I just received notice from Bank of America that the interest rate on my wife’s credit card is going to go up to 24.99%+ starting mid-January. This isn’t the default rate, (that’s 32% or more) but it’s the new rate for new and existing balances on the card.

Now, we’ve never been late, and our credit rating is just fine, and it’s ONLY for this one card. We have other cards with BofA that aren’t affected. The only reason I can discern so far is because we’ve taken advantage of the original balance transfer offers.

The Backstory

Originally when we opened this account it was a pretty sweet zero interest, zero cost balance transfer card (for 6 months, then up to a max of 7.9% for the life of the transferred balance). So we surfed another higher interest rate balance to this one, set it up to automatically be paid from our bank account (also BofA) and forgot about it. For the better part of a year it’s been just GREAT. Minimum payments being paid and zero interest. Couldn’t be better – for us.

I guess someone in BofA finally realized that they’d tied up a few thousand dollars with someone that would diligently pay on time. Not good for them, since they don’t make any money off of it, and can’t move the money to another loan that can. Their response? To pull the “we can change the terms any time we want” lever and modify the terms of the contract.

The Fine Print

As with all credit card agreements, there are pages and pages of addendums, whereofs, and other legalese that amounts to “it’s our credit card, and we can do whatever we want, whenever we want”. The alternative is always to close the credit card and pay off the balance immediately. Kind of harsh, but not that unusual. However, this is the first time I’ve had this clause pulled on me in so blatant a way. Usually, if there’s a change like this, it’s across all of the credit cards offered by the company, not a specific card.

What to Do?

Since I’ve got a few months to continue to take advantage of the zero interest rate, I’m going to leave it where it is until Jan, then either pay it off or move the balance to yet another low-interest credit card. Either way, it’s not enough to cause me to stop doing business with BofA (Overall I’ve had excellent experiences with them, other than little snafus like this).

The Moral of the Story

As always – Caveat Emptor (Let the Buyer Beware). The terms were spelled out and they adhered to their side of the arrangement, no matter how one-sided the arrangement originally was. I can’t fault them for taking a hard-line on a transaction that was costing, rather than making them money. My advice to the readership; Take a minute and re-read your agreements, so if things like this happen to you, you understand whether they are doing something questionable, or something well within their rights.

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