Get this!! Bank of America

[spooby72]

Wife and I opened a bank of america credit card account in the early part of March of this year. We took a cash advance of $4,250 to pay bills and catch up and transfered $4,250 to another card. Our first payment was due in April of $151.48 which we turned around and paid. The second payment in May was due and we paid $175.00. June's payment comes and its $393.00, interest jumped to 29.74% and over-the-limit fees were charged.

We made our payments for the minimum they required the past two months. Bank of America purposely did not ask enough for their minimum payment to cover the next months accrued interest to keep us under our credit line. Once slightly over the credit limit, they charged us the over the credit line penalties and since we were over our credit limit and receiving penalties, they raised our APR to almost 30%...this seems totally manufactured by Bank of America.

Now....its almost been 3 months since the new account and the cash advance, we only paid 2 payments but now the minimum payment has tripled and we can't afford to pay. I wanted to pay this for atleast 3-4 months to show good faith but with their credit tactics...I can't. I am filing chapter 7 and am planning on filing by July 15th....
Should I pony up the $400 to make a 3rd payment or wait and see if I am challenged to an Adversary Proceeding?

[cloudship]

I don't have any advice, but I can say that this is what they do with their credit cards too. And they refuse to do ANYTHING until you give them a huge chunk of money up front. It is basically a ploy to get you into payment plans that you have to pay extra for.

[MichelleLeigh]

I read recently that Bank of America and Citibank are raising their monthly principle payments from 2% to 4% which would at least double your monthly payments. I'm going through the same thing!

[brokemama]

I had the same thing happen to me. one of my cc, I had since 1994 and had always paid and they still increased the rate to 28.9% when It reached close to maximum. Even after I called to see if they would lower the rate, very rudely I was told no, and "if I didn't like it then file bankruptcy or get into credit counseling". you have to realize, cc companies are not you friends, they give people credit, when you usually cant pay it back.

[Minnymouth]

Welcome to the "snowball effect" of the credit card companies.

Once you reach the limit on your credit card, go over a $1.00 and every card you own the interest rate will jump to 27.9 %. Doesn't make any difference if you have a card that you have never been late on. Its in the "fine print" - and is now commonly done. If the cc company checks with the credit bureau and you have a "late payment" on ANYTHING - they will and do raise your interest rate - thus raising your balance and doubling your monthly payments. Also cc companies are demanding 4% being paid on account now instead of 2% of the balance. If all of this is not paid on time - your bill can triple in no time flat.............BEWARE.

This is how most cc companies make big bucks off people using their cards. Late fees, high interest rates, etc can really add up fast, especially if you have 3 or 4 cards doing this.

After BK try to stay to only one or two cc cards if possible and pay balance off monthly if you can. If not be sure payments are on time, otherwise it will start all over again.

Since you did a balance transfer from one account to pay another account I don't think you'll have any problems with it in BK. Now if you were out "buying" stuff, you may end up having to pay the transfer back.

Good Luck, Keep us posted

Minny

[hhou812hh]

New OCC rules

Below is an article I read several months ago in bsnss-week magazine. They haven't raised my monthly payments yet, but chase/bnk1 will start by the end of the year(at least that's what they said) and I think all banks are going to wait until after the Oct. 17 2005 deadline to start raising it on everyone since our options will now be limited with the bk changes.

Personally I think that between the below news and the new bk laws the banks will be the real losers from now on. They made their record profits by making loans to all regardless of their ability to pay and no one will ever borrow(unsecured money) from them again with all these consequences. Just my 2 cents.




BW Article:
Credit-card rules that raise minimum monthly payments could hurt banks and debt-burdened consumers alike

Like a lot of Americans, Robert and Jill Proctor of Kansas City, Kan., are getting hammered by credit-card debt. When Robert lost his job two years ago, the thirtysomething couple ran up $35,000 on 10 different cards just to pay everyday expenses like groceries and gas. Even after Robert found work last year as a country club manager, their combined income just covers monthly outlays for two cars, a mortgage, and credit-card bills on top of household expenses. Says Robert, who makes minimum payments on the cards with the biggest balances as he struggles to pay off the smaller ones first: "If they tack on more charges, we'll be stuck." That's just what's about to happen. Because of a crackdown by the Office of the Comptroller of the Currency (OCC), most banks and credit-card issuers will ratchet up required minimum monthly payments over the next 12 months or so. In the future, the payments must cover all fees and interest and pay down at least some of the outstanding borrowing.

MINIMUM PAYMENTS. The goal is to help people pay bills faster and slash the interest due. Monthly payments on many cards will double, to about 4% of balances, say card experts. Barbara J. Grunkemeyer, deputy controller for credit risk for the OCC in Washington, explains: "We were concerned that people were making smaller and smaller payments, but not making any headway" in paying off loans. The new rules will hit consumers hard, especially on top of higher energy prices, rising interest rates, and record levels of overall household debt, now $10 trillion, or 87% of gross domestic product. American households, on average, possess nearly 8 major bank cards -- or 17, including store and gas cards. Either by choice or necessity, some 19 million households -- about 1 in 6 -- now make minimum payments on their cards, according to card tracking service CardWeb.com.

