Bank of America Angers More Customers With Unjustified Rate Hikes

More about Bank of America’s inexplicable rate hikes against good customers who never pay late: the Charlotte Observer talks to some recent recipients of BoA’s infamous rate-increase letters from the past few weeks. The first person they talk to is a 60-year-old woman who “had never been late on a credit card payment, just refinanced her home at a lower interest rate, and just been rewarded by her credit union with a lower rate on her credit card there.” Bank of America just raised her card from 13% to 24.99%.

Here’s another customer’s bizarre encounter with the bank’s customer service department when she called to ask why her rate was raised:

Holley Pridmore of San Antonio said she’s had a Bank of America credit card since 2002 and has never been late on a payment. But the bank recently increased her rate from 15.24 percent to 23.99 percent.

Pridmore, 49, pulled her credit history and called the bank. “If you can find a late payment in our entire history, I’ll pay you $100,” she told the customer service representative. “He said, `That’s not really the point,’ and I said, `Since when?'”

Here’s how to avoid the rate hike if you’re one of BoA’s unfortunate customers and missed this in their letter to you:

In letters, which were seen by or described to the Observer, Bank of America told customers that they could lock in their current rates if they sent the bank that request in writing and agreed to not use the card any more but to simply pay down the balance. If they wanted to keep using the card, they’d have to agree to the higher rates.

(Thanks to Stephen!)

“BofA rate hikes anger customers” [Charlotte Observer]

“Why Is Bank Of America Raising Interest Rates On Its Good Customers?”
(BoA executive eating gold: Getty)


Edit Your Comment

  1. megan9039 says:

    Seems like BoA is taking lessons from Exxon??

    • Anonymous says:


      Interesting, I had an Exxon (or Mobil) card, and they started being jerks which either led me or them to close the account; do you think they are doing this to lose the risk? I am also a BofA credit card holder (and have bank accounts with them) and am now considering closing and going to TD. Do you think BofA is trying to lose its credit card customers?

  2. bohemian says:

    Anyone still running those 0% introductory rate offers? Sounds like a good time for people to run screaming from BOA.

  3. Chairman-Meow says:

    @megan9039: More like enron than exxon.

    Actually, up here in the Northeast, Fleet Bank used to pull the same stunt with all their fees. Ironically, that were bought and merged into the BOA family.

  4. sirwired says:

    Hey, I have no problem with this. As long as the letters are not buried in 2-pt type at the bottom of the statement, or mixed in with 15 advertising circulars, then they are free to charge whatever they want on future balances.

    Clearly, they are just trying to drop customers that are not profitable, and this was their way of doing it.

    Personally, I think it’s a bit ham-handed… and I expect they are hoping some customers won’t notice, but as long as they aren’t being subtle about it, I don’t see how this is a “rip-off”


  5. warf0x0r says:

    That’s a good picture. It accurately portrays this scenario.

    @sirwired: While I would agree it seems that competition in the lending market is moving toward what I like to refer to as the Cable model. Everyone gets low introductory rates without so much as a second thought from lenders, but when those rates expire established reliable customers who are a reliable source of income (in most cases) are now subject to rates much higher than newer customers, and no matter how long someone is a customer they’re always forced to pay higher rates.

    How exactly is that okay? You should always treat your longest running customers as your most valued. It will take more resources to bring them back if they were to leave, and their word of mouth is worth more than any newer customer.

    I think simple math should prove why this is bad, take the case above…

    15.24% of x = x(.1524)

    23.99% of 0 = 0

  6. OK, so if I read correctly, and someone tell me if I didn’t:

    If you have no late payments, you can lock your rate in if you send a letter, and promise to pay off the debt which you don’t have.

    I don’t understand. Is Don on the phone?

  7. dreamsneverend says:

    The consumer will decide the fate of banks like this, however time and time again we have proven to be complacent as a group. BOA will roll back the increases on those who notice and reap the profits of the ones who don’t care enough to take their business elsewhere.

  8. chagasi says:

    Re: GIT EM. Not having late payments isn’t the same as not having a revolving balance (debt)Good standing is merely making the minimun payment each month, regardless of new purchases or past debt.

  9. 854R says:

    The same thing happened to me, but with Washington Mutual. I have never missed a payment and have always payed at least double the minimum payment on all of my credit cards. They raised my APR from 16.99% to 26.99%, but agreed to lower the rate back to 16.99% if I agreed to basically cancel the card and not use it anymore. It’s sort of rediculous that these companies are trying to slap good customers with the bill for their corporate losses.

