April 10,2009
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News: Rate Hikes Everywhere, including BofA.
The Wall Street Journal has just announced the news of massive credit card rate hikes on the near horizon in the blogosphere (gotta love those blogs). Coming up next month, most of the larger credit card banks are planning rate hikes for millions of accounts. BofA was tagged as one of them though I'm not sure why they were singled out. Although not the largest in the world (that would be Citigroup), BofA is said to the largest credit card bank in the US. BofA has, however, issued some 70 million credit card accounts worldwide.
Most reporters will tell you that means 70 million customers but that's not true. Most of those accounts are held by only one person – me. Maybe not all 70 million but at least 8 of them. Many people, I'm finding out, have several credit card accounts open with BofA. This bank admits that they're having to raise APRs on a few million accounts which currently have low APRs while carrying high balances. The reason for this is the unprecedented rate of growing uncollectible accounts they have to eat. The actual number of credit cards affected is less than 10% of their US accounts (not 10% worldwide. We don't have the number just for the US).
It's worth noting that each credit card lending bank is unique and that BofA can be one of the best banks to work with. A blanket move like this isn't necessarily a ‘sledge-hammer down' move. There is a strong likelihood that, those who take the trouble to call the bank can make arrangements with to reinstate low APRs by lowering outstanding balances and knowing the right approach. One happy-ending was reported by a woman who contacted the San Jose Mercury News Action Line. Read about is in my last article entitled: "Credit Card Nightmare has Happy Ending".