All year long, credit card companies have been raising balance transfer fees, cash advance fees, interest rates…just about anything that could go up, has gone up. Despite all these changes, many credit card companies remain rightly petrified about the new credit card laws which will take full effect in February. In response to this, Bank of America was the first company to come out and announce that they will be charging annual fees. However, we’ve yet to hear from anyone who has been charged these fees and would love to hear from anyone whose Bank of America credit card now has an annual fee.
Unfortunately, Bank of America will not be the only company charging annual fees. They are just the first company to announce that they will charge fees. A decade ago, many credit card companies charged annual fees. These fees disappeared when increased competition led banks to drop fees and offer long term 0% APR offers. However, as credit card companies seek out ways to profit from lending after the new laws take effect, the annual fee may become increasingly common, and credit card offers without annual fees will likely come with higher interest rates and no rewards programs.
Credit card companies have already started charging higher interest rates to all types of consumers, including those with excellent credit. In fact, current interest rates are around the same level they were two years ago when the Prime Rate was 4 percentage points higher. Ultimately, these higher interest rates, along with annual fees and trimmed down rewards programs are likely to become commonplace in the coming months.
The question is thus not whether annual fees will be common, but when they will become common and how high will they go. A $29 annual fee is reasonable; a $99 annual fee is not. Of course, if those annual fees are combined with lower interest rates, it may be worthwhile to pay one. However, if interest rates and annual fees continue to climb, the people banks want to have as customers will turn their backs and use cash or debit cards.
Hopefully, the backlash against Bank of America credit cards with annual fees will lead other companies to abandon the idea. Unfortunately, many people who carry credit card debt and can’t get a balance transfer credit card are likely to have no option but to pay up.
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November 23rd, 2009 at 2:06 pm
Back in Oct/2009 I recieved an offer from Bank America of 0% for 1 yr. on Balance transfers.
I closely read the whole offer, there was a 3% tranfer fee, but since a current 1 yr.0% card with a 9,600 balance,ran out in 2 months, I called Bank America and excepted the offer as written!
Later that month they transfered $9,600 to my other card,I closed the account and opened my account with Bank America for the transfer at 0% interest for 1 yr.
I didn’t get my 1st statement till Nov.
On it I found;
1st the 3% balance transfer fee of $288 I had to pay was under cash advance.
2nd. I was being charged a 35.9% Cash Advance finance charge on the $288.00 transfer fee I had to pay them for my transfer.
Since I received no cash or money whatsoever and the 3% balance transfer fee was never stated, as being a cash advance in their offer, I assumed it was a mistake and called them.
Guess what, it’s not disclosed and it’s not a mistake!
You’ll not only pay Bank America a 3% tranfer fee, you’ll pay cash advance finance charges against that fee for as long as you owe a balance!
I 1st talked about this dispute with a bank Rep. she, had me fax the offer to her and said she could not find where a balance transfer fee was treated as a cash advance mentioned in the offer, then referred my dispute to someone higher up and they declared, I knew about it!
He said it was mentioned in the exceptionally long, fast read card violation, fees agreement and information by the rep. that took my application!
Then said if I pay off the balance transfer by the 31st of Nov. He will refund my transfer fee and the finance charges!
I told him I’ll not only do that, but I’ll make sure they no longer have my new car loan as well!
Today my Bank America Sep/09 5 yr. 6.9% new car loan, was replaced with a 3 yr. 3.5% loan with USA Bank!
I’m paying in full the balance transfer with my current chase 0% card company and guess what?
I’m paying no transfer fee on it, but since I’m using a convenience check I’ll pay a 1 time fee of 1%!
Fellow business owners, never do business with Bank America!
They are not honest and consider the 3% Balance transfer fee they charge you, as cash they advanced to you!
Chase and other banks I contacted about their transfer fee policy, including USA bank, consider the fee for what it is, a fee you pay to transfer a balance, that is added to that balance and charged at 0% for 1 year, as agreed!
Bank America, uses this fee to make 35.9% interest on it till you pay off the balance you transfered!
Never accept any written offer they send to you, as Truth, in Lending.
Never do business with a bank that does not honor their written agreements.
Tara Flynn
C.E.O E
December 12th, 2009 at 10:27 pm
I have recieved my notice from BANK OF MAFIA, that i will be paying the 99$ annual fee. Ive made a few bad mistakes in my life and ever getting a credit card was the biggest.
its funny if you have a credit card and use it, it goes against your credit score and if ya have one and dont it has the same affect.
the credit card companies could care less that our country is in a recession , many ppl cant afford higher rates, annual fees. many have lost there jobs, my job was moved to another state. Im struggling to make the minimum payment BUT im making on time every time, yet that is partly why im paying a maximim annual fee.
OUr government should put caps on rate hikes and interest they can charge.
I pay 168 a month and only 43 dollars go to the principal. THAT should be illegal! yes when i got the card and used it i read the fine print but i did not decide to move my job out of state, I did take a much lower paying job and i havent stopped payment yet! the mafia was called corrupt, many put in prison for loan sharking, you tell me the differance between what they did to collect and what the card companies are doing.
people do without there needs to keep the greedy bastards in their lavish lifestyles. biggest mistake i ever made.