Why I’m canceling my Bank of America credit card

Going through a pile of mail last week I came across two items related to Bank of America.

First, the AARP newsletter had a short article about a guy collecting unemployment in (I think) New Mexico. The state issues the monthly amount via B of A debit card. When this fellow had questions, he was charged for the phone call to the bank; when he makes more than one withdrawal in a day he is charged a service fee. The amounts are small––but then, so are unemployment benefits. And whatever the amount, the fact that the bank levies these charges on unemployed people (who also have to pay taxes on their benefits) is appalling. The state also should take action, should have negotiated a different setup, but it is the Bank of America that is profiting from people for whom every dollar is precious.

Second, I received a tender missive from Bank of America, announcing that the interest rates were being raised. “The standard rate for new and outstanding balance transfers is increasing and will use the Variable Rate formula with a margin of 11.72 points” yielding an annual percentage rate (as of Feb. 2009) of 15.72%. New and outstanding purchase balances will have the same rate, and the rate for cash advances will go to 25.74%.

They calculate this rate by using the highest US Prime Rate over the preceding 3 months, as published in the Money Rates section of the Wall Street Journal. Can anyone say, “The odds always favor the house”?

Yes, banks perform a service. They must make a profit. But this is far beyond a fair profit. Banks now levy multiple charges, at least one on every stage of a transaction. Businesses pay a percentage of each transaction for the credit card processing. Every credit card user pays interest on amounts owed, sometimes even when paying the balance off in full each month. There are big late fees. Some banks (Chase, for one) have started charging a monthly maintenance fee for “processing payment and statements” [Wisebread blog].

Our local credit union issues us a VISA debit card, with no fees unless we get cash advances from an unaffiliated ATM. The credit union covers overdrafts (checks) for us by charging a line of credit so that we never will pay a bounced check fee. The credit union was not part of this reckless orgy of greed on the part of financial institutions, which has caused our economic crisis, and for which we ordinary folk are paying at every turn: taxpayer bailouts to the institutions who profited, massive unemployment, foreclosures, blighted lives as families become homeless and food pantries empty their shelves to gobsmacked crowds of the nouveau poor.

Screw the banks. Use cash, join your local credit union (credit union membership is now usually based on locality; you don’t need to work for a school, a certain corporation, or belong to a certain union, to join). And if you close an account or credit card, be sure to let the bank know exactly why. We are already paying plenty for their dishonesty and incompetence.

B of A.jpg

“Bank of America helps build strong communities by creating opportunities for people — including customers, shareholders and associates — to fulfill their dreams.”
Kenneth D. Lewis
Chairman, CEO and President 1

1 thought on “Why I’m canceling my Bank of America credit card

  1. Make an informed choice to cancel you credit card. Understand that your credit SCORE will be affected by a decrease in “available credit”. Cancelling the card before you replace it with a lower interest-rate bearing card makes you look less credit-worthy.

    Debit cards are not credit cards and they are not taken into consideration when you apply for credit — as when you buy furniture, cars, or homes.

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