April 15,2009
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News: B of A chases One Percent.
Escalating costs continue to motivate lending companies to seek increased fees attached to credit card use. Bloomberg reports the announcement by Bank of American, the third largest credit card lender in the US, to increase balance transfers from 3% to 4% of the dollar amount transferred. Customers of the Charlotte, North Carolina based bank were notified by mail of the increase which is scheduled to take place on June l, 2009. This latest news comes just days after BofA announced the intent to raise credit card balance interest rates. The move has outraged customers who maintain a good payment history and currently experience interest rates of less than 10%. This latest announcement is another attempt by BofA to combat huge losses resulting from the largest U.S. unemployment rate since 1983 and a stumbling economy.
It is not all negative for BofA credit card users. The lender also announced on April 14th that it is rescinding a previously planned increase in overdraft fees from $35 to $39. Additionally, the bank will provide assistance to some unemployed customers by waiving three months of account maintenance fees. Of course, it is important to note that these measures do nothing to benefit the credit card user with an excellent payment history who is still employed but continues to experience the crunch of increased living costs. The Center for Responsible Lending in Durham, North Carolina, a strong advocate of consumers, encourages credit card customers to voice their frustrations of interest rate increases and other arbitrary rate hikes
Rumor has it that BofA will not be alone in the transfer balance fee increase. Discover Financial Services also plans an increase from their current 3% to 4% as well. Citigroup, Inc. and JP Morgan Chase & Co. currently charge 3% on their balance transfers and at this time have not announced any intent to increase this fee. As credit card companies continue to slash credit limits, they continue to find other means to produce revenue. New rules by the Federal Reserve to protect consumers are not planned to go into effect until July of 2010. Until then, consumers can expect to witness new attempts by lenders at generating revenue.