I Just Got Screwed by Bank of America Credit Card

[jeffrey]

I received this in my email - I figured this group could help him:

<i>Okay... I feel I just got screwed by my credit card company, Bank of
America, and I am a EXTREMELY pissed off right now and wanted to VENT
and see if you think I am justified in being so PISSED OFF and what you
would do if you were in my situation.

Please read... and then give me your honest opinion of the situation. I
am seriously considering starting a class-action lawsuit; because I
know that I am not the only person this has happened to... in fact, I
bet it has even happened to YOU!

Here is the deal...

Recently Bank of America sent me a promotional offer to transfer my
higher interest credit cards to their company at a special 0% APR. Of
course I jumped at the deal and decided to transfer a balance from
another card with a higher interest rate.

Here is what I did and how I got screwed...

My credit balance was $0 and my credit limit on the Bank of America
card was $3,500 and I decided to transfer the whole $3,500 balance from
another high interest credit card. Sounds good right? Well, when I
received my first bill in the mail from Bank of America my new balance
was $3,545.48 a portion of which was for an OVER THE LIMIT FEE, so I
immediately called Bank of America and they claimed it was because the
transfer was subject to a 4% "Cash Advance Fee," but wasn't I
doing a "Balance Transfer?" Now here is the kicker... they also
proceeded to tell me that since I am now over the limit, my credit card
is no longer eligible for the 0% interest rate and my new interest rate
is 7.9%.


So, I thought that I was going to have a credit card with $3,500 owed
and an interest rate of 0%, but now I have a credit card with $3,545.48
balance and an interest rate of 7.9% and Bank of America absolutely
would not do anything about it. All they could say is that I should
have read the fine print; which I did. In my opinion, this is a total
scam and I want to know if this has happed to anyone else. Please, read
the offer for yourself and see if I am crazy or even stupid. I really
think that Bank of America is just trying to pull the wool over
people's eyes and trick them into transferring their balances in
order to deceive them into paying, not only and over draft fee, but
also a higher interest rate than what was promised.


Just one more thing... notice that in the first paragraph they clearly
call it a balance transfer, then in the second paragraph they call it a
cash advance. That is what I am having the most trouble with... why
didn't they just say that this balance transfer is subject to a 4%
fee?

Now I ask, do any of you think this is ethical or even legal?

Finally, does anyone know of a good attorney for a case like this? I
really don't think they should be allowed to do this to anyone
anymore.

Here is exactly what the offer stated in the fine print:

The Annual Percentage Rate for Balance Transfers made prior to August
31, 2005 and for balances created using the enclosed promotional
convenience checks, is a fixed rate of 0% (0.0% corresponding Daily
Periodic Rate) ("Promotional Rate") through 12/10/05
("Promotional Period"). Thereafter, a fixed rate of 7.9% (0.02165%
corresponding Daily Periodic Rate) will apply to these balances until
paid in full. If at any time during the Promotional Period we do not
receive at least the Minimum Payment Due, you exceed your Credit Limit,
or you close your account, your Promotional Rate will terminate and
thereafter, any remaining unpaid balances will accrue interest at your
standard contract Purchase Rate. Please note that, unless you are a
Financial Rewards member, you will not earn Rewards credit, miles,
points toward free travel or merchandise, nor will you qualify for
charitable donations from the use of these checks as stated in your
Cardholder Agreement.

The Cash Advance Fee is 4% with a $5 minimum and $50 maximum per
transfer or check used. This fee will post to your account as a cash
advance fee and receive a cash advance rate. </i>

[akaivyleaf]

He posted his own answer:
The Cash Advance Fee is 4% with a $5 minimum and $50 maximum per
transfer or check used. This fee will post to your account as a cash
advance fee and receive a cash advance rate.

He doesn't stand a chance with them to fight it. He's lucky he only used one check, they usually send 3

[DivaJen]

But what about this language?

Originally Posted by jeffrey

The Annual Percentage Rate for Balance Transfers made prior to August 31, 2005 and for balances created using the enclosed promotional
convenience checks, is a fixed rate of 0%

Reading that, it sounds like if you use one of the checks they enclosed to transfer a balance from another CC, then the rate is 0%.

[akaivyleaf]

Thats why you have to read every word in the enclosed fine print. There probably was an asterisk (*) somewhere in the sentence. Because, true enough, at the very end it said that using a check would incur the 4% charge.

[jmjj215]

"You play with snakes, you get bitten." - Dave Ramsey

[pennywise]

I hAve always called on these kinds of deals to make sure I understand. I always ask if there are any fees associated and then I am told of the fee and cautioned not to go over. This is not a screwing, this was buyer beware! Sorry, transfer it with your next offer but make sure there are NO transfer fees, these to exist.

[Snoopy2645]

Yes you must be careful I would never go up to my limit on a cc because of all these charges I have actually never even been close to my limit on any cc but you must beware & yes sometimes thier are transfer fees!!

