…and now it’s Bank of America’s turn

I sort of have another credit card that I don’t use. The balance is my mother’s, from back before her declaration of bankruptcy when I was trying to bail her out with my low-interest cards. The rate on her transferred balance is awesome: Prime + 1%. For more years than I can count, my ridiculous credit limit on that card was $24,000. Last month, they halved it. The balance owed is only about $1700, and messing with my limit bothers me FAR less than Citibank’s rate hike, but it led to me and my mother to speculating…

Why did Citibank raise my Mastercard rate, when I never carry a balance?
We came up with a couple of possibilities. At the “nice” end of the spectrum, I thought maybe they were trying to boost their average rate across the board as painlessly to their customers as possible, that somehow it would make them look better on paper for the regulators or whatever. At the other end, my mother suspects that those of us who don’t pay any interest because we pay off the cards are unlikely to object because it doesn’t really affect us – but Citi is now lying in wait for us to lose our jobs and need our credit lines.

Why did Bank of America halve my Visa credit limit?
In the letter, they said something about information from my TransUnion credit report (the only one that didn’t think I was a shining example of creditworthiness for no reason I could fathom). Given the timing, I would hazard a guess that it improves their performance on that Stress Test to have reduced their exposure to consumer credit. It doesn’t have much of an impact on my debt-to-credit ratio. Okay, so it just about doubled, but 6% to 12% isn’t going to set off alarm bells anywhere. I actually commend BofA for going this route in their overhaul – I should never have had access to that much unsecured credit in the first place.

Bank of America is my oldest card these days – I’ve had it about 9 years (and according to Experian, that’s not old enough to score me full points). When my mother finishes paying it off, we’ll see what terms they’re willing to offer me…wouldn’t mind escaping Citibank.

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2 Responses

  1. Citi needs the fee income, so my guess is they’re jacking the rates in an effort to squeeze more out of consumers. While I agree that B of A shouldn’t have given you $24k without you needing or asking for that amount, I’m surprised they didn’t raise your rate. The credit union I work for sold our portfolio of credit cards to FIA services 2 years ago. FIA services is housed with B of A. About a month ago, B of A decided they were raising the rates on everyone’s card that was under 10% and carried a balance. This also affected FIA services and thus, the members of my credit union who held the card. Even employee cards were increased.

    I’m not sure why your B of A card kept it’s excellent rate, but I hope you get to keep it for longer. Maybe you lucked out for being a loyal customer, who knows, but keep doing the right things so they don’t jack it up on you.

    • That rate was locked in when I got the card – I’m pretty sure it only applies to balance transfers. Now that I think about it, I’m surprised how good the rate is because there were two transfers: when I opened the card, and then again 3-4 years later. I have no idea what the rate on purchases is because I haven’t used it like that in…well, it’s been so long that I’m not sure if I’ve ever used it for purchases.

      They’ve been screwing around with the bill due date a lot lately, varying between the 15th & the 22nd, trying to trip my mother up (she pays the card because it’s her debt) so they can exponentially increase the interest rate. Heh, we’ve been onto the due date game since the days when they’d forgive you for missing it every now and then.

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