My aunt sent me this... it is making its way around the internet. April 8, 2009 To Whom it May Concern at Bank of America: I have been a Bank of America MasterCard holder for a long time. I have been a good customer and paid my payments consistently. I had called last week to see if I could get a rate reduction, and the lady I spoke to (I sure wish I had her name) didn’t say something nice like “I’m sorry, but that’s not possible at this time.” She said, very emphatically, “Not a chance!” I was quite at a loss for a response. And then yesterday I get a standard notice advising that my APR was increasing to a variable rate possibly triple what I have been paying. I know that the financial crunch is hitting everyone, but why beat down the good dog? I have officially rejected the increase, and will not use my card again. I will cut it up, use my tax return to pay it off ASAP, and never be a customer of yours again. It’s bad enough that my taxes already helped to “bail out” this company, but to get a double whammy by now getting to pay for YOUR loan too is entirely ridiculous. I hope every single one of your customers who gets this notice will cut up their cards, and refu se to patronize your company again. If it goes belly up, so be it. That’s what’s happening all over to the little people in this nation, while CEOs still scoot their fat bellies up to the government table and bang their forks for more. I am going to send an electronic copy of this along to everyone I know, and hope they send it to their friends and it goes on to their friends’ friends. Until the belt tightening goes on all the way to the top, and CEOs are eating Ramen noodles like the rest of us, we the people need to keep speaking out. Nevermore Yours, Pamela K Darrington Springville, UT
The only difference between these boardroom hustlers like BOA and the real mob is that the latter tells you the consequences up front.
So much for the value of the federally mandated disclosure requirements..... :lol: To the barricades! :wink:
The very fact that you think this is quite alright because they state "it could happen".....even though it is more than likely unprecedented and certainly anti-consumer speaks volumes about our differences. I'll guarantee you it is in very, very fine print somewhere and most good, timely paying clients have never experienced anything like it and you bet your ass that when BOA advertised what a great intro rate they had, etc. that they never ever said anything in their ads about reserving their right to rape the unsuspecting consumer later. In your mind it doesn't count that people are loyal and pay on time. That is a rotten way to look at business and here is the real rub: If you actually did business in the real world you would find out that if you screw your customer over not only will you never do business with that specific customer again but your reputation will be poisoned and other similar customers will shun you as well. That is how it works my friend in most B2B settings. Only when you are screwing the poor individual consumer can you get away with the screwjob and live to fight another day. And this is all related strongly to what I said earlier that these are the kinds of changes in business today that make people want to say F##K the capitalistic greedy jerks who seek to profit for themselves by saying to hell with normal business ethics and to hell with the average Joe American.
I think it quite alright because you entered into a contract with them wherein you agreed that they would have the right to raise the rate at their discretion. Presumably they did not have a gun to your head.....presumably you read the contract before you agreed to its terms and took their money. If you did, I have no sympathy. Presumably you're a big boy....if you did not, I have no sympathy because again, I assume you're a big boy and have learned to deal with the consequences of your poor decisions. Actually I do....and in the real world we actually read the contracts into which we enter and either agree to be bound by its terms or we decline and pursue a more favorable option. But in the real world, when we enter in contracts, we don't cry like women and seek government intervention when our business partner pursues a course of action for which we gave them our consent. Now, whether or not that course turns out to be a sound business decision by BofA is another question entirely.....history will be the judge. But it certainly is their right.....and yes, that is quite alright by me as it was you when you took their money. Call me what you wish, but I happen to believe that contracts between parties should have some consequence.....I shudder to imagine the world where they do not.
I hear what you are saying but when it hasn't been the practice historically and it charts a new course of doing business and that course results in exorbitant, unexpected higher costs to the consumer it is outside the lines of normal business practice and ethics. You can hang your hat on it was in the fine print but I can assure you BOA is losing a lot of credit card business over this and I guess they feel they don't need it in the future. There is also the matter of doing business with class and good faith and this kind of crap is neither. And you actually wonder why some Americans are questioning Capitalism in it's present form? My ongoing contention is that our system of Capitalism needs an injection of leaders who possess integrity and honesty instead of those who use ruthless greed as their blinding, driving force.