"The main concern is that there could be an increase in defaults and personal bankruptcies," says Michelle Grabow, credit-card research manager at Informa Research Services. That in turn would hit banks' bottom lines as they have to charge off more loan losses. Worse, the shrinking of families' disposable incomes as they step up repayments could put a crimp in consumer spending. The massive indebtedness of Americans is a "huge macro risk factor for the U.S. economy," warns Stephen S. Roach, Morgan Stanley's chief economist. "The debt bomb is ticking."

ON THE EDGE. Banks were so worried about the potential impact on their businesses that they persuaded the OCC to give them a long transition period before applying the rules, originally published back in January, 2003. Their fears seem justified. Bank of America (BAC ), one of the first issuers to raise minimums, in the second quarter of 2004, saw net charge-offs for bad loans soar 63%, to $691 million, though by the end of that year only $40 million was related to the increased minimums. Bank of America also increased loan-loss reserves by 21.1%, to $170 million. That surprised some analysts because the Charlotte (N.C.) bank had told them that hikes in payments amounted to a modest $10 to $20 per month for most cardholders. Says David A. Hendler, a bank analyst with researcher CreditSights: "It seems that even a small monthly increase in minimum payments can cause some borrowers to tip into default." Minimal impact? So far, BofA, Citigroup, Discover Card, and MBNA -- which together issue some 275 million of the 658 million general purpose cards in circulation -- are among those with timetables for raising their minimums. JPMorgan Chase, with roughly 96 million cards, will "experiment" with higher minimums later this year on a "small portion" of its customers, according to Ray Fischer, chief financial officer of JPMorgan Chase Card Services.

STEPPED-UP PRESSURE. Fischer says 90% of the bank's customers make more than the minimum payments. The New York bank is not sure just what the financial impact will be. Still, it reported in a recent filing that it, too, is bracing for more delinquencies and charge-offs. Some issuers continue to insist that the impact will be small. At Wilmington (Del.)-based MBNA, new cardholders will have to pay higher minimums starting in July. Existing customers will receive notices in September and see changes soon after. They'll have to pay interest and late fees, if they have them, plus 1% of the remaining balance. Currently, MBNA customers have to pay interest and fees plus $15, or 2.25% of new balances, whichever is less. MBNA spokesman James Donahue says the change "won't have a practical impact" since most cardholders make the minimums. That doesn't mean MBNA and others won't be stung by the extra vigilance of the OCC. It has also warned banks that they must consider substantially reducing interest rates -- which quickly jump from introductory offers of 0% to an average of 16%, according to CardWeb.com -- or eliminating fees so that more of cardholders' monthly payments go to cutting their balances. Banks haven't been "overly keen about the prospect, but we needed to keep the pressure on," says the OCC's Grunkemeyer.

TOOTHLESS IN CALIFORNIA. No wonder. Last year, credit-card issuers reported record profits of $30 billion -- much of it earned on liberal lending policies and punishing fees that often exacerbate the financial woes of cardholders who have gotten in over their heads. Borrowers who make a late payment -- whether it's for the phone bill, a credit card, or a house payment -- often are charged punitive rates averaging 29% on all their cards. These on-the-edge borrowers are the most profitable part of any bank's card operations, as long as they don't default. To make matters worse for banks, consumer groups and legislators are pressing them hard to disclose more on monthly card statements about minimums and fees. Senator Chris Dodd (D-Conn.) reintroduced the Credit Card Accountability Responsibility & Disclosure Act in March, after a stalemate in 2004. The bill seeks, in part, to force credit-card companies to say how long it would take to pay off outstanding balances if customers just pay minimums, and how much interest they would pay over the life of the loan. California enacted a similar law three years ago, but "it's not being enforced," laments Tom Dresslar, spokesman for State Attorney General Bill Lockyer, because the banks argue that federal rules preempt the state law.

180-DAY WINDOW. If customers saw exactly how much credit was costing, they might be more inclined to pay higher monthly amounts voluntarily. Consider a customer who has a $10,000 balance with a 16% interest rate, and who makes a 2% minimum monthly payment. It will take more than 40 years to pay off the balance and cost $19,329 in interest. With a 4% minimum, the loan is paid in about 14 years, and interest costs are $4,931. The full impact of the OCC rules depends on whether customers can pay the new minimums. What is certain is that once banks implement the changes, they have 180 days to charge off any bad loans that result. "The hope is that there'll be only a temporary increase as you push those customers over the edge and they default," says David L. Fanger, a banking and finance analyst with Moody's Investors Service. If so, that would be a big relief for banks, strapped American consumers, and the U.S. economy.