  10. chemmy says:

    I’ve been with them only because Providian sold my account to them. Never had a late payment ever. Always pay at least double the minimum payment. My interest went from 10.99% with Providian to 14.99% with BOA. Then suddenly my bill seemed off and I noticed they were charging me 29.99% interest!!!!! I called customer service thinking it was a mistake and they were pretty rude with me and told me that they could do whatever they wanted to and since I owed them money, I had no choice but to go along with it. Ah well…. what can I do. One of these days, will call and try again. But it will be paid off in the next few months so oh well. Live & learn.

  11. ironchef says:

    that’s why I never carry a balance.

  12. Okaasan says:

    @Git Em SteveDave: All of the stories I’ve read indicate that you have to promise to pay off the debt that you _do_ have in order to stay at the lower rate. And you cannot use the card anymore, basically closing the account. At least that’s what BoA told us and we opted not to use the card anymore. I have not read anything about raising rates on $0 balance accounts, though. Anyone heard any differently?

  13. Okaasan says:

    @Okaasan: Oh, and I’d like to wish BoA a pleasant and extended journey to the deepest level of Hell. Have a nice day! :-)

  14. Saboth says:

    Wachovia did this to me a few years ago. I’d had a card with them since college, and had always kept a decent balance on it, never made any late payments, and used the card frequently. I looked at my bill one day and had noticed my interest rate had gone up to about 21%. I called, and they said something about my debt to income ratio seemed high (beats me..I had perfect credit, no late payments, and was not in any extraordinary debt). I said I was going to cancel, and suddenly lower rates were available, airline tickets, etc. Too late. To this day, I still get offers from them like “limited time offer to get your Wachovia Card again!” Well…take your offer and shove it.

  15. mthrndr says:

    I just transferred my BOA balance to a 0% for 15 month (8.99% fixed after that) Chase account. No transfer fee either. I still get BOA balance transfer offers for 9.99% fixed (with 3% fee). Yeah, fuck that. I transferred a student loan to another Chase account with 3.99% fixed. My loan APR is 8.5%, so it made sense.

  16. oldtaku says:

    On the positive side, BoA jacking my credit card rate to 28% when my credit is /stellar/ was the last straw I needed to cut off my final link to them. Now it’s all my local credit union and USAA, win win.

  17. @ironchef: And sanctimonious. Don’t forget sanctimonious.

  18. XianZomby says:

    BOA just rewarded me for being a good customer! They raised my credit limit by like $5,000. But they didn’t reward my good customer behavior by lowering my APR from 24 percent to 10 percent.

    So Friday, after reading this Consumerist [] article, I applied for and received — instantly — a credit card from USAA. My insurance is there anyway. I also opened a savings account and checking account there. I’m going to transfer all my banking to USAA.

    It won’t be but a few more days before I receive my USAA credit card. Then I will go online and transfer my $400 dollar balance to a card with a lower rate, and then cancel my BOA account.

    Thanks Consumerist.

  19. ? graffiksguru says:

    I got worried when I saw all these posts saying BoA is jacking up the APR for people with good credit and no late payments, so I called and double checked today, and mine is still fixed at 6.9%. If they did jack it up, I was going to switch to BECU (worth looking into if your a washington resident, fixed at 6.9, no annual fee)

  20. jaredharley says:

    We got one of these letters, and it was actually EXTREMELY clear exactly what we needed to do to prevent them from hiking the rates – hell, the list of steps was even numbered!

    The whole of it is – you have to write a letter with your name and account number, and specifically state you do not accept the rate hike. You send it to a specific P.O. Box that is only being used for the “amendment rejections”. Then, in my case, as of February 29, 2008, we can no longer use our BoA credit card if we want to stay locked in to our old rate. The second we use it after the end of Feb., we “agree” to the new terms and the rate goes up. Otherwise, we continue to pay off the balance at our old, lower rate.

    Yes, it was irritating, but well within BoA’s rights – they basically requested to change the terms of the agreement, and if you said no, they say “Okay, just pay off your account and go away then.”

  21. Mr. Gunn says:

    jaredharley: “Okay, just pay off your account and go away then.”

    and that’s exactly what people should do, instead of complaining about it.

