Credit Card APR Magically Raises From 7.99% To 21.99%

J writes:

I get a letter in the mail yesterday from FIA Card Services about an “Amendment to your Credit Card Account.” I read it and it says that effective the first day following your statement closing date in March 2008 -
* My corresponding APR for “new and existing” category A balances (balance transfers) will increase to 21.99%
* My corresponding APR for “new and existing” category B balances (ATM cash advances, bank cash advances, new check cash advances, direct deposits, and cash equivalents) will increase to 24.99%
* My corresponding APR for “new and existing” category C balances (purchases) will increase to 21.99%
* My corresponding APR for “new and existing” category D balances (as of 4/19/2008 will be balance transfers, cash advances or purchases “as appropriate”) will increase to 21.99%
I keep reading and it says that I can “reject this amendment” by doing so in writing by 2/29/2008.

So, I called them last night to find out if my card/balance was affected by this as we have some promotional rates and a fixed rate of 7.99%. Guess what? It was!!!!

I asked the girl I was speaking with why I got this letter and she said that they indicate I have had a “high balance (which I can agree with)” for “quite some time” and they want to see it get reduced. How can I or someone “reduce the balance” when you jack up my/the APR thus increasing the monthly minimum payment and interest charges? I thought they “loved” consumers like me who carry a balance who seem to never pay it off (although I’m trying to)??? In addition, I CANNOT use the card whatsoever! If I do, then the “rate jack” (even with my letter of rejection), will take effect. I destroyed the card last night.

I’ve never been late with a payment and have tried to pay a little over the minimum each month.

I documented the call and conversation and made a copy of the letter I drafted and sent in case something happens.

I think this all came about from me calling them one night to see what they could do for me on a lower interest rate, payments, etc due to my wife’s medical condition, loss of most of her income etc. They wouldn’t budge and in fact, suggested that I contact a debt consolidation company that “they work with.” They even gave me their toll-free number! Next thing I know, I get a couple of notices in the mail (1 from FIA and 1 from Bank of America who is owned by FIA I think) stating that our credit limits have been reduced! Until this letter last night…

That’s a new one – we’re raising your APR as a way to encourage you to pay off your debt more. Could this be a new strategy? Are banks trying to raise their cash reserves by using a big fee stick to encourage people to pay off their credit card debt? Very strange, the credit card company should love J, people who only make the minimum payments can end up paying several times the loan’s value over the term. Maybe they figure he’s just a really big sucker who will never pay down more than the minimum, so why not ratchet up the pressure and squeeze him for even more dollars. It may be a blessing in disguise, if you have out of control credit card debt, the first step should be to stop using your credit cards, so by enraging you into cutting the card up, they may have done you a favor!

Remember, the minimum monthly payment suggested by the credit card company should not be your guide to paying off your credit card debt. It’s the minimum payment required to stretch out your loan nearly indefinitely. These two charts show the dramatic difference between what happens when you pay only the minimum monthly and when you start making serious dents in your debt.

creditcardmonthlypayment.jpg

Source: OnMyOwnTwoFeet

payments.jpg

Source: AllFinancialMatters

So get off that duff and start making those extra payments! As for everyone else, J’s story is a good reminder about when you get those credit card interest rate raise notices, or any other notice of a changing credit card policy. If you don’t agree with it, you usually have a minimum amount of time to dispute the change to contract in writing. And if you use your credit card at all after receiving the notice, it constitutes you agreement to the terms of the new contract. So if you get such a notice you disagree with, feed the card to Shredder McShredsky.

(Photo: Getty)

Comments

Edit Your Comment

  1. mwdavis says:

    I just saw a discussion on another blog where about 6 people reported getting BOA rate increase letters. Credit card companies are trying to boost their cash reserves, I think. Probably Citibank next.

  2. juri squared says:

    If it’s at all possible, he should look into rolling that balance onto a lower-rate card.

  3. DaveB says:

    yeah capital one sent me a letter saying I was going from 14.99(which is still fucking high) to 24.99%.
    I said eat my ass and cancel my card.

  4. Half Beast says:

    Ugh. I’d never think I’d be saying this…
    but FIA was much much less of a headache to deal with back in the MBNA days.

  5. riverstyxxx says:

    Look up a company called “Cash Call”. Their endorsement is gary coleman and their APR is 99.5%

  6. Tzepish says:

    @mwdavis: I got one of those on my BoA visa… it shot up from 7% to like 19%. I cancelled immediately.

