Big Banking's Newest Credit Card Bait and Switch Scam

If you think that if you pay your monthly credit card bill on time each month that your credit card company can not or will not change the terms or your loan, think again. My husband and I had an MBNA credit card for about a year or so that converted to Bank of America when the entities merged. We paid our credit card bill on time every month. We never went over our credit limit. However, this did not stop Bank of America from nearly tripling our interest rate without warning, which resulted in a hefty increase to our monthly minimum payment. I hope you will take a few minutes to read our story and heed our warning so that what happened to us does not happen to you.

I should have known that something was wrong in February when I logged into Bank of America's convenient Portfolio online bill access system to review and pay my bill. To my surprise, my minimum monthly payment was $0. As nice as that seemed, I was sure that could not be accurate, so I called the credit card's customer service center. You see, it's very important that I make at least the minimum monthly payment on time each month for this credit card, otherwise the fantastic 9.99% interest rate that we were promised would be increased.

The Bank of America customer service representative confirmed that the online system showed that my minimum monthly payment was $0. However, she could understand why. Indeed, I owed what would be a normal minimum amount for that month, which was approximately $170. Since the problem was solved, and I paid my bill on time with no problems, I didn't think anything more about it. But, I should have.

The real trouble started in late April. This is when I logged into my Bank of America convenient online bill access system to review my bill, the minimum amount and its due date to ensure that I would meet my upcoming obligation on time as I did each month. I was shocked to see that my minimum payment had increased to $292, more than $100 more than normal. Had I charged something and forgotten about it? Had my husband? We try to use our credit cards sparingly and only for large purchases or necessities such as automobile repairs or unexpected veterinary bills, so I can usually remember what we've used the credit cards for in a given month.

A call to Bank of America's customer service answered my questions. We hadn't added up charges to our account. No, it seems that Bank of America had decided to review our account, which they have the right to do, and didn't like what they saw. Although nothing had significantly changed since we've opened the account, they concluded that they should nearly triple our interest rate! They suddenly decided that our debt-to-income ratio was too high, although it had not appreciably changed since we'd opened the account and notwithstanding that our new bank seems to think that our debt-to-income ratio is more than within acceptable limits. Nevertheless, given their less than stellar opinion of our finances, it seems Bank of America thought they'd help out their customers of "good standing," as they themselves termed us, by raising our interest rate from 9.99% to 24.90%, which raised our minimum monthly payment significantly and virtually guaranteed that we would never be able to payoff that credit card.

I was shocked, to say the least. "But, have I ever made a late payment?" I asked the Bank of America customer service representative. "No," she replied, "it appears that you are a customer in good standing with us." I was dumb founded.

Well, if this is how Bank of America treats their good customers, I would hate to see how they treat customers who may have made one or two late payments. And then I thought back to that mysterious $0 minimum payment due in February. I can't help but to think now that this was an attempt to bait me into missing a payment in order to bolster Bank of America's justification for raising my credit card interest rates! So, my first warning to you is to watch for unusual activity in regards to your minimum monthly payment. Whether higher or lower than normal, this could be a sign of trouble!

Turning back to the interest rate increase itself, you'll recall that I mentioned that according to our credit terms, Bank of America had the right to review our credit at any time and change the terms of our agreement. We were aware of this. But heed this as my second warning if you were not aware of this. This is common practice in the credit card industry, and it could happen to you. And, although we were aware of this possibility, we mistakenly and reasonably believed that if our financial circumstances did not significantly change and that if we made all of our payments on time, that Bank of America would not do something as outrageous to us as nearly tripling our interest rate to 24.90%. We have been Bank of America customers for nearly 10 years and regularly have significant balances in multiple banking accounts with them. We thought that might count for something. We were wrong.

So, if Bank of America was going to exercise its option of unexpectedly gouging us with high interest rates without cause, you would think that the least they would do was warn us. This might have saved us some money, because if we had been warned, we could have closed our accounts and moved our money before the change went into effect. However, we were given no notice. In fact, conveniently, Bank of America does not post interest rates on its convenient Portfolio online bill access system.

Now, according to Bank of America, they did attempt to warn us. They claim that they sent us a letter in January not only warning us of the rate increase, but giving us the option to agree to make no more charges on the account and then we would be permitted to retain the 9.99% interest rate. Well, we certainly would have accepted that offer! However, we never actually received this letter from Bank of America, and they can provide us with no proof that they actually sent it.

Further, we find it odd that in this day and age of online banking, what with Bank of America's promotion of their convenient Portfolio online bill access system, that a single letter that we were required to respond to in writing only would be their preferred form of communication with us about something so important. If they truly wanted to alert us to this information, why was no notice provided in the online environment? I have access to a plethora of Bank of America programs and services online. I can apply for credit cards, home equity loans or lines of credit, apply for a mortgage, pay bills, etc. It seems that one of the only things not available to me is to see information about my interest rates or respond to interest increases. This needs to be done in writing only? Is this 1960 or 2007?! Half the time when I log onto my Bank of America account, I'm not permitted to log out until I respond to of all things a credit card solicitation. They can find a way to communicate those solicitations to me easily enough online and with multiple mailings each month. However, with this critical financial information, they supposedly mailed one letter, which I never received, and make no other mention of it in any other of the ways they routinely communicate with me. It doesn't seem to me like Bank of America was in any way making an honest effort to make me aware of the impending rate increase nor provide me with a convenient way of responding to their theoretical notice.

So, we called Bank of America's customer service to explain the situation and give them the opportunity to do the right thing. We explained that we had never received the letter giving us the option to cease using the card and retain the 9.99% interest rate. We explained that we had gone ahead and cancelled the card anyway and would like the rate in good faith returned to that 9.99% as the letter had supposedly offered. They said simply that it was too late. Although they can provide no proof that they had sent a letter and no explanation as to why it makes any difference whether or not they should honor the terms now since clearly there was some mistake, the simply will not do it. It seems clear to me that they were set on raising our rate to 24.90% all along, and the way they've gone about it was sneaky and underhanded. This is not the way Bank of America should treat its long time good customers, nor any customers for that matter!

And this brings me to my third and final warning for you. Beware of credit card low interest rate teasers. I've come to believe that they granted us this credit card with the plan to eventually raise our interest rate all along. The excuse that they gave us for raising the interest rate was bogus, and their way of communicating that rate increase to us was sneaky and underhanded. What else is one to believe?

We will naturally be closing all of our checking and savings accounts with Bank of America, and I can tell that it will be a very satisfying day when we withdraw all of that money from their clutches. We are also in the position to be able to move the debt we have with Bank of America into a loan with another creditor. We are fortunate and will probably only lose about a hundred dollars in unfair interest charges. Many however wouldn't be this fortunate and would have to retain the credit line with the 24.90% interest rate. What a scam! That's why I wanted to write this article to warn others.

After my personal experiences with Bank of America, I looked around on the internet to see if others had suffered similarly. A few people had posted about having the same problem with their MBNA/Bank of America credit card. I also found a website where a lot of people were having the exact same problem with Chase bank. So, regardless of who your creditor is, be warned that it could happen to you. Heed my warnings:

1. Watch for unusual activity in regards to your minimum monthly payment. Whether higher or lower than normal, this could be a sign of trouble!

2. Be aware that your creditor may have the right to review your credit at any time and change the terms of your agreement, including dramatically increasing your interest rate, even if you make your payment on time each month.

3. Beware of credit card low interest rate teasers; they may be bait and switch scams wherein the creditor will bring you in at a low interest rate only to raise it later without cause.