I just received letters notifying me of changing terms on two of my BofA cards. Both said the previously fixed APRs will become variable, tied to the prime rate at May 31, taken as 3.25%. The standard rate will be added. Quote:Prior to this amendment, the non-promotional APR for (Balance Transfers, Cash Advance, Purchase) balances was not a variable APR.
Example:
Current index: 3.25%
- Standard rate for BT: 6.65%. Resulting: variable APR of 9.90%
- Standard rate for CA: 21.74%. Resulting: variable APR of 24.99%
- Standard rate for purchases: 6.65%. Resulting: variable APR of 9.90%.

It looks like BofA wants to change their terms preventing a cash hemorrhage characteristic to an inflationary environment. Or they may just want to take the advantage of the historically-low prime rate and monetize from it, especially given the future changes in the credit card legislation.

If this is not just my experience, then it means don't use any BofA cards if you don't pay it in full, beyond their promo period!

g10ny said:It looks like BofA wants to change their terms preventing a cash hemorrhage characteristic to an inflationary environment. Or they may just want to take the advantage of the historically-low prime rate and monetize from it, especially given the future changes in the credit card legislation.

I think they just want to make more money.

staci86 said:BoA changed my fixed rate to a variable rate based on prime. The nominal rate was unchanged.

This is a direct response to the recent credit card legislation, given that worries of inflation are very real.
There are two main points here:
1. The shift from fixed rate to variable rate. If this will apply to all its cards (and if other issuers follow suit), it will change significantly the credit card environment.
2. BofA chose to do this when the prime rate is at its lowest point. Even if inflation does not turn into hyper-inflation, it's easy to look back and see what would have happened during the previous cycle (2001-2008) if only variable rates would have been in effect, to see what the next cycle would be for people who carry balances when prime rate increases.

yup i got it on my ML+ FIA too and a quantum bofa

I received the same note and have placed a call to not accept the changes, close the account, and pay off the balance under the original fixed rate contract. All of the folks I talked to, and I have been on the phone for an hour said that I am not able to opt out of the amendment because the variable rate is no different than the current fixed rate. I tried to indicate that it was a change in terms that will result in future increases and they indicated that I don't know that. Are they kidding! How can they change the terns of an account and not allow the account holder to not accept the changes and close the account pursuant to the current agreement. This is wrong and it seems like a real semantic difference that indicates it is an amendment and not a change in the rate.

blarp said:I received the same note and have placed a call to not accept the changes, close the account, and pay off the balance under the original fixed rate contract. All of the folks I talked to, and I have been on the phone for an hour said that I am not able to opt out of the amendment because the variable rate is no different than the current fixed rate. I tried to indicate that it was a change in terms that will result in future increases and they indicated that I don't know that. Are they kidding! How can they change the terns of an account and not allow the account holder to not accept the changes and close the account pursuant to the current agreement. This is wrong and it seems like a real semantic difference that indicates it is an amendment and not a change in the rate.Why are you even on the phone?

You need to write a letter rejecting the change

Doesn't the letter state what to do in case you reject the changes? I received the same letter a few months ago making my BOA card go from 7.9% fixed to something like 15%. It listed a number to call if you reject the changes.

I called and it took all of 1 minute to go through the automated prompts.

WalStMonky said:g10ny said:If this is not just my experience, then it means don't use any BofA cards if you don't pay it in full, beyond their promo period!

Yes, god forbid anyone should use variable rate financing for anything!
In the true FW spirit, that is.

blarp said:I received the same note and have placed a call to not accept the changes, close the account, and pay off the balance under the original fixed rate contract. All of the folks I talked to, and I have been on the phone for an hour said that I am not able to opt out of the amendment because the variable rate is no different than the current fixed rate. I tried to indicate that it was a change in terms that will result in future increases and they indicated that I don't know that. Are they kidding! How can they change the terns of an account and not allow the account holder to not accept the changes and close the account pursuant to the current agreement. This is wrong and it seems like a real semantic difference that indicates it is an amendment and not a change in the rate.

I just got that letter too. Here is what happened when I called the number on my card...

The person I talked to said it was the "risk department" that changed my interest rate to a variable rate. I don't know why that would be since I haven't been late. So they transferred me to that department... which didn't exist. I got disconnected.
So I called back...
This time it was a different person. He said that my APR can't go any higher than it is right now even though it is a variable rate. I called him out on that.
I said, where does it say that in the letter that there is a limit on my rate?
He said, it doesn't say that.
So I said, so you are telling me that I have a variable rate that will not go up? He said, you are already as high as it will go.
I said, how do I know that if it isn't in the letter? He said, because that is what I am telling you.
I said, if it doesn't say it in the letter I ain't buying it.
He said, well what do you want me to do?
I said...
CANCEL THE DAMN THING AND LEAVE MY RATE ALONE.
He said Ok.

In the letter, it specifically stated "An increase in the index means that you will pay higher periodic rate finance charges and have a higher Total Minimum Payment Due". It also says, "If the Wall Street Journal does not publish the U.S. Prime Rate, or if it changes the definition of the U.S. Prime Rate, we may, in our sole discretion, substitute another index".
SCREW ALL THAT!!!

I HATE BofA. Always have. My credit card account was originally with someone else but BofA purchased it.
I should have cancelled it years ago.
I have a large balance on the card and am going to pay it off ASAP so that they do not get any more interest from me.

WATCH YOUR ASSETS!!!
Run. Run Fast. Run FAR.

FuzzyWombat said:I usually don't think of carrying a balance on a credit card as an asset... but ok.

No... but they will eat away at your assets.