Tuesday, February 12, 2008

What the $&^% is in the Water Cooler at Bank of America?

Okay – these guys are nuts. If you have a Bank of America credit card, you might have been unlucky enough to recently receive a mailing that tells you they’re about to raise your interest rate by an exorbitant amount (some cases more than double!)

First off, they’re a FORMER business partner of mine, and I think I can say they’re nuts especially since my identity remains rather anonymous. I could tell you stories, but I won’t. Instead, I’ll tell you if you got one of these mailings, don’t worry – it’s not because of anything you did or didn’t do (like not pay a bill). It's based on some secretive level of targeting that no one outside of the corporate walls understands.

They did this ballsy move because they told you they could, and you gave them your permission by way of accepting the terms and conditions that you unknowingly agreed to when you decided not to read your terms and conditions. The language you missed went something like this:

As required by law, rates, fees, and other costs of this credit card offer are disclosed here. All account terms are governed by the Credit Card Agreement. Account and Agreement terms are not guaranteed for any period of time; all terms, including the APRs and fees, may change in accordance with the Agreement and applicable law. We may change them based on information in your credit report, market conditions, business strategies, or for any reason.

This paragraph can be found at the very top of the terms and conditions, in itsy-bitsy type right above the interest rate section. The first part that bothers me is the part that says terms are not guaranteed for any period of time. But also note the last sentence, “We may change them (i.e APRs) based on information in your credit report, market conditions, business strategies, or for any reason“. Does anyone else find the last four words as haunting as I do? or for ANY reason? I can imagine the conference room at Bank of America now…

Well, the kids have been hitting the lollipops a little too hard at our branches and it’s been hurting our bottom line. Jack, what do you think we should do about it?” “Well, Jim, why don’t we just double all of our cardholders interest rates? That should just about cover it!”

In all seriousness, there’s a lot of speculation about why they pulled such a stunt – they’ve got to level out their reserves after the sub-prime mess, they’re fattening up for their purchase of Countrywide, they’re trying to dump their dead-weight cardholders they inherited when they purchased MBNA (Mothers Brothers Newphews Aunts – a story for another day).

Whatever the reason, Bank of America is not only going to lose a lot of credibility in the marketplace. They’re likely to lose their shirts too when consumers catch on and plan a mass exodus when some other card company positions themselves as the savior by coming out with some offer that implies “Did Bank of America take advantage of you like a cheap whore at a bachelor party? How dare they. We’ll never do that to you. Sign on the dotted line and we’ll guarantee your low fixed rate for life”.

If you’re a victim of Bank of America’s seedy practices, I encourage you to visit our friends at Indexcreditcards.com where you can choose between 1,217 different cards to suit your needs. Choose carefully though – 26 are listed as Bank of America cards, and there’s a bunch more that are former MBNA cards. The good news is, there’s plenty more than one fish in the Cardfish sea. Finding what you need is like, well, shooting fish in a barrel.


1 comment:

gridmaster said...

Yet another good reason to always read the fine print, and always keep your credit score clean, so you can shop your business when the bank pulls this type of nonsense on you.

Check out the continued venting of spleen on this at The Consumerist: