When Things Get Crazy, Rumors Get Even Crazier

We received a tip today that Bank of America supposedly plans to close nearly all of its customers’ credit cards on October 1st, but the only source we can find for this rumor is a single post at iReport.com, CNN’s public journalism free-for-all. Everything else online that mentions this is traced back to that one short post. So, until we find out more, we’re going to say this one is bunk—and a great example of how wild rumors can pop up during desperate times. (Thanks to Joseph!)

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  1. youbastid says:

    Well, I just got an e-mail today from BoA stating that my credit line was increased another $500, so I’m gonna say “bunk” too.

    • maztec says:

      @youbastid: Seconded, they increased mine by another $5k… gah! Like it was high enough already folks.

      • MercuryPDX says:

        Got at email at 3:00 today from them encouraging me to transfer my balances over to my (now) Platinum card…. the one that gets shredded every time the send it.

    • Tallanvor says:

      @youbastid: I just got my email this morning. –They just upped my credit by around 50%. Not that I need it, but whatever. In any event, yeah, I think that “tip” is bogus.

      • shufflemoomin says:

        @Tallanvor: Why would you accept a credit increase if you didn’t ask for it and don’t want it? This is EXACTLY what caused all this crap in the first place, giving people more credit than they want, need or sometimes can afford. If you increase people’s spending limit, they’ll simply spend it. Isn’t that what banks are supposed to be avoiding in order to get out of all this mess? Or have I complety missed the point of all this?

        • jackal676 says:

          @shufflemoomin: An increased spending limit will boost your credit rating since you’ll have a more favorable ratio of available credit. I requested an increase on my BoA card and got it about two months ago, and yesterday I also received an email reinforming me about that same increase.

    • socalrob of the 24 and a half century says:

      @youbastid:
      They didn’t increase the limit on mine but they did decide that they would cancel it and change it… again…

      First time was from a mastercard to a visa (without my approval), now its from one account type to another (again without approval) so I just said to hell with them and never activated the new one and am still using the old one fine.

  2. hypnotik_jello says:

    I can definitely see them shrink the credit lines but I can’t see a reason to close accounts of people who are low risk and have low revolving balances. Sure high balance = higher risk they want to mitigate but to flat out close all accounts seems like a stretch.

  3. pmcpa2 says:

    Friend of mine got a call from BoA saying “We noticed you haven’t paid your bill yet, even though it isn’t due yet, can you tell us when your going to pay?” He just laughed and hung up. He pays the full balance every month, so the call was very odd.

    • Baron Von Crogs says:

      @pmcpa2:

      Thats just freaking sad.

      “You’re gonna pay your bill… right? RIGHT?!?!……please?”

      • wagnerism says:

        @BaronVonCrogs:

        I call shenanigans.

        Phishing? or… RUMOR!

        I’m sure they have enough people flat out defaulting on their credit cards right now to not be wasting time calling on current accounts.

        ps: I heard we’re all going to die

        pps: On the moon.

  4. tingeyga says:

    @youbastid:
    I also got a credit increase from them today as well.

  5. oldtaku says:

    I just can’t see this happening. How can they milk you for unnecessary fees and mysterious overlimit charges and quietly jack your rate to 30% if your card is closed? In fact the problem is usually getting the [various bodily functions here] SOBs to actually close a card if you want them to.

  6. I heard a rumor that the United States Bullion Depository is moving out all of the gold reserves in armored train cars into a underground facility built during the cold war and that the operation is being personally supervised by Vice President Cheney. And that this is the real reason there are oil shortages in the South… because all the rail lines are being disrupted moving 10,000 metric tons of gold.

  7. oneliketadow says:

    @twophrasebark: Did you see any black helicopters?

  8. MsAnthropy says:

    Hmm, BofA, the bank that even now is giving out (relatively) crazily high credit limits for the asking, and then increasing those pretty much anytime you like, just because you ask them nicely. The bank that sends us about 30 balance transfer/cash advance checks on a weekly basis, desperately trying to make us get into debt with them when we don’t actually have any balances to transfer, and – what with not being certifiably insane and all – have no desire to take a cash advance on a credit card, ever.

    I don’t believe it for a second. BofA have evidently been exercising very little in the way of caution up until now, I can’t quite see them turning around and acting in a way that would seem ultra-paranoid even for AmEx, never mind BofA.

    I wouldn’t be surprised to see them trim some of the uber-high credit lines they give out so routinely, though – were they to do that, it might actually be a sensible move on their part!

    • funnymonkey says:

      @MsAnthropy: They’ve upped my limit more times than I can count, and I have never asked for a higher limit. I get at least two letters a week from BoA with those cash advance checks. Is there any way to get them to stop sending those?