  7. Plaid Rabbit says:

    I, as well, got a letter yesterday about this. I was going to submit it to Consumerist, but I thought I’d wait for someone else…just so it wasn’t me for some odd reason.

    But, yea, it was completely f*cked. We sent the rejection letter off this morning.

  8. Hawk07 says:

    7.99% to 21.99%? Don’t tell to many people otherwise everyone’s going to want that rate.

  9. headon says:

    I got one too. I guess they figure that with people having less money due to the recession now would be a good time to screw them.

  10. TWSS says:

    I don’t carry balances on any of my cards, but the rate-jack notices bug me, too (I got one from Capital One last year). I haven’t cancelled the card, because I’ve had it for so long that ditching it would ding my credit rating, but I haven’t used it since they raised the rate to > 20%.

  11. alice_bunnie says:

    One of our cards did this to us a couple of years ago and jacked us up to 29%! They decided we had too much debt, even though we were making more than min payments. We saw that if this company was going to do this to us, so would every other card we had. So, what did this prompt us to do? We went with credit counseling and got that interest rate down to 5.9%, even lower than the 10% we originally had. So, they lost money on the deal. Kind of stupid if you ask me. We ended up saving a whole lot of interest payments across the board. We had a plan in place to pay off the cards within 2 years anyway, so this just made that easier.

  12. FeedFaceCoffee says:

    Not sure if I was one of those with a “high balance” and thus a “high risk”, but I paid half my Amex Blue card balance and immediately my rate went down by a third of what it was, which is still not great but it shows that they probably do pay attention to your balance. The cash infusion that the payment came from was a low interest student loan. This was probably the best financial decision I’ve made. It seems that their high interest rates make you feel nearly helpless with trying to pay off high balances.

  13. Islandkiwi says:

    I don’t care if you have to sell off your computer, furniture, tv…credit card debt=financial death. Like many others I paid the price shortly after leaving college, I was late with a payment and my interest shot from 7.99 to somewhere around 24. I hated how much of my payment went towards just the interest. I transferred it to a new card for the lower temp rate and worked my ass off to get rid of that debt.

    Now I pay in full every month, and throw money into savings for those emergencies we all have.

  14. morganlh85 says:

    What they REALLY want you to do is transfer your balance to another card so they dont’ have to bother with you anymore.

  15. TechnoDestructo says:

    At least you got notification.

    Fuck you, Chase.

    @alice_bunnie:
    They saw you had a lot of debt and were making more than the minimum payment, so decided to bleed you while they could.

  16. SuperJdynamite says:

    I got a similar letter from BOA but it said my promotional rates would still apply. They’d better, because my rate is currently 0%.

  17. socalrob of the 24 and a half century says:

    I haven’t recieved a letter from BofA regarding a rate increase, they just took it upon themselves to do it. I started out with a 4.99% which went up to 9.9% and stayed there for 5 years. Just a year ago they made it almost 20% for no reason. I have had no late payments, usually keep a 0 balance, just had to use the card to purchase my Wii. Thats when I found out it was almost 20%. When I called to complain they told me I’m lying that the computer says it’s always been that high. I told them about my bills that say otherwise and they got quiet and asked if I wanted to cancel.

    They make no money off of me with the constant 0 balance I maintain. Now I just use it for groceries and other small errands and pay it off right away.

  18. marike says:

    You think 20% and over is bad, BofA jacked my husband’s interest rate to 131% after the balance was paid in full. That makes me wanna use it to buy me a Gawker t-shirt!

  19. alvarotobias says:

    I received the same rate increase from FIA, I charge about 2K a month, but I carry no balance. At the end of the month all gets paid. I really don’t care about the increase, but if I carried a balance it would have been an issue. Looking at the rates for cash call, I almost find it difficult to believe that anyone in their right mind would even consider a loan from then:

    Georgia:

    $1,500 Loan Product
    $1,000 Borrower Proceeds
    $500 Loan Fee
    141.42% APR
    12 Number of Payments
    $159.83 Payment Amount

  20. Rabbigrrl says:

    er, why don’t you write and reject the amendment?

  21. Kifune says:

    I got a letter from BOA yesterday taking my card from 14.99% to 27.99%! I’m about to write them to dispute (and shove it up their ass) and cut the card up so as not to be tempted to use it while I pay it down.

  22. chiieddy says:

    WHen I read this I’m glad I pay my balances in full each month.

  23. Coelacanth says:

    Ehh, me too. They upped it to 27.99%! I was frightened, but after calling them, they made it sound like by rejecting the Amendment, I wouldn’t have to worry about the rate hike.

    On a side note, they said the reasons were that I carried a “high balance” and only made minimum payments. I haven’t made any purchases on the account, ever (except a BT). Well, I was busy paying off a higher-rate card (Capital One) and submitting the minimum on the rest.

    Could the “debt snowball” strategy actually jeopardise one’s rates for paying off debt in this manner?

    Citibank will soon have a $0 balance. Guess who’s next? :P

  24. DanielleS1986 says:

    To get help with my credit card debt, I use this service called Credit Card Zappers.

    They have been able to reverse my interest charges.

  25. quail says:

    They’ve been doing this stuff for some time. At least she was smart enough to look at the rate increase. Who here hasn’t gotten some credit card amendment that’s written on tissue paper, is 4 pages long and written in 7 pt type and red lettering on a white background? Those guys actually higher marketers to figure out how to mail this stuff out and to make sure it doesn’t get read.

  26. nuevefiveoh says:

    I just got one of these for my BofA Visa (which, admittedly, has a high balance as well). They’re jacking me up to 24.99%! I’m going to re-read that letter and do my research, but I’m very tempted to send off a rejection letter. Asses.

  27. goodkitty says:

    Wow… Bizzaro Finance strikes again. The Fed lowers the prime rate, card companies jack up their rates.

  28. JohnMc says:

    I agree with MWDavis. The banks are already hurting from the housing burst and they are noticing many of their card holders with high balances now defaulting on the cards. So the banks are trying to bump down the default rates by convincing people to take their business elsewhere.

  29. bdslack says:

    To all the posters that commented on:
    6 Reasons To Keep More Than One Credit Card
    [consumerist.com]
    and told me I was a nut for not trusting credit card companies – here’s your proof.

  30. solidstate42 says:

    FYI, FIA Card Services is owned by Bank of America and is what was formerly MBNA. I intern at a legal clinic doing consumer protection and have dealt with FIA or their attorneys in Bankruptcy Court over the nondischargability of debt during bankruptcy. I can see why they take actions such as this this after learning some of the things debtors due.

  31. mantari says:

    I found the documentation I made at the time. CHASE tried it on me. Going from 8% to 21% for no reason other than they wanted the money. I could send them a letter, opt out… and still keep the account open.

    They wanted to milk me, but they apparently didn’t want to lose me as a customer. Asses.

  32. sleepydumbdude says:

    I had it happen to me just 1-2 months ago. I ended up doing a balance transfer to another card. Will end up paying that one off when I get my taxes back.

  33. nowrap says:

    Just another way CC co.’s try to take advantage of customers. It’s incredibly underhanded and yet somehow legal. Checkout Gotcha Capitalism by Bob Sullivan. He talks about this tactic among many, many others that companies try and pull. It’s really eye opening and makes you wonder why we live in such “fine print” and “hidden fees” society.

  34. nrwfos says:

    @bdslack: I never said you were a “nut”. I just said that having a credit card was almost a necessity today. And it is,but they are certainly making it harder to use one. They are scalping us with the interest. I suppose they are trying to get their $$ before the credit cards have a melt-down like the housing mortgages did. Or maybe hey are trying to become a little more solvent because of their sub-prime mortgage follies by getting higher credit card payments

  35. PracticalMagic says:

    I just have to say that approx. 15 yrs. ago, we found ourselves in major trouble with credit cards. I unexpectedly lost my job (downsizing) and had several cards with high balances. We ended up cutting up the cards, paying off the balances as soon as possible. We’ve not had a CC since.

    If we don’t have the money for something then we don’t buy it. We’ve had some close calls with money shortage, but we’ve always managed to get through it. If you ask me, CC’s are an unnecessary evil. My debit card works for everything I need.

  36. kc-guy says:

    All this outrage has resulted in one thing: anyone who can afford to pay off their balance is doing so– eliminating high-risk debt from the bank’s already hemorrhaging sub-prime mortgage portfolio.

    Consumers who do a balance transfer is effectively doing the same thing– eliminating the bank’s (admittedly lower) risk. The bank providing the transfer gets a chance to review the incoming investments, and since those borrowers have the financial sense to do a balance transfer, they are probably less of a liability than the guy the bank is now squeezing a payday loan out of.

