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 »

As we reported earlier, Bank of America is increasing a number of credit card fees, including balance transfer fees, to 4%.  While news of the impending balance transfer fee increase was made public a few weeks ago, I received a letter from Bank of America outlining other, substantial fee increases relating to a wide range of transactions.

First on the list are ATM cash advance fees, check cash advance fees (yet another reason to put balance transfer checks in the shredder), direct deposit cash advances, and wire transfer purchases. Continue Reading »

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) Continue Reading »

Editor’s Note:  This article was originally posted in April of 2009.  Since that time, many credit card companies have increased balance transfer fees to as much as 5%, depending on the offer.

According to a recent report from Bloomberg, Bank of America intends to raise balance transfer fees from the industry standard 3% to 4%, a new high for this growing source of fee revenue for banks.  This 30% increase in balance transfer fees, scheduled to take effect on June 1st, marks a continuation of a disturbing trend that has dramatically increased the cost of balance transfers over the past 15 months.

The Rise of Balance Transfer Fees During the Credit Crunch

At this time last year, Bank of America offered no fee balance transfers tied to credit cards with 0% introductory rates that lasted 6 months.  In late 2008, Bank of America increased these fees across nearly every card, to a flat 3% fee with no maximum. Continue Reading »

According to a BusinessWeek article released today, Bank of America has dramatically raised interest rates on a number of cardholders. In the article, a number of consumers with solid credit histories and a record of consistent payments reported that their interest rates have nearly doubled, with many cardholders being slapped with rates as high as 28%.

Consumers hit with an interest rate hike by Bank of America were offered the opportunity to lock in their current rates if they opted to no longer use their cards. However, finding out if you’re rate will be increased and preventing this from occurring has not been made particularly easy, as Bank of America sent notices without reply envelopes and offer no way to lock in current rates via phone or online.

If you hold a Bank of America credit card with a balance, be sure to call and make sure your interest rate has not been increased. Since Bank of America sent notices through the mail, there’s always a chance you may have tossed the envelope in the garbage with the rest of you junk mail. Better to be safe than sorry in this situation, especially given the massive interest expense a 28% APR would create.

Another way to avoid this issue is to transfer your Bank of America balances to a credit card issued by another company. There are a wide range of credit cards offering 0% interest rates for 1 year on purchases and balance transfers. You can compare balance transfer credit cards in the main section of SmartBalanceTransfers.com.

Also, please feel free to email us or post about your own experiences with Bank of America. Any information you provide can help other readers keep money in their pockets (and out of the banks coffers.)