Why did Bank of America charge me 32.2 % interest?

Question

I was late on a credit card payment to Bank of America and went over the credit limit. The next months billing statement charged me 32.2 % interest. I called to see if they would lower it, they said they would charge me 32.2 % for 6 months. I paid off the bill and they asked why? I said because you charged me 32.2 %. Are they morons?

Answer 1

Usually, when you miss a payment or go over your credit limit, the interest that you are charged goes up automatically,

Answer 2

You are gonna hate my answer but here is goes:

If you look at the terms and conditions of the credit card agreement that Bank of America provided you upon opening the credit card account AND amended peridiocally by including the "amended terms" in your billing statement, you will find the answer.

In the terms and conditions of the credit card agreement, it clearly states that should the cardholder default on his credit card agreement TWICE within a 12-month billing period, that Bank of America (BOA) may charge you a default rate for six months.

The terms and conditions further explain that trigger events for the default rate include, but are not limited to, the following:

(1) failing to make the minimum payment as required.
(2) failing to pay the minimum payment by the payment due date per the billing statement
(3) exceeding your established credit limit.

Let's see. Per your question above, you made a late payment AND exceeded your credit limit within a 12 month billing period, so per the credit agreement, you had two trigger events whereby you defaulted on the credit card agreement. As such, BOA may charge you the default rate which was about 22.9% ABOVE prime. Currently, prime rate is about 8.750%, so the grand total interest is about 32.2% interest.

No, BOA are not morons, they just penalize you when you fail to comply with the terms and conditions of the credit card agreement. I am shocked that BOA would inquire why you are paying your account in full. I would NOT, however, be surprised if BOA asked you why would want to close your credit card account.

If you don't want to pay, then do not play. If you don't have time to read the "fine print", then you will have to pay with "fresh mint".

Answer 3

Unfortunately for you, not only is Bank of America within their right to charge you that for being late (that rate would be listed in the contract you have with them), any other credit card company you have a card with can see that late payment on your credit report and raise your interest rates on their cards as well.

Answer 4

You were hit with the bank's default rate - the highest rate they charge. It was likely due to you're going over the credit limit, but bank's also use what is called a "universal default clause" which does the same thing if the bank views your overall credit situation in a bad light.

Answer 5

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!BANK OF AMERICA AND ALL CREDIT CARD COMPANIES HAVE THE RIGHT TO CHANGER YOUR INITIAL AGGREMENT IF YOU ARE LATE OR DEFAULT ON A PAYMENT OR EVEN IF YOU OCCUR LARGE BALANCES ON YOUR OTHER CREDIT CARDS!!!!!

Yes it is true that Bank of America could have had an initial interest rate of 19.20% with you...but because of a simple late they increased that interest rate....it's a secrete of the credit card industry...watch this documentary from PBS's Frontline a TV new mag that has high acclaim:

http://www.pbs.org/wgbh/pages/frontline/shows/credit/view/

watch the fourth clip this is about what you are complaining about....it explains the story of man who had a credit card for more the 5 yrs and never missed a payment...had a good int rate but because of ONE late payment lost his good interest rate

TRULY AN EYE OPENING SERIES

any more info please contact me [e-mail]

i'd be glad to explain more

SOLUTION:

JUST PAYOFF YOUR DEBT AT THE END OF THE MONTH AND YOU WON'T BE AFFECTED AT ALL FROM THE CREDIT CARD...this is also explained in the documentary
;)

Answer 6

Because you were late once and went over your credit limit they were within their legal rights. The only way to get around it is to transfer the balance to a lower rate card NEVER be late again and NEVER go over your limit. Read all the fine print on your credit app

Answer 7

I guess you did not read the fine print. Most people don't, unfortunately - even though it makes for dry reading, it is important to know what they can do if you make a mistake.

Suck it up for 6 months, keep your account in good standing and then request a lower rate.

As Vadalia mentioned, you may get hit on your other cards because of this.

Answer 8

Check your other credit cards....Universal Default comes into play....screw up w/ one credit card and the others find out...they will automatically raise your interest rate (they do periodic credit checks for that very reason).

You definitely don't want to be carrying balances on any of your cards for a long while.

Answer 9

In their eyes, you have become a bad credit risk.. usually due to overlimit, missing payments, late payments, etc

I've also heard of certain CC providers upping your interest rate even if you haven't wronged them in some way, but they see you getting in deeper & deeper in debt.....

Basically the CC companies hold all the cards; that's why a lot of people suggest keeping CC usage to a minimum.

Answer 10

you are a smart man for paying that off. most people cannot pay it like that then get charged as much as a loan shark charges. Chase did that to my friend. wait six months you credit will recover that late and over the limit.