According to today’s Wall Street Journal, Bank of America will be raising interest rates on EVERY consumer who carries a balance and has an interest rate below 10% on June 1st. (Source) This is a truly startling development, and yet another signal that major banks are doing everything they can to increase the profitability of accounts held by responsible consumers with good credit.
Earlier this week, a visitor reported that Chase will also be raising interest rates across the board, although our research has yielded mixed responses on the subject. (See Is Chase Raising Credit Card Rates on Everyone? for more details)
While its hard to predict if other companies will follow Bank of America’s lead, we’ve been concerned for quite some time that measures like these will be taken. When credit flowed freely, credit card companies constantly competed to offer consumers the best deals. Now that a credit crisis is here, the exact opposite appears to be happening, as credit card companies seem to be fighting over who can offer consumers the worst deal.
While Bank of America cardholders that are in danger of rate increases have two months to reduce their balances, everyone that carries a balance on their credit cards needs to focus on paying down their balances as quickly as possible or locking in a 0% interest rate on balance transfers while they still can.
For information on credit cards that still offer 0% balance transfers, please see the balance transfer credit card section of this website where you can compare deals and apply online.
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