  9. chauncy that billups says:

    No way. This is totally ridiculous. Most credit card holders are not behind or in default. It would be massively unprofitable for them to do this.

  10. This reminds me of the Simpsons episode when the teachers went on strike. Bart and Milhouse went down to the bank and started a riot. To paraphrase:
    Bart creates havoc at a bank, calling out “What do you mean, the bank is out of money?”, “Insolvent?!”, and “You only have enough cash for the next three customers?” Everyone panics and rushes the glass, demanding an explanation. A Jimmy Stewart-like bank manager stammers, “I don’t have your money here. It’s at Bill’s house and Fred’s house!” A fight breaks out.

  11. ratattak says:

    saying this DOES happen, what would happen to my debt? I’d assume I would have to pay it all back still, right? and what about interest? How would this work?

    (Remember, this is IF this was true… so far, I think its fake…)

    • B says:

      @ratattak: You’d have to pay it back along with whatever the interest rate is set by your agreement (which is tied to the prime rate, so the actual number could change). The only change for you would be you couldn’t charge any new debt.

      • ratattak says:

        @B:

        I just called up BoA. They said it was a speculation “the telephone game” incident. and it is untrue. We shall find out in 2days…

  12. I heard a rumor that the real reason Senator McCain wanted to delay the first debate was because Mississippi and some other states were having talks about seceding from the United States and refusing to honor the 14th Amendment until the federal government made each regional reserve bank independently solvent.

    And McCain was worried that if he was in Mississippi during the secession, then he might not be able to travel back into Washington in time for the election and would therefore be considered flectere si nequeo, absent from American soil and therefore ineligible for election.

  13. blainer says:

    This is not true. What is true is that BofA is only going to accept Ameros.

    Is this the Conspiracy Rumorist?

  14. I heard this guy, Tyler Durden, has a plan to erase all of our debt in something called Operation May….I mean, I can’t talk about it.

  15. I heard a rumor that Sergey Brin and Larry Page have been seen at the White House every day since last Wednesday. The federal government is asking Google to “disrupt” the internet temporarily in order to delay consumers and business from doing financial transactions, ostensibly to give the Treasury Department sufficient time to resolve the current crisis.

    In return Google will be given the right to process all domestic financial transactions. And to make sure that the public does not object, Brin is insisting that that no one announce the plan until 1/21/09, the day after the next President is sworn in.

  16. harleymcc says:

    3 words….

    Canadian Tire Money

    You’re welcome

  17. redkamel says:

    Im sure during all this mixup, the one thing that WONT be forgotten is how much money we all owe…

    common sense, ethics, “the right thing” are all fair game though…

    also, I am glad the solution to the banks lending money to people who can’t pay it back (but might in the future…) isn’t the government lending money to banks who can’t pay it back (but might in the future…)

  18. sleze69 says:

    What will be interesting to see if this actually causes a bank run. Personally I laugh at people that dump good stock because of silly rumors.

  19. parrotuya says:

    Rumors have a nasty habit of coming true. Rule of thumb: If it’s bad news, it will probably come true. For instance, layoff rumors always come true. Who needs credit cards anyway?

    • lpranal says:

      @parrotuya: Your statement is a perfect example of a confirmation bias – that is, you remember the rumors that come true, not the ones that were false. I had a dream come true once, and I always remember that. It doesn’t matter all the hundreds and thousands of dreams that never came true.

  20. MumblesFumbles says:

    uhmm… hello! Everyone get out their history books and turn to past economic corrections. There always is a lag with credit cards and I do believe that most banks are now bracing for a wave of credit card write-offs.

  21. wagnerism says:

    Big companies can often do stupid things. They defy logic.

    BofA is a big big company.

    Never, I repeat… NEVER speak in absolutes.

  22. BuddyGuyMontag says:

    Look. There’s an underground city at Dulce Base in New Mexico. THAT’S WHERE ALL THE MONEY IS GOING.

  23. Jon Mason says:

    Banks are not run by panicking 10 year olds (i hope). BoA is not about to close profitable accounts. They may however re-evaluate credit limits and future granting of credit.

    It’s like all these people saying “oh its going to be hard to get car loans etc.” its just people spouting junk. Yes they are going to cut back on the riskiest borrowers, but anyone with half-decent credit is going to be OK. Only anecdotal evidence, but I got a car loan last Saturday and approved no problems and thats with an average credit score and not much down…

    • MsAnthropy says:

      @masonreloaded:

      Same thing we found in May (admittedly, things are a lot different now to how they were in May, but still) when we bought our house. All we heard, from all directions, was about how impossible it was to get a mortgage, how lenders weren’t lending, how only those with the most stellar of credit and enormous down payments would even be considered, and even then, with a really bad rate.

