Last week I was informed that the MBNA credit card I’ve had for years was “acquired” by Bank of America. Ok no big deal, mergers go around all the time as big corporations get even bigger by swallowing other corporations whole.
But I was shocked to discover that my interest rate had soared. It was around 12% previously, but now, thanks to the merger and corporate greed used to pay for that merger, my interest rate was raised to: (drum roll, and please sit down while reading) 24.97% !! The friendly note from the “BofA customer satisfaction center: said “I could of course pay off the balance and avoid the rate change”. Gee, thanks.
WTH? I have excellent credit, no late payments on this card, and I’ve been with BofA since 1994 when Jolene Francis signed me up. I’ve had business loans, home loans, car loans, and my savings, personal, and business checking account with BofA since then, and thanks to the same sort of corporate weasel thinking where the Bank is more important than the customer…one by one, all of these accounts where transferred to other more sensible banks when BofA announced some amazingly stupid new “plan” to improve “customer satisfaction”.
Here’s some insight into the national credit card problem by SF Chronicle columinist David Lazarus
Now, I’d point out that an interest rate of 25% generally makes it impossible to pay off a loan if the consumer pays the minimum payment listed on the bill. So it became clear to me that BofA was financing their shiny new merger with MBNA. Despite layoffs at MBNA designed to sweeten BofA’s bottom line, they just couldn’t resist sticking consumers with the bill for their merger.
So today marks my end of my 12 year relationship with Bank of America. Hello Discover Card. Hello WaMu.
It amazes me that banks keep pulling these kind of Enronesque stunts and still keep customers. They certainly lost me, and my company business, because they simply got too greedy. The only way consumers can fight back against these sort of practices is to cancel accounts and do balance transfers to more reasonable companies. For example, Discover offered me a balance transfer at a very VERY low interest rate, a bargain compared to 25% from BofA!
From David Lazarus column I found this nugget of wisdom:
“All in all, the world of plastic is an uneven playing field. This is something that should never be far from mind as you spend the next month or so probably running up your biggest credit card bills of the year. “
Corporate mergers never seem to do anybody any good. Debt is acquired with the mergers, and workers get laid off to finance it and the customers get stuck with the bill over the long term. Customer service usually takes a nosedive. Shareholders may earn dividends, and the inner sanctum of corporate weasels that structured the deal usually make out like bandits. But the customer usually suffers at their expense.
I think on the whole, corporate mergers are bad for America, as is excessive credit card debt.
I haven’t an opinion on mergers but I just had an increase on a Chase card I never use. From around 9% to over 20%. So, I called them and said “cancel”. They countered with 15%, I said “cancel”, they countered with 9% and I said “OK”.
I won’t be using the card, I have some with even better interest rates, but I once learned that one of the metrics on good credit is to have it and not use it, i.e. to have a large line of credit but to owe as little as possible.
Time to take advantage of 0% for a year credit offers that usually have a 3% or less transfer feed and dump your old card. Be sure to tell them it because they stiffed you with an outrageous interest increase.
P.S. I have always enjoyed your weather spots on TV and radio and your occasional visits on Bruce Sessions’ “Live Line”. Thank you for your service on the school board.