them that my rate for this score should be around 9% fixed...they denied that quickly. they tried to tell me that they were only helping me out by doing this, i retorted(major expletive), because they were in fear because i have a high balance....i told them what do you care if im living hand to mouth...you are getting your money on time, and more than the minimum pmt. so i rejected the new apr, sent 3 letters with delivery confirmation in case they try to state they didnt receive them on time , like they convieniently do on occassion to try to make more revenue by lying-(i have proof with signatures and dates.) i will never use this card again...i will pay it off in full before june08,..and i will close the account indefinitely. i absolutely refuse to pay for boa's short comings, and the rotten bussiness ethics that they impose on good customers. i truly hope boa's greed runs that company deep into the ground. someone truly needs to stop these companies fron doing this. fact ! sorry for the rant, but this world and these businesses are really getting out of hand when it comes to exploiting good /legit ppl.

[ray]

A few years back we got extremely aggravated with BOA and flat out closed & paid off our BOA card. We had good credit, no late payments, nothing bad on our credit report, etc. Their customer service mocked us saying you only make so much a year...how are you going to pay it off...you can take it or leave it...we aren't going to do anything for you?

We'll some time had passed...we received a sweet intro apr for balance tranfers and got another one.

Yup...we received one of those lovely letters in the mail as well. They want to raise interest to 27.99%.

I'll be closing our account with them yet again!

We will never do business with them again...no matter how much time passes.

[Stephen]

Got the same letter jacking my APR to 22 from 8%. If you call them to complain, they will potentially relook at the situation. They wouldn't lower mine....just asked if I was interested in a personal loan to consolidate my debts. I told them forget it and to keep the APR at 8%. The woman flagged my account to not go up. If I see the APR going up, the balance is transferred!

[jacquelynemay]

i have had all of the above problems with B of A.
I looked into a class action lawsuit, but couldn't rustle up any interest.
SOMeONe needs to do this.
Count me in.

I am disabled and have a low/fixed income. Can't afford counselors, attorneys or advisors. Sometimes I don't make the best informed decisions-especially when the information given to us is convoluted.

Also, if you cancel your account when they raise interest rates it goes against your credit report score.
B of A has been screwing people since I can remember. I would have never had an account with them. They bought out MBNA----who else will they buy out?They need to be stopped.

Are we asking our political candidates what they are going to do about the outrageous amounts of money people owe on credit cards? we deserve it more than they do...

Will we get a bailout like those idiots who bought houses they couldn't
afford???????

[jacquelynemay]

Here's what they told me..
the interest rate will be raised from MBNA's 7.90 that they bought my account at to 24.99%.
I was also charged 2 fees of $39. One for not receiving my payment (which I -I mailed it Jan. 5) and another fee for going over the balance;which the late fee pushed me over.
They told me my check wasn't posted because I didn't write my account number on my check and it was probably on someone's desk ( so much for postmarks) I guess payments need to be sent registered mail. I do not trust the automatic deduction from my checking account especially after these kinds of stupid mistakes and explanations. I'll never let them have free reign with my bank account.
I was not well yesterday and shouldn't have been making financial decisions. I closed my account. When I called back today to say I made a mistake closing it, that i had been sick, they denied my request to reopen it and told me my interest rae would have jumped to 21.00% anyway.
They also kept offering me a Golden Consolidation loan instead of answering the questions I was asking.
I still have to send them a letter (REGISTERED) closing my account to retain my new percentage rate. That's 21.99% rather than 24.99%

it is hard to figure from reading the letter about change in terms but the bottom line is EVERYONE'S INTEREST RATE IS GOING UP TO 24.99%

Also, We received a "change in terms" letter a month ago. This new letter cancels out the other letter.

How confusing can they be?
This has to be bigger than ENRON

[kevin]

i hate to say this,.....but im glad im not alone in this matter, its not a misery loves company issue, but it amazes me that a good credit score and on time payments dont stand for much anymore.
please keep in mind that if you call and speak to a rate specialist, dont take their word for it that they will handle it and its not nec' to write the opt out letter,...its just a ploy for the bogus agreement to get lost in the shuffle so they can whack the ones that dont properly comply. i personally sent 3 rejection of terms(opt out) certified mail...with signatures,....just so they can try to play with me.(smile) it amazes me that ppl need jobs that bad in life to let boa brainwash them into lying to good customers...and believing what they do is right. hopefully karma will get boa, my fingers are crossed. when i walk into a branch to make a payment i laugh in front of everyone when the greeter asks me if i want to see about a mortgage from BOA,...now that there is funny.

[Amanda]

I had another thought on this issue. Seems I read somewhere that bofa may be having some difficulties following their purchase of Countrywide. Adding this to the fact that I have never been delinquent on *any other* accounts, nor with them, I wonder if this is a scare tactic to drive cash inflow. Think about it. A letter comes saying my rate is going to double on a high balance (which seems to be common to most of us), and my first gut reaction is to close the account and pay it off in full right away. Closing the account would only punish myself (lowers credit score) and paying it off in full right away just increases cash flow for bofa. Also, this letter seemed like it was intended to get attention and not hide the increase by burying it 3 pages deep. Times that by however many customers they are doing this to and....Think I won't be putting so much effort into paying this off right now just out of spite. I wasn't planning on paying it off in the next 3 months anyway.

[educated]

its funny how the debt consolidatition companies dont include that their way is also as bad as a form of bankruptcy. most of these companies collect your so called payments for months...before they send them to the credit card companies, sending you deep into default and ruining your credit beforehand. every credit consolidation company will lie to your face and not give you all the facts. ive done the research, trust me. they should be banned as well, seeing most of them are in cahoots with these banks anyway. hey , im willing to bet that you work for b of a