      And here we are with our 6.1% 30 year fixed mortgage, obtained with fair-to-middling credit and a relatively small down payment. If I’d believed everything I was hearing/being told, we’d never even have tried.

      That said, of course lenders are getting more picky about who they lend to, and how much they lend – which is a good thing, up to a point. Lending to anyone and everyone, regardless of whether they have a hope of paying it back, is clearly a bad thing – actually using the kind of lending standards that should have been there in the first place is not.

      I can see why Bank of America would want to cut credit lines (not just close all the existing cards, but severely cut back people’s available credit) – they offer some of the hugest credit lines out there, totally out of whack with an individual’s annual income (of which I believe they rarely ask for proof in any case) – in the not-so-distant past, anyone with a bit of equity in their home and a HELOC had no need to run up credit card bills they couldn’t pay. Not quite the same now, and any bank that’s offering people the ability to go out and charge 50% of their salary on a credit card if they so desire, with no means of paying it back, well…

    • mac-phisto says:

      @masonreloaded: well, actually i think that thing about getting car loans is somewhat true. here’s a link to a recent story –> [money.cnn.com]

      Almost all auto dealers recently surveyed by the industry newspaper Automotive News said they were having a harder time finding loans for customers with poor credit. About 60 percent said they having more trouble getting financing even for customers with good credit. [emphasis added]

      this piece i heard on NPR today –> [www.npr.org] was quite interesting. it’s talking about how the breakdown of the commercial paper market has caused a lot of problems with businesses throughout the country. one of the interviewees is a dealership owner who says he had to partially underwrite a loan for a customer with good credit – he had to agree to pay the first $3200 lost in the event of a repo!

      sure, people can still buy houses & people can still buy cars & people can still get credit cards, but the number of people has slowed to a drip – partially due to the tightening of credit standards, partially due to us all sitting the fence until we’re a little more certain of our future, but also because there are serious issues in our financial markets that have the potential to cause extensive long-term damage to the economy as a whole.

    • theblackdog says:

      @masonreloaded: No kidding, USAA just offered me a pre-approval on a car loan for an insane amount of money, and I am not looking to buy a car yet.

  24. Jimmy M says:

    Please, god, let them close them.

    Hasn’t anyone read the store about me not being able to close my BofA credit card.

    Maybe that will make it official?

  25. BuddyGuyMontag says:

    Let me debunk this real quick.

    1) The guy can’t spell his title correctly (analysist?)

    2) He would out his building location instead of being a deep throat?

    Thanks to consumerist posting this, they are gonna be on snopes real quickly, why are we adding fuel to a silly rumor fire?

  26. OletheaEurystheus says:

    “Banks are not run by panicking 10 year olds (i hope).” No they where ran by greedy evil assholes who have ruined the entire world economy at this point while the lot of them dived out of there and are on their way to various tropical islands free of getting their piggybanks broken and free of any guilt they have at ruining millions of peoples lives.

    They only left the panicking 10 year olds to pick up their masters messes while the public tries to hang them.

  27. tedyc03 says:

    I know many of you feel concerned about the rumor. So I have a solution for those of you who are convinced the world is ending:

    1. Withdraw all your money immediately.
    2. Mail it to me for safekeeping.
    3. Wait until the economy comes back. I promise I’ll keep your money safe, just like all the big banks do.

    Er…I guess that’s not quite a selling point…

    People are ridiculous.

  28. Mary says:

    Well, I guess that would make it easier to risk the temptation of paying for something now with the credit card and planning to pay it off on pay day.

    So far I always do, but I always figured one day I wouldn’t. If they close my account, no problem ; )

  29. Nate with shorter name says:

    Bank of America lost the contract on GOVERNMENT travel credit cards to Chase. The new cards are rolling out on October 1st. This is probably where the rumor came from.

  30. hills says:

    Really? I literally just got an email minutes ago about my BofA usair card and while I was expecting it say they decreased my limit (based on the earlier story with amex) they RAISED my limit?!?!?! Today?!

  31. Trai_Dep says:

    It’d be ironic if it was a short-seller trying to spark a rumor in these crazy times so that he can short BofA stock.
    The irony, of course, is that short-selling financial stocks is furloughed for the duration.

    Sort of like a bank robber that breaks in the premises, only to find that he forgot the acetylene tanks for his torch…

  32. failurate says:

    I received a letter yesterday telling me that they had decided to close one of my accounts that had sat idle for over 12 months. This is obviously a new policy, as between my two accounts, they have been idle for years at a time (their balance transfer offers have sucked for the last two to three years).

    • failurate says:

      @failurate: And they pissed me off with the way they made their website almost impossible to use for like 6 months or so under the guise of “web security enhancements”.

  33. Then do everybody a favor and don’t report the rubbish.

    Please.

