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Author Topic: Bank of America Raises Rates
KnightEnder
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BofA is raising its rates on people that have credit cards with them. You know, the people that pay taxes and just gave them million and millions of dollars?

We should figure out how much each of those poor saps payed in taxes that went to the bailout and subtract that from their credit card balances.

Of course some people are going to say; you sign a deal with a bank that says you will pay whatever rates they set even if they raise them, then you deserve what you get.

To that I'd say; maybe if we hadn't just bailed their ass out I would have more sympathy.

Nice of them to pay the taxpayers back by raising rates on taxpayers.

They are plan on paying us back with that revenue, right?


The Stock Market is doing great AND Wells Fargo is announcing that they made several billion dollars last quarter. Things are turning around! Say it isn't so, Fly!

I'm watching Cavuto, yes I'm that bored, and they just had a poll that shows that about HALF OF AMERICANS PREFER CAPITALISM TO SOCIALISM. ONLY HALF! And that is a Fox News poll! Man, what a difference 8 years of GW makes. [Smile]

I wish Joe McCarthy was still alive. [Smile]

KE

[ April 09, 2009, 04:03 PM: Message edited by: KnightEnder ]

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KnightEnder
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This is the same company that used to charge me to cash my check at their bank ($30 a pop) because my company had an account there but I didn't. So, my company owed me money, which they gave me, but I had to pay somebody else to actually 'get' that money!

Which is why if I ever 'need' to rob a bank, it's a no-brainer. Modern day Jesse James, baby! [Smile]

KE

[ April 09, 2009, 04:02 PM: Message edited by: KnightEnder ]

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Kuato
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I am encouraging a certain mayor to consider condemning his local banks and declaring the municipality its own bank charter.

*spit*

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G2
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quote:
Originally posted by KnightEnder:
BofA is raising its rates on people that have credit cards with them. You know, the people that pay taxes and just gave them million and millions of dollars?

Rising interest rates is something you probably should get used to now, this is only the start.

quote:
Originally posted by KnightEnder:
We should figure out how much each of those poor saps payed in taxes that went to the bailout and subtract that from their credit card balances.

Why would you want to do that? We know the money had to be spent by the government this way because if we let people spend the money they would have done something stupid with it - like pay off their credit card debt. Now you're saying we should apply that money to credit card debt?

quote:
Originally posted by KnightEnder:
Of course some people are going to say; you sign a deal with a bank that says you will pay whatever rates they set even if they raise them, then you deserve what you get.

Well, yes. Stupidity has its rewards. So does doing what you agreed to do.

quote:
Originally posted by KnightEnder:
Nice of them to pay the taxpayers back by raising rates on taxpayers.

What do you think they owe you? Or me? Or anyone?

quote:
Originally posted by KnightEnder:
They are plan on paying us back with that revenue, right?

Not if the Obama administration can help it. It's become pretty obvious there is a desire to keep state ownership of large banks in the US.


quote:
Originally posted by KnightEnder:
The Stock Market is doing great AND Wells Fargo is announcing that they made several billion dollars last quarter. Things are turning around! Say it isn't so, Fly!

Unemployment is still rising. So Wells Fargo makes about $3 billion, people are hurting! Something has to be done ...

quote:
Originally posted by KnightEnder:
I'm watching Cavuto, yes I'm that bored, and they just had a poll that shows that about HALF OF AMERICANS PREFER CAPITALISM TO SOCIALISM. ONLY HALF! And that is a Fox News poll! Man, what a difference 8 years of GW makes. [Smile]

If you actually think for a minute, you'd realize that Bush has nothing to do with that. Knee jerk Bush bashing for every ill you can conceive is getting tiresome, still remains entertaining though. This train has been rolling from liberal quarters for more than a generation. If you think 4 years of Obama is going to slow it, then you've really left the reservation. Just look at the budget and the nationalization of banks.

quote:
Originally posted by KnightEnder:
I wish Joe McCarthy was still alive. [Smile]

careful what you wish for, you just might get this one ...
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kenmeer livermaile
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"What do you think they owe you? Or me? Or anyone?"

In the real world, customers expect some kind of loyalty from the companies they patronize. I think it's a delusional belief and a false premise, but that is a big part of the Invisible hANDJOB FREE-MARKETEERS BELIEVE IN. (oops)

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Colin JM0397
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Wells also just cut 7% of their work force in order to gather enough money to attempt to pay back the TARP.

I'm sure they are up to something, however Wells was one of the few large banks that held their own mortgages and did not engage in the risky loans and CDS garbage. However, former Golden West, which sealed the death of Wachovia, did, and now Wells owns those assets.

I have a 0% interest until May 2010 card from BOA. While all mortgages are scams at any rate and costs, they still gave me a pretty good rate with no PMI a few yrs back so I can’t complain too much about BOA. That and between them and Wells they keep Charlotte alive…

Kenmmer - ever see idocracy? How about a latte and a handjob?

