The Truth of Credit

You may not have been effected yet, but the method of unwarranted increases to customer’s rates is common in the credit card industry. On the Net you can find numerous reports of this happening, many times to shocked consumers who pay their bill on time every month and suddenly find their rate has been replaced with a “vic” of 28 percent. Many of these increases are credited to changes in your FICO score, although Bank of America claims that it uses other criteria as well. That means that even if you pay your bills on time and your FICO does not change, your rate could be increased just because you carry a high balance, even though it is under your limit.

Other companies, such as Citigroup and JPMorgan Chase, have raised rates based on FICO changes in the past, but in front of a December congressional hearing on the subject initiated by Senator Carl Levin, they both announced they would no longer do this.

The TRUTH is that it is legal to raise a customer’s rates for no reason, as long as you notify them, and that is why Bank of America can continue its unwarranted increases. Some customers even report recently receiving a credit line increase because of their good credit and then later when they utilize the credit they are slammed with higher rates because their “balance is too high.”

Bank of America, we’re calling you out. You seem to be the only issuer still unfairly raising rates of good customers. Shame on you, Bank of America, for trying to compensate for the expected rise in charge-offs this year. In the past year credit card industry charge-offs have increased about half a percent to roughly 5 percent of all receivables.

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