[Minnymouth]

"VERY INTERESTING"

Sure glad I filed last year. Wouldn't want to be a part of the "new mess"..........was hard enough as it was.

Minny

[3131tj]

B of A buying MBNA

When I heard this the other day I laughed! MBNA (i have 2 cards with them) are part of the reason I am forced into BK, too. These ridiculous increses when I have a 705 credit score and a perfect payment history with them (one of the cards goes back to 1992!). Anyway, I thought - why would BoA want to end up with all these poeple who are near default on their cards? I am not sure when the "buy out" takes place, but it will be fun to watch from my BK chair - this thread has given me the firm resolve to do it. I have been wishy-washy for a while (good score, no late payments) but since BoA will OWN me soon, too - well, here I go.

hmmm...I somehow didn't make that MBNA payment that was due today and ya know what? I don't care! Oh, did I mention? 6000 people are slated to lose their jobs...where IS that other planet we can move to.....? credit thieves

[hhou812hh]

6000 more bk's. Better hurry up before Oct 17th...

[stevie2012]

Those *******s over at MBNA did the same shit to me. Nearly put me into bankruptcy again. They made it near impossible for me to pay off my debt to them.

I get this bill that my interest rate doubled, I contacted them to find out why. They stated "I am considered a high risk due to my outstanding unsecured debt." I explained I never had a late payment, my FICO score is 780, yadda yadda...it didn't matter.

I was so pissed they still jacked my interest rate up. Every penny I made that could be spared, I paid it on my MBNA card and 1.5 years later, I paid it off. I promptly cancelled the card the day I paid it off, which incidentally was two weeks ago.

Funny how they kiss your ass when you owe nothing.

Sadder part is this...my favorite credit card (through my mortage company) is now being serviced by MBNA. I closed that card too. MBNA gets none of my business. Nasty tactics.

MBNA is the worst company I have had to deal with...EVER.

[tinroofrusted]

Funny how they put this new law into place, and then change the bankruptcy laws too.... How convenient for the credit companies!

[Minnymouth]

Had the same problem with Citibank raising rates on cards I had had for 20 years at 2.9% interest. Raised it to 27.9% because of a late payment to another account.
Like others I called them - they said "sorry - policy"....DUH.
They also owned 3 other cards that I had had for years (payments were always on time and overpayments), they also raised the rates on them!!!
I just smiled -said -' MY POLICY -"EAT IT ALL - BANKRUPTCY"!!!
That was a year ago - I can live with bankruptcy - but I can't live if I'm struggling and still can't make ends meet because a credit card company decides they want to "raise their rates"................and double their payments....
I've had credit cards (personal and business) for 30 years. No problems with the cc companis till the last 5-6
years. Am a great "90 days same as cash" person.
I've paid out more in interest than they ever lost in me claiming bankruptcy. So I really don't feel too bad about filing.
I was forced into BK by medical bills and caring for a elderly parent at home for 4 years. (Financially, a bad decision on my part 7 years ago). Fought for 3 years trying to pay everything afterwards.
Bankruptcy was probably the best decision I ever made in my life - and the most difficult to deal with mentally and emotionally. I was raised "to pay your debts".
I don't feel sorry for the cc companies - their going to loose in the long run.........give them enough rope - they'll hang theirselves!!!
Banks are a business - they only grow and get bigger - if the public INVEST in them................
When John Q Public used cash - the banks suffer!!!
Sorry about their luck,



Minny

[hhou812hh]

Actually the cr card companies DON'T want this new law to go into affect. They WANT us to borrow 20k and give them back $65.00 a month for an entire century. That's how they make record profits! I think they are waiting to raise the minimums until after the bk change so when people get shocked at the new minimums that they have to pay they will have a tough time going through ch7.

[Minnymouth]

The cc companies know that after October they will at least be getting "part of their money" back in bankruptcy cases. They know they won't be forced to "write it off" if they fight it.
It will be very hard for people to file a Chapter 7 after October. Most will be forced into Chapter 13.....
CC companies know this and feel SAFE in their actions.
Their out to 'MAKE THAT MONEY"........

Minny

[hhou812hh]

In the long run when someone runs up a card 10k and they get their 1st bill of $400 per month(as required by the OCC regulations), instead of a smaller $100 per month bill they pay now, they won't charge anymore and since the demand will be lower for cards, so will the interest rates (Hence bank profits). This is bad news for banks since they want us to charge up a storm to collect years of 20% to 29%.

The next few months to a year will be a difficult transition for debtors who don't file a ch7 before the change. If anyone is burdoned now they should file NOW if they can! If you need to file a ch13, today would be better then the new plan since you will have to pay into a 5 yr plan (instead of 3) and no more "cramdown".

I happen to see a link between the present liberal bk system and large bank profits. The last thing a bank wants is for consumers to be better informed about just how their scam really works! If they really want folks to stay out of trouble, they would'nt grant large lines of credit to people that can't pay it back. The bank lobby just shot their own foot for their long term profits.