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BofA and Discover Aren’t The Good Guys

Posted in Credit Card Deals by Jen Stryker
October 17, 2009 09:16 AM - 7 Comments

Bank of America and Discover have cast themselves as the virtuous credit card companies by pledging not to raise interest rates before tough new federal regulations go into effect in February.

But they can afford to be magnanimous because they’ve already raised the rates on many of their credit cards this year.

They can pledge not to increase interest rates between now and Feburary because they've spent most of the year raising rates on many accounts.(Remember posts like these about Bank of America and Discover’s rate hikes?)

We don’t know why supposedly savvy news sources such as Reuters and CNN haven’t called them on this.

Then, only a few days after announcing the interest rate freeze, Bank of America said it would begin imposing annual fees of $29 to $99 on some accounts that have been free up to now.

We can only conclude that having exhausted all the possibilities for raising rates, the Charlotte-based bank is moving on to annual fees because they aren’t regulated by the Credit Card Accountability, Responsibility, and Disclosure Act.

A spokeswoman told the Associated Press “we’re testing this to see what the feedback is.”

It should be an outraged: “NO! Cancel my card.”

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  1. Obama said:
    on October 17th at 12:50 pm

    Just goes to show you, the banks should not have received a dime. Let the losers fail!

  2. Credit Card Chaser said:
    on October 17th at 01:43 pm

    You might want to take a look at this article on Bloomberg that shows that BOA just incurred 4.7 billion in losses on its credit card operations: http://www.bloomberg.com/apps/news?pid=20601087&sid=aJsix7KnpWYE

  3. Rate Chaser said:
    on October 17th at 09:51 pm

    Once you talk about bailouts for everyone it becomes socially acceptable, no stigma, everyone wants on the bailout train! The question now, how the heck do you stop it?

  4. Brian J. Donovan said:
    on October 18th at 09:51 am

    The average interchange fee in the U.S. is seven times the interchange fee set by Visa and MasterCard in countries throughout the rest of the world. Using 2008 figures, if the interchange fee charged by credit card issuers was decreased (via comprehensive credit card reform legislation) from the current 2.10% to 0.60%, the result would be an annual savings of approximately $34.3 billion for U.S. merchants and consumers. Credit card issuers could retain 0.3% as a processing fee, the remaining 0.3% could be a “tax” used to fund a Natural Disaster Trust Fund (NDTF). In 2008, this would have generated $6.86 billion in funding for a NDTF.

    Let’s be clear. The interchange fee is a hidden tax, just not a tax subject to political control or for which there is any discernible social benefit. Decreasing, and imposing a transparent tax on, the interchange fee would have the same stimulus effect of a tax break, but without an impact on the federal budget.

    The following article discusses how comprehensive, standardized, simplified, and transparent credit card reform legislation may fund a Natural Disaster Trust Fund.

    http://www.csnews.com/csnews/images/pdf/creditcardreform.pdf

  5. Frank Fitton said:
    on October 21st at 11:51 am

    Annual fees have to be looked at as nothing but pure profit motive for the banks. Its just another in the long line of revenue enhancing policies by credit card companies. As soon as one way of making money is taken away, they just come back with another one.

    What Bank of America is doing here is sticking it to the people that don’t play the credit game the way they want you to play it. It seems to me that these would have to be the people that pay off their entire balance at the end of each month. Those people are the really truly financially responsible people, and Bank of America doesn’t really want them as customers.

    What I compare this too is imagine if you go to the grocery store and only buy items that are on sale every week. You spend your time searching out the deals and are applauded by some as a smart shopper. The grocery store then realizes this and based on that to decide to assess you an annual shopping fee. That wouldn’t sit right with anyone and I don’t see how the credit card companies should be allowed to get away with this.

  6. Terrin said:
    on October 21st at 02:02 pm

    It is hard to feel sorry for Bank of America credit card losses. As soon as Congress said they were going to pass some laws to make things more fair in the way companies deal with consumers, companies like Bank of America raised their rates substantially regardless of the card holders had been paying on time. This caused many people to not be able to make the payments. So instead of paying back the money, instead they filed Bankruptcy instead and didn’t pay anything back.

    If you ever lose your job, try calling Bank of America and asking for some help in reducing the payments. It ain’t going to happen.

  7. Pete said:
    on October 23rd at 01:08 pm

    What did you expect from BofA? After all, they issued credit cards and debit cards to illegal aliens.

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