    My guess is that the dispute letters are a method of separating the good debtors who manage their finances, pay attention and read the small print, from the more oblivious higher risk clients.

    I haven’t seen any letters yet, but I don’t have an account with any of the banks anyone else has mentioned. I use Discover (10.9 fixed, promo 1.9) and WaMu (8.75 fixed)

  37. gingerCE says:

    I haven’t gotten any letters about increasing rates but I keep getting those “checks” from an old BOA card I never use for 0% balance transfers–guess that’s how they suck people in, with these checks and then they hit you with the high rates.

    On the plus side, I bet this rate will cause this guy to quickly try to pay off this debt.

  38. Myotheralt says:

    @TWSS: Yeah, I wish they wouldnt sent those notices out.

  39. deweydecimated says:

    We haven’t had a balance on our BOA card for over a year. We got a notice saying that if we didn’t use our card, our rate would be going up to 20.99%! Um, 20.99% of zero is still zero, but we’re not sure if we should cancel the card over this tomfoolery or if that would somehow ding our credit, since we’ve had the account for a long time. Yes, rejecting a threatened rate increase on a card we don’t use could possibly ding our credit. The mind reels.

  40. Clay_in_TX says:

    If you tell them that circumstances are tightening up your budget and you would like them to lower your interest rate, it raises the red flag of default! So, they will jack your rate to make the most money on you that they can before you are no longer able to pay them.

    What drives me crazy is talking with people that have such loyalty to these unarmed bandits because they have “had this credit card for years”. All that tells me is, you have just admitted to being a real sucker.

  41. vastrightwing says:

    Interesting how they will change your interest rate on existing balances when they want more money, yet not lower the rate on the same balance when you negotiate a lower rate.

    Be afraid of credt cards, be very afraid!

  42. winstonthorne says:

    @deweydecimated: Just keep it for emergencies, and make sure that if you do use it, you pay it off by the due date – that way it doesn’t matter what they charge you for interest. It can actually be a good thing to have some unused revolving credit on your credit report.

  43. crappedcrusader says:

    Citi Charged me a $.50 “minimum finance charge” because I was responsible and did not carry a balance over from last month.
    I have an FIA card, and if they’re gonna treat me like that as well, I finally can cancel them and get an AmEx.

  44. whirlybird says:

    I currently have three “idle” credit cards because of this very situation. Over the last year, they all tried to sneak in rate hikes, and I declined per their instructions and shredded the cards. What pisses me off is that they continue to (a) raise my credit limit, and (b) send me those damn “convenience” checks, in an effort to entice me into using the cards, even though I’m not supposed to! (For the rich folks out there: I don’t just pay them off because I can’t afford to; I had to re-purchase everything I used to own after my divorce, and plastic was my only friend. At least I have a couch now.)

  45. CappyHead says:

    The same thing happened to me about 3 years ago. I’ve never had a late payment. Band of America said that the reason for the change was that they noticed I had “high balances” on many of my cards.

    I sent them a letter saying I refused the changes to my account, which froze the interest rate (at 5.9%) permanently. They occasionally try to send me a new credit card, even though the account is closed. I never activate it – I cut it up and throw it in the trash. My understanding is that if you activate the card, it means you’ve agreed to the new terms.

    I think it’s beyond slimy, and, as many of the posters have noted, if I was having problems paying my bills, how would jacking my rate north of 20% be helpful?

  46. theblackdog says:

    *waits for Compass Bank to jack up his rates*

    I was planning to switch to USAA after I paid off my debt, if my rates get jacked up despite working to pay off my balance, I think I’ll be getting their card and getting a balance transfer instead.

    Remember how those folks said that the next thing to melt down would be the credit cards? This will only speed it up.

  47. disavow says:

    winstonthorne has a point. Credit scores take into account credit utilization, or the total balance of your revolving credit accounts over the sum of their limits. Closing unused accounts could actually drop your score if it makes that utilization ratio increase.

  48. stanfrombrooklyn says:

    You folks with interest rates above 20% but with good credit history and stable incomes should check out Prosper.com. You can usually find financing at around 14-15% which over 3 years is a lot better than 29.99%.

  49. PiratePrentice says:

    @Kifune: We had the same thing happen to us last year. BoA had to trim some credit accounts due to a merger but we could never verify this with the various CSRs or their supervisors all of whom were uniformly inflexible with reducing the rate.

