According to a recent article in Business Week, Bank of America notified some of it’s best customers that they’re rates would be increasing — in some cases up to as much a 28% APR — without providing an explanation as to why. Unlike issuers practicing universal default, Bank of America appears to be using super-secret criteria based on things other than your credit score to determine who gets an increase and who doesn’t.
Interestingly, one customer was told by a phone rep that “the reason for the increase was that he hadn’t been paying down his balance fast enough.” Hmmm… Let’s think about that for a minute… He’s not paying it down fast enough, so let’s increase his rate, thereby causing him to pay it down even more slowly. Nice.
Another customer recently received a credit line increase because of her excellent payment history. She then consolidated her debt by executing a balance transfer to her Bank of America card, but… She was hit shortly thereafter with a rate increase because her balance was now too high, even though it was still below the new, higher limit that they had just given her. Wait. What?
If you’re among the affected, it appears that your only recourse is to “opt out” of the rate increase by writing to them and agreeing that you will no longer use your card. You cannot call, and there is no opt out form provided with the rate increase letter. That being said, it might be worth trying to call and negotiate with them before canceling your card.