Why all the fuss about Bank of America's jacked-up interest rates?
But now the flap has gotten worse, as Bank of America has raised rates for customers who don't even appear to have any new adverse credit information. How did they do it? Simple. They told customers they would raise their rates, and they did.
Are you in the bad habit of throwing out all those little papers that come with your credit card statement? Did you quickly discard a letter from your credit card company, thinking it was more standard fine print? I recommend you take a good look at those, because that's how these customers got stung.
A few weeks ago, Bank of America credit card holders got a letter saying they'd have their interest rates increased up to 28%, and these letters went to the ones with good credit. No reason was given, but a telephone number was available for those who wanted to know why. (Those who called say they didn't get a good answer, though.) Consumers had a chance to NOT have their interest rates go up with an "opt-out" clause, but many foolishly didn't pay attention and didn't take the opportunity to it.
Bottom line... rates went up for reasons such as higher balances with Bank of America or other credit card companies. The bank reviews credit information periodically, and now even when your credit score hasn't gone down, you can still be penalized.
This is just one more reason to avoid credit card debt as much as possible. Americans have been playing fast and loose with the plastic, and it's time to pay for those sins. Get your credit card debt paid off as soon as possible, because you don't know when you might be subject to one of these crazy policies.
Oh... and quit crying. Unfortunately, what the credit card companies are doing is completely legal AND it's disclosed in your agreement with them. Basically, once you have a balance on your credit card, the credit card company owns you. And it's your own fault for pulling out the plastic. And for Bank of America, it's just business as usual.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.