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What Are My Options For Getting Bank of America to Lower my 27.99% Credit Card Interest Rate? – Chris

“Dear Steve,

My situation concerns Bank of America. Last november BoA lowered my limit from 16000 to 15000. at the time my balance was around 14700.

When my minimum payment hit me it sent me over my new limit and defaulted me and I was charged with a 27.99% interest rate. The extra interest fees i was paying sucked up the remainder of my savings that I had to pay off my minimum until february. DId i mention i was in college at the time?

I have a good payment record with BoA. But i basically ran out of money after January and could not make my february payment. I just got employed amd i am making about 2100 a month, and i live with my parents and i have a car note.

I would like to get this down as soon as possinle but so much of my payment is interests. usually 350 in interest. WHAt can I do?

I am young I don’t want a closed account on my record. And i am trying my best to pay them. I recently paid 1530 to be current with my account.

I have called several times and they keep insisting that i have to have 6 months of on time payments for my account to go under “review”. 6 months to be considered for review and i have been with them since 2003 ! I am out of options. I heard they black list people and close accounts arbitrarily and i dont want that to happen to me. Please tell me my options, I have intent to pay in bulk each check but with 350 going to interest it will take a while.

My balance was 15800 last sat and i now its down to 14300. my new minimum payment will likely be about 500. of which 350 is interest. please please help me.

Given my situation what are my options in getting BoA to lower my 27.99% interest rate?

Chris”

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The Answer

 

Dear Chris,

It is unfortunately true that all of the actions Bank of America has taken are permitted and legal under current U.S. regulations and they are most likely in accordance with your cardholder agreement.

I know you don’t want Bank of America to take your credit card away or close your account on you but that is a possibility that exists for every credit card you and everyone else carries. The credit card and the account are your liability to repay but not your property. You get to use the account and pay Bank of America high interest rates at the whim and discretion of Bank of America.

I have heard some recent stories about Bank of America reducing interest rates to as low as 0% for people that are in financial hardship. The problem here is that as long as you are current on your account, you won’t have any of those programs offered to you. Plus you don’t have a great story to support you claim of hardship. It’s not like you just gave birth or lost a leg or something like that.

The banks position will be that you will need to quit school and work more to pay them. Yes, I know that is a sucky position but the belief of creditors is that as long as you are able to work to meet your obligation to them, you should. Everything else be damned.

The irony is that if you wanted to get special reduced rates you need to fall behind on your account by 30 to 90 days and that will hurt your credit and postentially get your account closed. You could also enroll in a debt management plan for reduced interest rates right now, but you risk a mark being placed on your credit report and the account closed as well.

So if you want to keep your credit clean you will need to make at least the monthly minimum payment that Bank of America wants to extract from you until the review period.

I hope you understand that the moves by the banks to increase interest rates is more about an opportunity for them to increase profit they make than about some cosmic reason. It certainly appears that the limit reductions and instant rate increases have been a seemingly intentional trap to trip up many and they got you.

And one last point, you could have been a great customer with them for twenty years, it doesn’t matter. You are only as good to them as your last payment. Being a good customer for a long period of time gains you now bonus points with the bank. If they want to squeeze you, they will.

Steve

What Are My Options For Getting Bank of America to Lower my 27.99% Credit Card Interest Rate? - Chris by

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Bankofamericacrooks

    Do everything you can to get away from Bank of America.  Find a bank who’s on your side, not out to scam you and American taxpayers (re: 2008 $45 billion gov’t bailout with your taxpayer money).  I’ve been with them for 15 years, paid them tens of thousands of dollars in interest and was only late a couple payments during my awful divorce.  My interest rate is at the default rate now, and they won’t change it claiming that even though my payments have been ontime for at least six months, they can now use my credit score to keep my rate where it is (it was just under 700 at the time).   Their TV commercials portray a company that has your back – they don’t, they’re just trying to pickpocket your wallet.  If you’re not convinced that it is an awful organization, just read:
     http://www.rollingstone.com/politics/news/bank-of-america-too-crooked-to-fail-20120314

  • N.B.