[DivaJen]

So how, then, would anyone go about getting the balance traansfer rate of 0% with this offer? Perhaps the person who wrote to Jeffrey needs to ask that of B of A and get something official explaining just how to go about obtaining that rate.

[34saving]

Presumedly he would have gotten the advertised rate if he had transferred $3400 instead of $3500 because the $3500 + the unknown fee put him over his credit limit and violated the terms of the offer.

[akaivyleaf]

He should have factored in the 4% charge- which is a one time charge per check used. By the way, this is also printed on the face of the check-so there was another opportunity to read this. Therefore if he had transferred 3350 + the resultant 4% (134.00) for a total 3484.00 He would have been under his limit and that would have left him with 150.00 on the other card. I'm sure the 134.00 charge is less than the interest on his high interest card. Then he should have turned around and written a check from his CHECKING ACCOUNT for the 150.00 and been through with the high interest card, and to go one step further should leave that high interest card OPEN as it is the one with the credit payment history on it, but what do you wanna bet, he's considering closing it.

The key thing EVERYBODY has to remember, is that banks are businesses and they are out to make money. Bottom line, they will make money at every opportunity from the consumer. "Free" Checking accounts are just teasers to get us to use other services where fees are imposed from us. Every credit card company offering 0% balance transfers is charging a fee, or recouping their "perceived loss" some way from the consumer. Either the 0% is for a very limited time, or more often than not, there is a fee, such as this, tacked in the fine print somewhere. I'm sure we all know by now not to charge anything on this 0% card, under no circumstances as the rate for new purchases is at the regular interest rate.

The fact that this guy copied the fine print for Jeffrey to see, indicates he didn't read it.

[mbhunter]

The key thing EVERYBODY has to remember, is that banks are businesses and they are out to make money. Bottom line, they will make money at every opportunity from the consumer.

Yes. Anything that is advertised by pretty much any company makes money for them. You don't see CC companies mailing out offers like this:

"Sign up for our card, use it, pay off your balance in full each month, and pay NO INTEREST! EVER!!"

This is the only way (IMO) to use a CC, but that's certainly not what you're encouraged to do!

At least the rate wasn't too high -- it probably could have been a lot worse than 7.9%.

[DivaJen]

Out of curiosity, I read the fine print that came with some convenience checks we recently received. (MBNA, not BofA)

Ours says the following:

Important Reminder: The transaction fee for credit card access checks (Check Cash Advances), including the enclosed checks, is 3% of each transaction (Min. $10, Max $75).

That language is pretty clear that there is a charge for using the checks. It's clearer than the language quoted in the original post, unless he left out part of it or edited it somehow.

[Bluezy]

Of course the CC companies have to charge that per check charge on the balance transfers. That is for those of us who pay off the balance before the end of the promotional offer.

There is no such thing a 0%, in reality. Just a cheaper rate.

[dealsaver]

Originally Posted by jmjj215

"You play with snakes, you get bitten." - Dave Ramsey

Or you can make a tasty snack out of them if you know how.

Reading the T&C's is essential for all your credit cards. Problem is that almost no one does.

[Luv2shop]

Always read fine print and never max out your limit!

[brandondrury]

You did get screwed.

Now you have a few options.
A) You can call lawyers and spend hours of your time fighting a mega corporate giant over a few interest perecentage points.

or

B) You can focus on totally elimating the problem that started this whole mess in the first place. In other words, You can spend your time working on ways to make yourself more money or at least educating yourself on spending less.

I know what I would do.

Brandon

[StevenM]

I went over the limit by $1.08 on a $7,000 limit card and they raised the rate to 27%!! Of course I instantly transfered the balance to another card with a 0% transfer rate. I informed the bank I was going to do this and they would lose all the business from this account. They seemed not to care at all. Notice how, in the old days, they would just decline the charge. Now they look at minor limit infractions as an opportunity to completely soak the creditor with extra interest and fees. One of my collegues had a similar problem w/ BofA on a card used mostly in his business for momentary cashflow. It has a $25,000 limit and they raised the rate to over 40% for a minor over the limit infraction. The business runs almost $2 million a year through BofA. Obviously that's not big enough for them to care about either.

[pennywise]

I was thinking about this a little more:
1) read the fine print carefully and if you are unsure call them for verification; ask if there is a transfer fee, what is your credit balance (always go $100) below the amount.
2) Keep a copy of the offer
3) post on your calendar payments 3 weeks ahead of the due date to ensure timely posting to the account

This is what I just did because I got an offer of 0% with no transfer fee for 6 mos. I put the money in a 4 month CD with enough in a new checking account to mail in the minimum payments. I called them to ask what the minimum payment was and calculated it until the payoff. I will make $140 on this sweet deal. Be wise, Be frugal, Be careful.