What Are My Options For Getting Bank of America to Lower my 27.99% Credit Card Interest Rate? – Chris
March 30, 2009
Chris wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.
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“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”
Steve’s 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
Source: What Are My Options For Getting Bank of America to Lower my 27.99% Credit Card Interest Rate? – Chris
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Tags: bank of america, boa, interest rate, lower credit limit, minimum payment
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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