    You don’t have to get behind on your payments for Bank of America to close your account. I have been with Bank of America for 13 or 14 years. Many years ago I was late one day by mistake twice  making a payment. But in recently years I have made every payment on time every month. Last week they closed my credit card account based on me having bad credit. They said that it didn’t matter that I had a near perfect payment history with them and a perfect history in the last few years. They said all that mattered was that my low credit score made me a credit risk and they closed my credit card account. I promise I will never do business with Bank of America again as long as I live. I think dealing with them is always a mistake in the end.

    • http://GetOutOfDebt.org Steve Rhode

      Unfortunately it just reinforces the fact that it’s always the creditors ball and they can pick it up and take it home at any time.

  • Steve Rhode

    Well I hate to be skeptical but with the sudden shift in politics yesterday (Election Day 2010) it is unlikely that there will be more changes in law to protect consumers. In fact the public cry now is for less government and the abolition of some government agencies. If the politicians voted in adhere to many of their public messages then it is very possible that the banks will soon have more power, not less.

    If you want to make sure consumers are protected from such actions, call your politicians and tell them you want more laws to protect consumers.

    The new Consumer Financial Protection Bureau might offer some hope but I’ve heard talk by politicians wanting to roll that back or significantly reduce funding. Smaller government and all that. If that happens, well, then…

  • Plb

    Steve,

    Your response to Chris is one of the major problems killing our economy and folks trying to get out from underneath their debts. With interest rates of 24+% and lower credit scores imposed upon individuals, it is almost impossible. You call B of A and they do nothing because they can hid behind the current regulations and laws.

    So, my question is simple, what can we the people do to get the laws/regulations changed and stop the extortion and bleeding of Americas?

    As you stated “It is unfortunately true that all of the actions Bank of America has taken are permitted and legal under current U.S. regulations and they are most likely in accordance with your cardholder agreement.”

  • Plb

    Steve,

    Your response to Chris is one of the major problems killing our economy and folks trying to get out from underneath their debts. With interest rates of 24+% and lower credit scores imposed upon individuals, it is almost impossible. You call B of A and they do nothing because they can hid behind the current regulations and laws.

    So, my question is simple, what can we the people do to get the laws/regulations changed and stop the extortion and bleeding of Americas?

    As you stated “It is unfortunately true that all of the actions Bank of America has taken are permitted and legal under current U.S. regulations and they are most likely in accordance with your cardholder agreement.”

    • http://GetOutOfDebt.org Steve Rhode

      Well I hate to be skeptical but with the sudden shift in politics yesterday (Election Day 2010) it is unlikely that there will be more changes in law to protect consumers. In fact the public cry now is for less government and the abolition of some government agencies. If the politicians voted in adhere to many of their public messages then it is very possible that the banks will soon have more power, not less.

      If you want to make sure consumers are protected from such actions, call your politicians and tell them you want more laws to protect consumers.

      The new Consumer Financial Protection Bureau might offer some hope but I’ve heard talk by politicians wanting to roll that back or significantly reduce funding. Smaller government and all that. If that happens, well, then…

  • mary

    Who does one need to contact about interest rates at BoA. When I have tried to talk with them about my rate, I was forwarded to a dept. that deals with putting people in some kind of program where you had to tell them all your financial debt. I just want my interest rate lowered… The final Credit Card Law says that after paying on your debt for 6 months, they have to review your account. Of course, they are not going to offer this on their own, so what’s the ph# that I call to get the right person to take care of this?

  • mary

    Who does one need to contact about interest rates at BoA. When I have tried to talk with them about my rate, I was forwarded to a dept. that deals with putting people in some kind of program where you had to tell them all your financial debt. I just want my interest rate lowered… The final Credit Card Law says that after paying on your debt for 6 months, they have to review your account. Of course, they are not going to offer this on their own, so what’s the ph# that I call to get the right person to take care of this?

  • http://www.friendsandmoney.co.uk Jonathan@Friends&Money

    great response, it’s always helpful having feedback from an expert and someone who understands the legal framework from a financial perspective

    Jonathan@Friends&Moneys last blog post..How To Talk About Debt Problems With Family Members

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