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Wayward Son
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Who still does business with Bank of America these days?

I dropped them back in 1980 when they raised the minimum balance on their savings accounts (leading the way of every other bank) and haven't looked back. I knew they didn't give a rat's patootie about the little guy way back then.

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Wayward Son
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quote:
I have a 0% interest until May 2010 card from BOA.
OK, who else still does business with BOA...? [Embarrassed] [Smile]
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The Drake
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quote:
Originally posted by KnightEnder:
BofA is raising its rates on people that have credit cards with them.

First, a little correction here. They are raising their rates on customers carrying balances and have current rates below 10%. That's a little less unreasonable than jacking them on everyone. A company spokesperson said this is about 10% of their customers.

Bank of America is not unique. Other banks are doing something similar. This actually makes sense, because with the drop in economy and increased joblessness, credit card default is a greater risk.

Should we blame banks for inadequate assessment of risks, and then complain when they adjust to greater risk appropriately?

Second, you don't have to accept the new rate. Pay close attention to everything your credit card company sends you, and read it the day it arrives. All the BoA customers have to do is send a registered letter saying that they decline the new rate, and will keep paying the balance at the old rate.

Do not use the card, and that includes automatic charges.

Finally, a massive bill was passed last year, but not taking effect until July 2010. Under the new law, rates cannot be raised on a customer unless they are 30 days late with a payment. It also says that rates cannot be hiked if a customer is late paying another bill. So credit card #2 has to wait for its customer to be late paying them, even if the credit report shows that the consumer has been missing payments on other bills.

To me, that is the government tying the hands of credit companies to deal appropriately with risk.

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scifibum
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quote:
Should we blame banks for inadequate assessment of risks, and then complain when they adjust to greater risk appropriately?
I don't blame banks for trying to protect their profits, but I do think it's a ****ty thing to do to your customers who have been paying their bills. And, please note, by hiking the rate on existing balances, you are squeezing the cash flow for those customers, and making it MORE likely that those specific customers will have difficulty keeping up with their bills.

I suspect that they want to identify their most loyal and reliable payers, and now, while customers will have a harder time transferring balances, squeeze them for all they are worth. They are pretending that they are guarding against risk from these very same customers, but if these very customers were risky, they'd be increasing the likelihood of default by hiking the rate. It doesn't compute, for me. I think its opportunism and, again, a ****ty way to treat your customers.

quote:
All the BoA customers have to do is send a registered letter saying that they decline the new rate, and will keep paying the balance at the old rate.

Do not use the card, and that includes automatic charges.

Wells Fargo did this with me, and I could decline their hike but only by closing the account. Sounds like BoA doesn't require it to be closed but simply not to be used? Either way, it's saying "uh yeah, you know that old deal we had? It's over now. You can either accept modification A: higher rate, or B: you can't use the account anymore. Thanks bye."

I'm glad that Congress is prohibiting this bs. The companies need to develop business models that don't require the ability to screw the customer when it becomes expedient. (If that makes consumer debt more expensive up front, and less attractive, then fine.)

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KnightEnder
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Drake,

Where did you get all that information? Cause Cavuto didn't mention any of that? Thanks.

KE

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RickyB
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Drake, you'ze making quite a bit of sense lately.
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scifibum
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"To me, that is the government tying the hands of credit companies to deal appropriately with risk."

The line they used to use was that your interest rate was tied to their assessment of your overall creditworthiness and risk profile. Make a lot of money? Pay your bills on time? We want to lend you money and give you a good rate.

Yet now they're taking the people with the lowest overall risk, and jacking up their rates. Coincidentally, right when it's most difficult to take your business elsewhere.

I'm getting hung up on "fairness" here which I know is dumb. I should not sign up for credit cards under an agreement that allows for something I find objectionable (which I did).

But I am making noise because I think it's unethical to spring this on people who have been meeting their obligations. I also think it's shortsighted. Wayward has a long memory. I think I will too. I think I am done with big banks; I've found my local credit union is far, far less prone to charge ridiculous fees or otherwise squeeze me just because they can.

(I think this so-called management of risk is targeted for the next few fiscal quarters and they are disregarding how this treatment of their best customers is going to affect them a few years down the road.)

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KnightEnder
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But Scifi, big banks are more reliable. You want to protect your money, right?

KE

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Kuato
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Chase is doing it too.

I honestly hate these guys.

1. they occlude the access to capital
2. they raise rates on renting capital, because capital is scarce

when do we get to take them out and shoot?

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scifibum
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quote:
Originally posted by KnightEnder:
But Scifi, big banks are more reliable. You want to protect your money, right?

KE

Great point. [Wink]
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The Drake
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link to new legislation article

Citibank rate-jacking article

2005 - more banks hiking interest rates

Which customers are affected by the latest BOA rate hike

"Yet now they're taking the people with the lowest overall risk, and jacking up their rates."

Not the lowest risk, necessarily, but yet not the worst, I agree.

