Last month during the Great Credit Card Debate I mentioned “rate-jacking” as one of the evil little ways credit card companies seperate you from your money. With all of the Congressional attention one would think they might have laid low for a while … but apparently Bank of America isn’t. In fact, at the same time I was trying to warn people of rate-jacking Bank of America was sending out notice of their latest way to bring in money. BusinessWeek wrote about it yesterday, and before publishing their two-page expose they tried to get some kind of explanation.
I’ve read the article over twice, trying to find Bank of America’s explanation … and it sounds so vague as to be nonexistant. This sounds like a classic case of rate-jacking, where the company is jacking up interest rates solely to bring in more money. And where can they get more money in this new age of credit card defaults and tightening credit? From their most reliable customers, of course!
Folks, if you have a BoA credit card, go rummage through your mail from the last month to double-check that you haven’t been caught by this latest rate-jack. Their opt-out standards are:
The so-called “opt-out” letters give borrowers the option of no longer using their card and paying off the balance at the old rate. But they must write Bank of America by later this month if they plan to do so—otherwise their rates on existing and new balances automatically rise.
Of course if you read this particular blog, that shouldn’t be any problem for you since I am all about paying those leeches off and getting them out of your life forever! But I see absolutely no need to pay them any more money than absolutely necessary, and I am sure you don’t want to indirectly bail out their purchase of the now-infamous subprime mortgage lender Countrywide (who BoA recently purchased).
Rate-jacking is very real, and I expect to hear about it more and more as things get bleaker and bleaker for the credit industry. The absolute best defense against such insidious tactics like rate-jacking is to simply pay those credit cards off and never ever carry a balance again! (Personally I would prefer to hear that you never use them again, but I have become slightly realistic lately.)