  22. Neurotic1 says:

    Or better yet, just transfer everything over to another card and don’t use anything with the BofA logo on it.

  23. Ryan Duff says:

    The problem with this is that it can affect your credit score. If you do carry a balance, this screws you because often times you’ll find a card with a low intro balance and transfer everything here. If you close the old card, you get stuck with a bunch of short times vs established credit on your credit report which in turn, dings your score.

  24. xQuizx says:

    If it makes you guys feel any better, BofA sent me an offer for a cash advance for a fee of 4% maximum $90 at 0% APR for a year. So I took a rather large cash advance and am socking it away into a high yield interest account. I made sure that my credit to debt ratio on that card wouldn’t affect my credit score too much. That’ll learn them good for screwing with my consumerist brother’s and sister’s!!!

  25. Murph1908 says:

    I have a BoA credit card for several years. Only 1 or 2 months in this time have I not paid it off completely (honeymoon, laptop). Both of those were over 2 years ago.

    They have not upped my rate. Even though it really wouldn’t matter to me, since I don’t pay finance charges on it anyway, I’d still stop using it. I have almost done so already, since I now have a Chase card with better rewards. The only time I use it now is when I don’t want to search for my wallet when making an online purchase (I have the # memorized).

  26. She Laughs says:

    @jaredharley: I guess I was smart a few months back and closed the account. There’s a first. But it also explains why the woman on the other end was so non-reactive (offering a lower APR, et al) when I said I wanted it done.

    Discover, on the other hand, was ready to leap through flaming hoops.

  27. WhirlyBird says:

    @sirwired: Not future balances, *current* balances (I just got my BoA letter this week.)

  28. Radoman says:

    One o my cards was involuntarily switched to B of A. Now I cringe every time I open the mailbox looking for an “increase” letter. I think I’ll just cancel it despite the hit it will give my credit report.

    Gotta love that. Company gives you bad service? Cancel the card and decrease your credit score. What a scam. Kinda like bad Ebay feedback for nothin. (Fico scores are partially based on length of account history. Hence, close a bad account, lose a few points of FICO score)

    How could demanding good service be a bad financial decision?

  29. bostonguy says:

    I don’t know what the hubbub is about the whole “closing the account” thing. I thought it was just standard practice (if not some kind of law) that you could reject the rate increase, close the account, and pay off your balance at the previous rate. (If you declined the new rate, and they started charging the new rate, they would in effect be enforcing the terms of a contract that you had opted out of, right?)

  30. NoWin says:

    @rainmkr: I fear you are very, very correct in that.

  31. camille_javal says:

    @XianZomby: whereas, I recently noticed that USAA dropped my APR from Prime + 1% to Prime – and, their rewards program is better than my other credit card (e.g., USAA requires 3000 pts for a $25 Amazon gift card, versus $5000 for the other card).

    I don’t carry a balance, but if I’m forced to make a large purchase that can’t wait in the future, I know which card I’ll use.

  32. vastrightwing says:

    I have a warm fuzzy feeling now that BOA is angering all of its customers. I hate them with a passion and now everyone else can’t seem to leave them fast enough. It just makes me feel nice. Yes BOA, you treated me very badly, and I left. I’ve been busy telling everyone I discover who is a BOA customer to leave and I give them reasons why. Now, you’re doing a great job getting your customers to flee without my help. Great business plan!

    Nothing made me feel like doing business with you than my credit card interest rate jumping to 31%, high account fees, overdraft fees and a host of other mysterious fees. Lest I forget the fee you charged me when you deposited $20K of my money into a closed account. Yes, great times, it was a long time ago. Then when I left, you punished me with $3 ATM fees. Ok, Ok, so now I won’t use your greedy ATMs either.

  33. mac-phisto says:

    @bostonguy: the hubub centers around the negative impact of closing the account. if it’s a recent account, the impact will only be marginal, but if it’s one of your older accounts, your score will drop.

    & then there’s the problem of getting them to help you once the account is closed. for the life of me, i couldn’t get discover to send me a bill when i requested to close the account. you’d think they didn’t want to be paid!

  34. gnubian says:

    Mine’s still @ 10.99%

  35. sirwired says:

    @WhirlyBird: Yes, but you have the option to freeze the rate and pay off what you have already charged.


  36. sirwired says:

    @warf0x0r: Well, I never said this was a very smart way to try and raise more money, just not a “rip-off”.


