Wed 14 Oct 2009
Bank of America to experiment with annual fees
Posted by lizweston under Liz's Blog
[8] Comments
photo credit: wickedboy_007
Last week BofA promised no more rate hikes between now and February, when the bulk of the credit card reform act’s changes take effect. But now the bank reveals it plans to impose annual fees of $29 to $99 on about 1% of its credit card accounts starting in February.
We can presume that BofA is testing to the waters to see how much its customers howl. If there’s not significant pushback, expect more accounts to be slapped with the fees.
If you have good credit scores (FICOs of 740+), you have plenty of options if your bank imposes an annual fee you don’t want to pay. You can threaten to take your business elsewhere, and the threat has some weight, since other issuers would love your business. If your issuer insists on imposing the fee, you can simply close your account. As long as you keep other cards open, the hit shouldn’t be too bad. If this is your oldest or highest-limit account, you make take a larger hit on your score. But again, the more accounts you have, the less one closure is likely to matter.
If you don’t have good scores, your options are more limited. Other issuers might not be as eager for your business and your scores could take a greater hit from a closure. Paying the fee might be the better option, at least until your scores improve.
For more on recent credit card changes, visit LowCards.com page “Credit card changes by issuer and date.“
Time to switch to a credit union!!!
Doesn’t affect me in the least — I cut up every credit card I had back in January of ‘06. It took a few months of withdrawl, and re-aligning my thinking and doing a real budget instead of a haphazard one that depended on credit cards to take up the slack.
Not only are the card companies hitting cardholders with higher and new fees, the merchants are paying higher fees for accepting the damn things.
Since I have gone to cash – the real green stuff, for routine purchasing I have found budgeting is easier plus more and more merchants are offering discounts for cash. Saves me money, and saves them money in transaction fees.
Everyone is betterr off except the banks, and I really don’t care about them anyway.
I am one of the 1% of Bank of America consumers who will be affected. My credit score is above mid 700’s, I prepay my credit card expenses, and carry large balance in my checking account. I will leave Bank of America in a heartbeat if they impose these fees on me. Any bank would gladly want my business.
I’m glad it’s working for you, Joe. Credit cards can be a great convenience if used for just that–convenience. When you use them to carry balances, live beyond your means or stop up gaps in your cash flow, you’re heading for trouble.
Amen to that. Please let me know if BofA does impose this fee on you–it will be interesting to see if they go after customers who have plenty of other options.
And if you don’t already belong to one, you can find out about your options at http://www.joinacu.org.
I got their card a year ago and a letter this week letting me know I belong to the 1%. They are imposing a $49.00 annual fee on my account. I can opt out, I am still thinking about it. The interest rate is very good compared with what is out there.
B of A is doing something much more serious beginning January 1, 2010. Any one who has one of their business card accounts, and the business itself, will have given B of A the right of setoff, which means they can, without notice, take funds from a deposit account (including a joint account) to satisfy any obligation under the credit card account. This is major and should be talked about NOW! If it were me, I’d get any funds I had on deposit with B of A….out of there.