    Whole thing was strange as we had both had our FICO scores in the “excellent” range for the first time which made applying for a new card with a much lower rate a snap. Transferred the balances and pulled our checking and savings accounts as well.

  50. gemio says:

    same thing happened to me with my BOA card – this week. My story is exactly the same. My credit is great (I just checked it) always paid on time, over the minimum, and my card was at 8.74% for the past 5 years. i got a letter on tuesday with the same amendment that my apr was going up to 16.49%, because another credit card I have, which I also pay on time and above the minimum, is too near its limit and I am a risk to the company.

    Needless to say, I rejected the increase, and luckily I am in grad school so I can take out student loans to pay off and cancel this card. I will never use Bank of American again, after the callous way I have been treated this week.

    Bank of America = Slime ball profiteers

  51. gingerCE says:

    @CappyHead: I have an old ATT Citicard I very rarely use–only for my ATT bill because I get triple points on that — they recently sent me an offer for 5x points if I use my card at any restaurant–now I eat out more than I should–but I have to call in to “activate” this special offer. I think this is a ploy to change the terms because I do have a low APR on this card — 10.74%, but again, it’s a card I rarely use–and I pay off my balances in full every month, so even if they do raise the rate, I’m tempted to do this because the APR doesn’t affect me.

    I will say ATT is being aggressive about sending me incentives to use this card. They gave me a $20 credit if I would just use my card once. I used it once for $20. Then they offered me a $25 credit to use it a second time, so I did. And now this bonus point incentive.

    I also got an incentive from Amex–3% on any online purchases for a short period of time–I signed up for this–but noticed I didn’t get any 3% credit on my online purchases–did anyone else get this notice and not get the bonus percentage?

  52. darkrose says:

    I had the same thing happen with a BoA card that I took out before MBNA was bought by them. Never had a problem until one day my payment went from about $100/mo to $160/mo. Called them up and they said that they decided to jack my interest rates up to 27.99%. I immediately canceled the card and they were “kind” enough to “negotiate” a rate of 21.99%. I carried a high balance for a lot of reasons, and this actually hit while I was charging lawyer’s fees for a divorce. Nice, huh.

    So I called my credit union and they immediately issued a platinum card without ANY fuss and a 6% interest rate. They also screwed me on my payoff amount for the balance transfer, which I got reversed after dealing with half a dozen supervisors.

    I’ll never do business again with BoA again. The megabanks are the ones doing this garbage, the credit unions are keeping their rates low. The reason they get away with this is because they can ignore the state interest rate laws (here in FL it’s capped at 18% according to what I’ve found) by being a nationally chartered bank. I guess that’s another reason to go with the credit unions!

  53. LorneReams says:

    Make sure you remember to shut down any automatic transactions (such as Blockbuster, or in my case, Ebay), or they will raise the rate after you reject the terms and no amount of arguing that the 1.50 charge was not your idea will get them to reduce it. I had an incident with Boa when I rejected the terms to keep a 5% rate, and 2 years later ebay for some reason put an auth for like .50 on the card just to confirm it was alive. Not a charge, just a pre-auth. BoA raised the rate and would not lower it no matter what I did. I even had Ebay call them and explain what they did, but they didn’t care.

  54. chiieddy says:

    @gemio: Just note, the minute you have a $0 balance on any of your BoA cards, they’ll close the account on you (which can effect your credit score). I had them do that on an account where I rejected their change in finance charge billing methods to the split month deal (which sucks). I have since stopped using any card I have with BoA. I won’t let them get a cent in merchants fees from my purchases (since I don’t carry balances they don’t get interest from me anyhow). I also am a bit ticked they’re buying Countrywide and going to be holding my mortgage in the near future.

  55. charodon says:

    Wait a sec. “J” was enticed into getting this card by a promotional rate that apparently hasn’t expired yet under its own terms. Even if there isn’t a breach of contract here by canceling the rate early (was there something in the fine print of the offer?), that at least seems like deceptive advertising to me.

  56. gemio says:

    @chiieddy: yep – I know – but regardless, I plan on closing the account asap. I want to start really getting rid of the stupidity debt that I have anyway, there is no way I am going to take a 16.49% hit on purchases. – this may even cause me to use my credit a little more wisely….ugh

  57. shadow735 says:

    This is a new tacktic that most credit card companies are starting, its basically due to the fact that people are filing bky and going into foreclosure in droves.

