It's nothing compared to what Bank of America is up to.
Be warned - if you have a Bank of America credit card (they are among the largest credit card issuers), your interest rates may soon double - even if you've been a good borrower.
Business Week reports that Bank of America, apparently desperate for cash, sent letters to cardholders in January informing them that their rates are going to double but failed to give a reason for the increase. Cardholders were given a phone number to call for more information, but reportedly still didn't get an answer as to why their rates were doubling.
This is a troubling story and well worth a read.
Here are a couple particularly shameful cardholders' experiences mentioned in the article:
Michael Jordan, 25, a software developer who lives in Higganum, Conn., says he received a letter from Bank of America in late January advising him that his card rate would rise from 9.99% to 24.99%. The software developer, who earns $80,000 per year, says he was "shocked" because his payments had been on time and his credit score hadn't changed in the last year. In fact, Jordan says, he has only $4,500 in overall outstanding credit-card debt on two cards and that, on the Bank of America card in question, he had paid down his balance to $3,000 from $3,700 last August. "His rate increase seems unjustified based on his credit profile," says David Robertson, publisher of The Nilson Report, a credit-card industry trade publication.
Bank of America is trying to get ahead of Amanda Pennington, 29, of Euless,Texas. She says the bank raised her credit limit three months ago from $5,000 to $8,000 because of her strong payment history. Then she got the letter from the bank in mid-January notifying that her rate would rise from 15.74% to 25.99%. When she called, she says, the bank told her it was raising her rate because her balance was now too high, though it was still under the higher new limit the bank had previously granted.
Nice, Bank of America. You're a real class act. I won't cry when you lose $10 billion on your Countrywide bailout.
Once again I'll say it: Beware of the predatory lender in your wallet.
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