Despite significant increases in credit card interest rates and fees during 2009, Bank of America reported today that credit cards continue to be a significant source of losses for the bank.  During the bank’s fourth quarter, its card services department posted a loss of $1 billion dollars as credit card write-offs remained elevated.  Of the largest six credit card issuers in the country, Bank of America currently has the highest write-off percentage.  Continue Reading »

My wife got an unusual offer from Bank of America in the mail yesterday for a WorldPoints Platinum Plus MasterCard.  Instead of a typical 0% balance transfer offer, this credit card offered a 0% APR or a 2.99% APR on balance transfers, depending on a review of her credit.  The offer, which came with a 4% balance transfer fee, would not be bad if it were for a 0% balance transfer.  Unfortunately, she would not know if her balance transfer interest rate was 0% or 2.99% until after she applied.

Given the 4% balance transfer fee, this was either a decent offer or a relatively poor one.  If she were to get the 2.99% balance transfer rate, she would effectively be charge 6.99% for the balance transfer.  Other companies that offer 0% rates for a year and charge 5% fees are clearly a better deal, as this would save her about $100 on a $5,000 balance transfer. Continue Reading »

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. Continue Reading »

Ever since the Credit Card Act of 2009 hit the floor of the House of Representatives, credit card companies have been scrambling to rework their business models.  The result:  millions of consumers are paying higher interest rates, credit limits have been slashed, and millions of people are being denied for new credit.  These new “consumer friendly” credit card laws have led to increased fees for credit card transactions ranging from international purchases to balance transfers.  And 0% introductory rates, particularly 0% balance transfer offers, have been reduced dramatically.

Now, thanks to the meddling hand of Uncle Sam, annual fees will soon be added to the lists of new costs levied on American consumers.   According to Forbes, Bank of America will soon be charging annual fees on some credit card accounts. Continue Reading »

According the Wall Street Journal, Bank of America has sent a letter to the Chairman of the House Financial Services Committee vowing to cease rate and fee increases until new credit card laws take effect in February.  This moratorium comes after Bank of America embarked on a nearly year long spree of rate and fee raising.  However, Bank of America has not acted alone.  Nearly every major credit card company has been engaging in these practices which include seemingly arbitrary rate increases, credit limit cuts, and increases on fees for balance transfers, cash advances, and international transactions. Continue Reading »

When a credit card company offers you an interest rate opt out, it is often better to opt out then endure the new rates, especially if you have a large balance.  Consumers with smaller balances that can be paid off may benefit from keeping the card open and paying it full each month as a means to keep their credit score from being damaged.  However, if you have a substantial balance, by all means opt out of rate increases.

During the past year, I’ve heard from hundreds of consumers who weren’t sure what to do.  However, a comment posted today reminded me just how important it is to opt out of rate increases if you carry a balance that you cannot quickly repay.  Here is a horror story posted by Gale:

“I have a Bank of America card. I have payed my payments on time and have never gone over my limit. My apr was 7.9% for years. They just recently they decided to raise my apr to 23.9% it has doubled my payments. Continue Reading »

Effective today, Bank of America has raised balance transfer fees to 4% from a previous level of 3%.  While this move was announced over a month ago, the very fact that one of the country’s biggest issuers of credit cards has taken this step could spell trouble for the future of balance transfer fees.

During the past half decade, credit card companies were engaged in a battle to win new customers.  This was great for consumers, who were offered long term 0% interest rates and often charged little to no balance transfer fees.  As the credit crunch intensified last summer, companies began eliminating no fee balance transfer deals.  By fall, companies began to remove the limit on balance transfer fees.  Prior to the fall, most companies charged a maximum fee of $75 per transaction.  Anyone transferring less than $2,500 paid 3%, while those transferring more simply paid $75.  Continue Reading »