  58. JulieG says:

    It sounds like the bank expects you to get into more trouble with your credit card account and that they are trying to get as much out of you as soon as possible.
    Try State Farm Bank. I have a credit card with them and they have been very easy to deal with and haven’t jacked up my rates.

  59. melmoitzen says:

    @gingerCE: re: Amex promo. I got the extra 2% bonus (online purchases in December) on my Amex statement that arrived ~2 weeks ago. The other 1% is included as part of your regular rebate calculation.

  60. econobiker says:

    @chiieddy: Bingo- I bet this is tied to the purchase of Country Wide. Maybe they are trying to reign in the money they need. Or they are actually starting to “offer” more realistic lending terms based on risk versus throwing out multiple low rates.

    Shadow735- Didn’t the banks already get the bankruptcy laws changed to protect their investments?

  61. coraspartan says:

    Okay, now I am frightened–I have a BofA card with a very high balance, and don’t recall getting a change in terms notice. I also just checked my account online and although there was a change in terms notice for December, it only referred to something about cash advances, which I never take. God, I hope I don’t get a notice that my APR is going up!

    Those of you who received notices from BofA, when are the changes supposed to take effect?

    If indeed they jack up my rate, I am going to have to cancel the card. If absolutely necessary, I will start using another card that I applied for awhile ago, received, and never activated. Hopefully I will never even have to activate it though.

    We are trying to pay off all of our debt within the next 20 months, so I don’t anticipate having any balances on any of our cards by Sept. of 2009, but if our interest rate is increased by more than 10% right now, that will significantly hinder our debt elimination plan. I fucking hate banks!

  62. gingerCE says:

    @melmoitzen: Hmm, my last Amex Bill didn’t reflect my extra online bonus–maybe in the next bill. I did purchase a lot of stuff online using this card because of the extra bonus, so I’m a bit miffed. If it doesn’t show up on my upcoming statement, I will email Amex to ask them about this.

    I usually use this card for restaurants but with the ATT offer–which is for six months, I think I’ll take advantage of that.

  63. coraspartan says:

    A question: if I end up telling BofA to shove it because they raise my APR, does that mean I have to close my account completely? If so, that sucks, because that is the credit card I have had the longest. That will affect my credit negatively and that really pisses me off because I have spent the last 9 years busting my ass to have good credit.

  64. Coelacanth says:

    The BofA CSR said that if you reject the Amendment, the account will be reported as open and active, but the current APR on your account will remain in effect. As long as you don’t make *ANY* charges on it, I was told that I’d have no need to worry about them applying the new rate.

  65. Steve518 says:

    I had the same issue with my BoA Mastercard. I sent in the rejection letter, and have not used it for any purchases (regular or monhly-automatic-renewal) since . I’m carrying a fairly significant balance and so far the fixed APR has stayed put, as long as I make my regular payments and don’t use the card for purchases AT ALL.

    The best part though, is that roughly every two weeks I get a mailer from BoA with a s***load of “preferred cardholder” discount coupons from various retailers enticing me to use the card to buy, buy, buy.

  66. thecandyuniverse says:

    According to FIA, if you have a high balance, some new, unspecified Federal law REQUIRES them to increase your monthly payments and interest. I have my card through my credit union, who sold the credit card line to FIA a few months back, and since then my monthly minimum payment has increased over $35/month, on a decreasing balance. I’ve always paid more than the minimum, but this constant increase in the amount they bill me is ridiculous.

  67. Pop Socket says:

    @coraspartan: If you don’t accept the change in terms, they have to keep the rate you had before the notice. But if you do ANYTHING with the card like making a purchase orhaving a late payment then they can change the terms. Your best hope is to cut up the card and set up an automatic payment until the card is paid off.

  68. ellaina says:

    I too received a notice this week about an APR increase. They want to raise mine to 25.99% effective March 2008…The change is for ALL balances, both purchase and cash (I wasn’t clear on that because of the wording in the notice, but 3 reps assured me that it is for ALL balances except any subject to a promo rate)

    I will be rejecting the change, but will keep the account open and unused.

    I’ve been a good little consumer for several years, accumulating a large balance, paying it off in chunks and starting all over again. Never late, credit is in great shape, and BofA just gave me another line increase a few months ago! I also was told that it was because I have a high balance and therefore am a risk. Whatever. I’ll take my never late, “high risk” business elsewhere, including my checking and saving accounts.