    We don’t need consumers talked into another bank run.

    • Rectilinear Propagation says:

      @Corporate-Shill: But they’re saying that it’s rubbish. Isn’t it better to have at least one web site pointing out that this is just a rumor than to have the only web sites talking about it be the ones trying to spread the panic?

      Pointing out that this is BS isn’t encouraging a bank run.

  34. wrekxx says:

    Hi guys, I work in consumer credit for BofA, in the fraud department. I can confirm that this rumor is fraudulent. I am happy to say that not only is the credit department not closing but also we are in good position to grow and prosper in this economic climate. Sorry to sound like a shill, I know this disappoints some of you as well even I like to watch a trainwreck but there isn’t one here.

  35. Davan says:

    So if they close every credit card does that mean my balance vanishes??? I know it doesnt but man that would be sweeeeet if it did.

  36. marike says:

    They closed my husband’s BoA credit card after 12 months of no use last month (ya, like we’re gonna use it after they hiked his interest rate to 131 percent on a balance that was their fault). They continue to send us those cash advance checks for it tho.

  37. Hanzo says:

    I heard that most people don’t actually need credit cards, and that in a stunning move the few megabankorporations have all agreed to axe the entire credit industry on October 1st.

    A major executive, speaking on the condition of anonymity had this to say:

    “Sure, it’s a huge revenue stream loss, but we realized that most people are incapable of responsibly handling credit. But we can’t take any more heat regarding our supposed “predatory” lending practices. Apparently, consumers feel like we’ve cheated them when we give them credit cards with ridiculous interest rates, which they then use to borrow money they have no hope of paying back even at 0% interest, and then we attempt to collect on monies owed.”

  38. ottawa_guy says:

    Same here in Canada… I just got my RBC Visa statement, with a 20% credit increase on it. No decreases on my cards, and I am revolving them just fine. Might be an extra month this month cause I bought a new TV yay!

  39. WaltonDust Mite says:

    Except that the gasoline isn’t moved through the southeast via rail… it’s delivered via the Colonial Pipleline. A massive move of bullion via rail wouldn’t disrupt this fuel delivery service, and as trains use diesel you couldn’t say that the fuel was being used to run the trains… so nice try at trying to spook people with a rumor like this.

  40. HenriettaGalung says:

    I have two cards, an BOA Amex and a Chase Freedom Visa, both which i got 4 months ago.

    Within the last month, my BOA Amex limit increased from 2500 to 7500 and my chase limit went from 500 to 5000.

    Before 4 months ago, my credit report was basically empty.

  41. seismic007 says:

    Call it coincidence, call it just plain creepy, call it whatever–BUT–yesterday I attempted to log on to my Bank of America Online account to pay my B of A credit card bill. My entire B of A online account had vanished. I was required to set myself up as a first time online use, selecting a new site key, challenge questions, the works. Once everything was reestablished my previous account information appeared (and all of it intact). Still, made me wonder exactly what might be going on.

    • Rectilinear Propagation says:

      @seismic007: Has it been a while since you’ve logged in? Someone said earlier that they spent six months upgrading the security for the web site.

  42. piratebull says:

    Bunk.. Just got a email saying they increased my credit line by $1500 wow.. Was going to cancel it anyways once I pay it off

  43. TheFuzz53 says:

    I have a BofA credit card that as from MBNA when I got it. I haven’t used it in like a year. I should probably charge something to it to make it stays active I guess.

  44. piratebull says:

    Fuzz.. Mine is too wierrrddd.. I still type in the old web address when I go to pay my bill

  45. Demonbird says:

    Well, I don’t know if this holds water or not, but I do know BOA just lowered my fathers APR by about 50%.
    It would be a shame if they canceled it.

  46. SheelaHelios says:

    I just received a letter stating that the terms of the cc had changed. It went from 6% to 14% APR. I was so mad that I closed the card on the spot.

  47. alice_bunnie says:

    It all doesn’t matter, in 2011, Skynet wipes out all of your credit… and humanity.

  48. ZukeZuke says:

    Are you guys changing your site to The Rumorist? Jeez!

  49. meefer says:

    I WISH they would cancel mine – I’ve been trying to do that for 10 months.

  50. nataku8_e30 says:

    Hrmm, it’s October 1st and my credit card is still open. Anyone else have their card not canceled?

  51. SilvesterGracchus says:

    This is NOT a bunk story. Our company had a commercial card program with Bank of America and it was canceled as of October 1st without notice to us. We paid our credit card off every month as per our agreement. On the 2nd I received an email from our Stamps.com account that they were unable to bill our month fee and when I called to find out why they told me it was canceled. After being shipped to numerous people I was told they were no longer offering a commercial card program as of Oct 1st and they did not know why we were never given notice.