Bank Of America To Start Charging 30% On Credit Cards

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Starting June 25 of this year, Bank of America will start charging more and more of their credit card customers an APR of almost 30%.  According to a letter that came in the mail today, that new rate would apply "indefinitely."  If you make a single late payment, B of A may raise your interest rate to as much as 29.99%.  The new rate would only apply to new purchases, not existing balances (that's one of the few good things about the CARD act), but according to recent surveys over 15% of customers have made at least one late payment in the last 12 months.  (I know we've done it once or twice.)

From a free market perspective, the new late payment policy isn't terrible, but in practice it still stinks.  That's because, like most fees and penalties charged by banks and credit card companies, it will be more onerous for the poorest and most vulnerable.  Think about it, if you have good credit and a good job, who cares if you make a late payment?  If your credit card company assesses a penalty rate of 30% on new purchases, you can just switch to a different card.  But if your Bank of America card is your only source of revolving credit, then you're pretty much stuck with the new interest rate.  And over time, more and more customers will end up with the new penalty rate because of a late payment.  Moreover, it will end up being those customers who can least afford it who end up paying the new rate because B of A will most likely refrain from instituting high penalty rates on customers they know can simply walk away.

In other news, the Federal Reserve plans to keep short-term interest rates near zero, so you can expect to receive a "penalty rate" on your savings -- indefinitely.

Comments

[DailyBail]

The insolvent rape the weak...thanks dr. p....

[Joe M.]

"In other news, the Federal Reserve plans to keep short-term interest rates near zero, so you can expect to receive a "penalty rate" on your savings -- indefinitely."

People need to wake up to the fact that a fiat currency is constantly being devalued over time and are now, effectively, gettng a negative savings rate. Buy Gold and Silver to overcome this problem as it is valued at the inverse of a failing fiat currency.

[Brad]

And, US Bank just started charging monthly fees on checking....even to customers that have hundreds of thousands of dollars in other accounts.....if you don't have $ 1500 monthly balance, that particular account gets dinged......

[Wil Martindale]

And of course in the fine print of the separate "important information" letter you toss as junk mail, you might miss where the new due date is a week earlier, but the bill concidentally being sent out a week later (or not at all) is just an honest mistake.

Never better a Con against his own game.

[Morgan]

I am 48, and NEVER had a credit card in my life. Last time I was in debt was for 2,500 student loan when I was 19. I paid it off early, and paid $18.00 in interest. What's everyone else's excuse for flushing so much money down the loo?

[Harry Johnson]

Why can we not charge Bank of America 30 percent on the money we have loaned them which they have used to overcompensate their executives?

[paul krugman's raging ulcer]

BofA jacked my Visa card interest rate to 29.99%, so I immediately closed the card and paid it off as quickly as possible. Problem solved, never again. I hope all of the people BofA screws remember forever that they did it.

[Bob Richards]

You're missing something. If you pay ontime for six months, they have to lower the interest rate back down. Finally, they can't raise the rate on existing balances. That's a huge saving right there. So don't charge anything for six months, and just make payements. That way the interest won't effect you....but it will them. They get merchant fees from your use of the card.

[S. Gompers]

So this is how America gets rewarded for being forced investors in the extorted bailout of the banks. With friends like bankers, who needs to worry about terrorists...

I was hoping for a dividend check, LOL.

[Dr. Pitchfork]

"You're missing something. If you pay ontime for six months, they have to lower the interest rate back down. "

Nope. Didn't miss anything. The bank will "review" your account every six months if you pay on time. There is NO obligation to reduce the rate back to the status quo ante. My BofA contract right here in my hand makes it clear that the penalty rate applies "indefinitely."

Also, we mentioned the existing balances bit. That's one of the new regulations.

[Piggybankblog]

When I think of Brian Moynihan or Barabra Desoer, I think of the song by John Lennon called Piggies:
So if it walks like a piggy, talks like a piggy, by golly it’s a PIGGY!
.

WHERE IS MY LOAN MODIFICATION BANK OF DESTROYING AMERICA!
.
BofA and it’s CEO Brian Moynihan reminds me of that song by John Lennon and George Harrison titled "Piggies" I invite you to listen to this song on youtube and see if it appropriately fits.
.
http://www.youtube.com/watch?v=ovD9rTzs2q4&feature=player_embedded
.
Have you seen the little piggies
Crawling in the dirt
And for all the little piggies
Life is getting worse
Always having dirt to play around in.
.
Have you seen the bigger piggies
In their starched white shirts
You will find the bigger piggies
Stirring up the dirt
Always have clean shirts to play around in.
.
In their ties with all their backing
They don't care what goes on around
In their eyes there's something lacking
What they need's a damn good whacking.
.
Everywhere there's lots of piggies
Living piggy lives
You can see them out for dinner
With their piggy wives
Clutching forks and knives to eat their bacon.
.

When I filed my lawsuit against Bank of America, I thought of the many others out there in the same situation. It was then that we decided to educate the public on what these piggy banks are doing, as well as unite us all together as one voice. Please help me turn this David vs. Goliath modification process, into a Goliath vs. Goliath.
.
Please stand with me and Brookstone Law Firm, and send an email to Bank of Abusing America that states that we will no longer tolerate their potentially illegal, fraudulent, irregular and abusive business methods.
.
So please send your email directly to Bank of America and include the following:
.
1. Your name
2. Your complaint concerning your experience with Bank of America.
3. Please end your email “I support John Wright vs. BofA Lawsuit!”
4. Please send a copy of your email to piggybankblog@earthlink.net
5. Please send your email to BofA CEO Brian Moynihan:
brian.t.moynihan@bankofamerica.com
.
I HAVE HAD ENOUGH AND I AM FIGHTING BACK!
.
I have created piggybankblog.com for all of those who have been abused by Bank of Destroying Americas potentially irregular, fraudulent and simply abusive home loan modification process.
.
Divided we might have fell America. UNITED WE MUST STAND!
.
http://www.youtube.com/watch?v=PoOJMr7OJ0s
.
My name is John Wright AND I AM FIGHTING BACK!
.
John Wright
piggybankblog.com

[Bull]

Are you serous? Don't you see the B of A move for what it is, financial rape! When you are being raped, you can let it happen or you can fight and you do NOT have pty on your attacker. We need to OPR OUT of the credit card game which we are losing so badly. When we go back to living within our means, we don;t need no stinkin credit cards! If they raised my rate to 30%, I would tell them to go fuck themselves and would not send them another dime! Hurt my credt? Collateral damage, we are at war!

[beel]

I had an instance with Sears. A store allowed my ex-wife to use the NUMBER, not the card, to charge some items. After it was finally resolved, I asked them to lower my interest rate to which they replied, 'Everyone has the same rate.' I told them that if this how they treat their customers then cancel the card. The end.

[Canuck]

Of course it will hit the poorest and most vulnerable the hardest. Poverty is a commodity. The banks don't make the most off the ones who pay the balance every month (aka deadbeat), they make the most off the ones who max out their cards and pay minimum. The more they can force into that state the more they make.

I don't have a credit card and get very annoyed when the banks won't accept 'No thank you' when they try to push one on me.

[robertsgt40]

Reminds me of a cartoon I once saw. A mouse had his head caught in a mouse trape and a buddy came up behind him and boinked him from behind. Why stop at 29.99%? Does 30% appear to be usurous?