  37. cccdude says:

    Credit card companies are ass-wipes working every angle to get every dollar they can using every little trick they can conceive of.

    They also play games with the statement End & Due Dates. Even though I pay off my card every month (which they hate), my Chase card Due Date is almost ALWAYS on a Sunday (non-business day) so that I’m forced to get them the money 2 days earlier.

    GOD I hate them.

  38. Techguy1138 says:

    The credit companies are in trouble plain and simple. They are trying to up profits in people that carry a balance.

    You can either opt to pay a higher interest rate
    Close your account and pay it off, most likely much faster then you normally would have. With a balance transfer to another card that would be almost instantly.

    They wind up with a lot more $$ in the “vault” and less unsecured liability on their books. This frees up from 2-10x as much credit for future lending.

    If they could push their mortgage customers off on to other banks I’m sure they would be doing that also.

  39. Kendra says:

    Funny, two years ago when I asked the bank in person about
    their rates, they quoted the 18% as an introductory rate, after 8 mos
    they stated that they would raise it then to the “industry standard”

    You just didn’t ask. You weren’t duped.

  40. kingpin96 says:

    It’s happening to me too. Taking me from a 7.9% to 24%. The MBNA(BOA) credit anylyst stated on the phone that Experian (their credit source)had an unvaforable rating on me. I pulled my credit score & I have a middle score of 750. No blemishes no late payments. This is starting to sound like fraud. I guess they can change whatever they want when they want according to their initial agreement but this ammendment stunt is lame. I will take every dime out of every account with BOA and go back to the small town bank platform. I know they have to pay for that countrywide buyout mistake somehow but don’t take it out on your good customers. That’s right, they don’t make any money on their good customers, just the dirtbags. I hope that BOA bleeds to death.

  41. theblackdog says:

    These articles definitely have me worried, but currently my Compass Bank account is sitting at 11.99%, but it is variable so it could go to hell on me later on.

    I would go with USAA right now, but currently their pre-approved offer is only at 11.24%…if I qualify for it. I will see if they change the offer to something more favorable, or just transfer the balance when I get closer to paying off my current card balance.

  42. sue_me says:

    Frankly, I don’t give a flying **** what BoA does with my credit card. I cut the thing up when it angered me with its crappy intro rate and credit limit. Discover has a crappy rate and credit limit too, but at least Discover knows to bribe me with those 5% cash back offers on restaurants (I eat out a good amount, I’m living in a college dorm and can’t cook). What does it matter if they raise my limit, raise my rates, whatever? Whatever changes they make, they’ll spend money doing it. And they get to spend money maintaining my credit card, my online banking security stuff, and online records, while I, on the other hand, have happily moved on to American Express and Discover. So up your rates, BoA. I don’t even have the card in my possession, and I just closed my checking account and cut up my debit card a week ago. Best feeling of my life. Perhaps better than when I got into my first choice college in december 06.

  43. blopreste says:

    not only do they increase rates, because they can’t manage the money they do have (woe be to the consumer who can’t do that), but they have also started suspending customers lines of credit for no reason other than market conditions. I know that my mortgage company does not care if my house devalues as long as they get paid (which they do) and i know BOA has been taking its share every month from my checking account. I think its about time federal regulators came in and did a little shake up of this gentlemen’s club.

  44. rsherard3 says:

    I’ve been dealing with Bank of America for far too long. I got a fairly good deal through MBNA a few years ago to consolidate my debt. The starting interest rate was 16.74%. Again, not too great, but considering I had all of my debt under one manageable account, it was a good deal for me. That was until BoA bought MBNA and the heartache began. My interest rate went from 16.74% with MBNA to 24.99% in less than a year after BoA bought them. I have never missed a payment, ALWAYS pay well more than the minimum, and have what I would consider a pretty good credit rating. I wrote a letter to the OCC pleading my case. I also sent the same letter and package (all of my statements to back up my case) to BoA with a letter specifically for BoA. The response I received from both was less than acceptable. No explaination from BoA on the over inflation of interest to my account other than the Prime going up about 2%. I’m sorry, but 2% is a far cry from 8.25% on an account with good standing. I will NEVER bank with them again.

  45. Anonymous says:

    What if the consumers band together and just refuse to make any more payments on credit cards that charge unfair ridiculous rates. At what point is is better to have bad credit as opposed to being ripped off and laughed at ?