  69. sibertater says:

    @FeedFaceCoffee: The computer pays attention to your balance. :-)

  70. gingerCE says:

    @Pop Socket: I have to say I would never set an automatic payment plan. When I had bad debt on one card I set up an auto plan and agreesively also made payments–paying it off in full. My auto payment was several hundred dollars but after I paid it off in full, I noticed the auto payment now said the next payment would be 0. Well, the auto payment went through as previous even though the balance was at zero. I had 2 bank overdrafts because of it. Within a few days the credit card company refunded my money, Wamu, refunded my overdrafts but it was like a big warning not to trust auto payments.

    Schedule payments online to ensure they are never late, but do it monthly, don’t got to they autopay route on a credit card.

  71. DefinitiveAnn says:

    We had an 10.99 MBNA credit card for about 15 years. When they got bought by BofA the changes started rolling in pretty much immediately. The first was a change in the minimum payment to require 1% the principle balance in addition to interest and fees, which is actually not a bad thing at all. Soon thereafter, we received notice that our interest rate was going up to 19.99%. We were given 45 days to reject the amendment, and we did. They still kept sending convenience checks, which would have triggered the rate increase, so I had them stop sending those too, just in case of error.

    We have a high balance on this card, but the interest rate is one of our lower ones, so we aren’t making extra payments (we’re working on other payments first). We’ll cascade payments to this card as the others are paid off, but we really couldn’t afford to have the interest rate double AND pay 1% of the balance.

    They’ve since sent another amendment, which I’ve also rejected.

  72. theshitkicker says:

    You can always apply for a different card through BofA and take advantage of their non-online balance transfer that you can do over the phone. They have two cards going right now with 0%, one for 6 months and one for 12. Put the money in your checking account then use that to pay off your higher rate card with them. you pay the 75 dollar balance transfer fee, however, if you bitch enough you may be able to get them to reverse it by saying “the personal banker at the branch didn’t tell me there was a fee, or complain to the branch manager” They’d rather reverse the 75 dollar fee than hear you complain about it and/or lose your business.

  73. Ashcan says:

    I’m always amazed at the “I can just barely make more than the minimum monthly payments” folks commenting in here, but yet they still seem to be able to pay for both internet and cable TV. Pull the plug and get your debt in order first. Cancel your cell phones also.

  74. Opie says:

    @thecandyuniverse: Actually, the FIA only changed the minimum payment calcuation to be a higher number (to help eliminate infinite debt syndrome experienced by those who only make the minimum payment).

    IIRC, cancelling a credit card does not remove that card’s history from your credit report. So, I don’b elieve that your losing “9 years of positive credit” affects your credit score. Rather by closing that account you’ve reduce your total available credit, so your open credit utilization ratio goes up (the ratio of available credit to used credit).

  75. kahnvex says:

    I love these. The banks do this as a tactic to get you to go elsewhere. The reason for these types of tactics is that there is something in the risk calculation that makes them think you are at risk of default… high revolving balances, multiple maxed cards, high portion of income dedicated to unsecured loans, etc. the list is endless.

    The bank doesn’t think that anyone in their right mind would pay these rates, the bank wants you to close your account, keep your rate the way it is, and move on to be a risk factor in some other financial institutions ledger.

    Banks always send these notices out, most of them do so 60 days in advance of such a change, some only do 45. The legal requirement is -15-. I’ve never heard of any credit card companies being that shitty, but I don’t know anything about FIA.

    In these cases, if possible, you should never close the card, especially if it has years of positive history on your reports. Transfer the balance at all costs, never accept the first thing the rep tells you, and know that even -60 days after the change takes place- you can still “opt out” of the change in terms.

    Ask for a supervisor if they tell you that you aren’t able to. Or before the change occurs, ask to speak to the lending operations or credit review department, to have your situation reevaluated.

    If you have poor credit, you are most likely screwed, and closing the card is your only option.

    The fact of the matter is, for every one of you who had this happen, and says it was without warning, most of you probably threw the notice away thinking it was junk mail. I know I’ve done it in years past, before I knew about such practices.

  76. LemuelaMergus says:

    Advanta raised my APR from 7.99% to 35.08%! I cancelled the card. Does anyone know where one can file a complaint?

  77. Anonymous says:

    American Express denied my flexible spending account because they say my credit rating went down. So how am I suppossed to pay them. Also, Bank of American jacked up my APR from 15% to 30%. I would like to know the best solution to solve these problems as I do not have the money to pay this kind of APr. Thank you. Francesa