BTW, I don't consider it to be good customer service, and if I were on a bank's board of directors, in-between pouring fresh glasses of 100-year-old scotch purchased with TARP funds, I would advocate against such a strategy.

"Sounds like BoA doesn't require it to be closed but simply not to be used?"

That's right. The account isn't fully closed until paid off.

"Drake, you'ze making quite a bit of sense lately."

Thanks, Ricky.

Another tidbit - banks will not be prohibited in new legislation from using these tactics on businesses - only individual consumers.

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IrishTD
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Really, it's just a game of chicken between the banks and the feds right now. The banks are betting on "outraged cardholders" to bitch and moan (which they are) about the changes, and then they'll blame it all on the feds. The feds are hoping that the "outraged cardholders" are fed up with the BS that comes from the card issuers and willing to deal with the changes from the new regulations.

Edit to add: Right now, I'm betting that the banks win since the "outraged cardholders" would rather deal with the current card issuer practices than the short term pain of higher rates.

[ April 10, 2009, 03:17 PM: Message edited by: IrishTD ]

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Kuato
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I don't see how cardholders can tie one to the other. Cardholders bitch about the rates, those rates aren't affected by whether or not the Bank has accepted equity participants aka the govt. In short, the bank can't blame the interest rate hike on the fed. The FED does all its lending at the lowest rates there are, which is why it is called "prime."

If anything, doesn't this fuel the ire of Americans to force the banks to accept/keep the TARP since apparently only the FED can give low-risk rates so why not FORCE the banks to keep the bank's terms to the cardholder by FORCING the banks to continue/accept low-interest fed money rather than allow the bank to bilk them because the banks want you borrowing "bank" money instead?

[ April 10, 2009, 04:11 PM: Message edited by: Kuato ]

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The Drake
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Maybe the consumer will be reminded of what short-term revolving credit is supposed to be used for, and accept the blame themselves?

No, too silly, too silly. Stop that.

As for revolving credit amongst companies, check out a site called creditmall.org

They list all kinds of credit offers, make a balance transfer if you can and save big $$ on interest for big balances - or get the kind of reward program you want.

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KnightEnder
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Surely you're not that naive, Drake? I don't have any credit cards, except for the one given to me by my work. We use bank check cards (Chase [Frown] ). But the vast majority of credit card suckers are suckered into this racket purposely by the banks who choose people who mostly can't pay off their "short-term revolving credit" so they can keep milking them for the interest until they die.

KE

[ April 10, 2009, 04:59 PM: Message edited by: KnightEnder ]

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KnightEnder
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Can't believe I've had to accuse TWO members of this forum of being 'naive' in one week time-span. [Frown]

KE

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IrishTD
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I didn't say fed as in Fed Reserve. I said feds, as in Congresscritters, etc. The links to the new laws/regulations Drake posted take effect in july 2010, but congress is trying to speed it up.

They're going to make it more *costly* for the banks to offer credit cards (by making it harder for them to make outsized profits). This rate-jacking is simply a form of keeping their profits where they want 'em. Not really any different from any other business out there.

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Redskullvw
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KE

You realize that most people with credit card balances, and by this I mean credit cards instead of charge cards, could easily pay off their balances simply by making appropriate lifestyle choices? Instead of eating out a dozen times a month, buying a new DVD, getting that drop dead gorgeous looking leather coat, and using a bus a couple days a week instead of driving their SUV to work that they would easily net to their bottom line $500 on average?

I mean seriously, if you have $20,000.00 in debt and are comfortably ignoring paying it off, then you can indeed not really care what the actual interest rate is. But if you did want to pay the whole thing off in a 12-24 months, all it takes is not being a trendy idiot. We slapped $5000 on our credit card balance last month. We had no problems with making minimum payments. And if we had wanted to we could have done that indefinitely because it would be cheap to do. We could certainly have used that $5,000 on lifestyle stuff. But unlike most Americans we tend to live well under our means. And that equates to the fact that except in exceptional life altering circumstances we don't carry a balance on our cards beyond what we could pay off in a month.

Credit cards aren't a racket if you understand their use and purpose. Most don't so getting a rate increase as the economy tanks is likely a well deserved warning to them to rethink their credit levels and use of credit.

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KnightEnder
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Red, I agree in theory. But, IMO most Americans are not comfortable or knowledgeable about finances and the banks and credit card companies prey on them. Of course our whole country is steeped in a culture of "buy now pay later" with Madison Avenue and the government convincing them that not only is it alright but that "they deserve stuff they can't afford".

(Thank God we don't have credit card debt. That is one mistake Stacy and I managed to avoid. And thank god that my son's school was good enough to educate him on the dangers of credit card companies that prey on college students.)

And I'm also not as sure as you seem to be that in this day and age "most people" are able to pay off their credit card debt NO MATTER how frugal they try to be.

Edited to add: Oh, I see in your last line that we agree even more than I thought. [Smile]

KE

[ April 10, 2009, 07:25 PM: Message edited by: KnightEnder ]

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