It may in fact turn out to be a bad business decision on the part of BofA. As I said, history will be the judge. I will however defend their right to raise prices because YOU agreed to give them that right in exchange for the use of their money......YOU gave them that right. Obviously it would be a different story if you were coerced at gunpoint, but I don't think that is the case.....you have no one to blame but yourself. Consequently, YOU have the right to not do business with Bo A and they are well aware of that also.....
BT, What do the terms "integrity" and "good faith" when it comes to doing business mean to you? Are you convinced that what BOA is doing falls under those terms?
Let me get this straight. BofA offers you a deal wherein they will let you use their money and you agree that they have the right to raise the price at their discretion. You take their money and they - as the economics of revolving credit become more difficult - raise the prices consistent with the terms of your agreement and now you are charging them with a lack of integrity and good faith? I just don't see it..... What would you do if you are in Bof A's position? It's no secret that the cost - including risk - of extending credit is going up. Shoud they not raise prices to cover the increased costs - including risk - of doing business? Should they not use the discretion - that YOU gave to them - to adjust their pricing to reflect the current economics of the credit market? Sorry boys, that makes no sense....do we somehow think it makes more sense for them to simply stop issuing credit? I just don't see it.....
What would I do? I would do what I find myself doing all the time in my business. My terms are Net 30. They have been for 30 years. For the last year my receivables have been stretching out. I have long term customers who, when we call them, tell us that they simply cannot pay the invoice in full. So I ask them to just send something in on a regular basis. On some of my recurrring contract customers I have been lowering rates to keep their business. I have been re-structuring their maintenance contracts, both the rate and the terms, because A. if I do not I will almost certainly lose their business and B. if we all come out the other end of this disaster then I hope my proactive attempts to help my customers through this will buy me their loyalty for life. Am I happy doing these things? Hell no. But it is reality, the kind of reality that these suits in the boardrooms are apparently insulated from.
Different business entirely Krebsie.....who retains the equipment in the event that your customers can't or won't pay? If they are leasing customers, do you not retain title to the equipment? In the world of unsecured revolving credit, you don't have the means of mitigating your losses.....the money is out the door and spent. No security, no collateral, no recovery, no nothing......the volatility and risk of default is much, much greater in the revolving credit business and the economics and the reality of unsecured revolving credit is something entirely different. Last year - 2008 - BofA had customers walk away with $11.4 Billion of their money extended to them by way of credit card transactions - or 6.2% of outstandings. That is net of anything they were able to recover and after delinquent accounts were called and asked to send in anything they can..... What was your loss rate? This year, delinquencies, default rates and unemployment rates are increasing, asset prices and incomes are decreasing.....phone banks around the globe are contacting deliquent accounts. Now what do you do? Insulated is a good word.....welcome to the world of unsecured, revolving credit.
BT....a 2% raise covers some extra expense even though that is not very palatable to the consumer either if there is no cause. What they are doing is doubling or tripling the credit card interest rate charged while the Feds have either lowered or kept the prime rate steady. That is highway robbery.
....even if there is no cause?! Where have you been man? Losses are a major cost of doing business in the credit world.....we are in easily the most difficult/risky/expensive environment in the credit business in my and your lifetime! Bar None.....there are no close seconds. Credit risk premiums in every organized market in the civilized world are at or near all time highs..... Not withstanding the fact that it is ridiculous to think that it prudent for businessman to think it reasonable to never increase his price, ever, no matter what, much less for you to think that it is unfair/unreasonable/lacking integrity, etc while holding your express consent for him to do so and in this environment of unprecedented credit risk and uncertainty......jeezus h man.....I don't even know what to say......it's just bizarre. A concept so far from rational I'm speechless.....there is nothing more I can say.
Here's the difference between the real business world and that of the tyrannical credit world. It took us years sometimes dealing with the Big Three to get even a 5% increase in place for our services and even then we placed the business at great risk by doing so. A 5% increase on a credit card rate of 12% amounts to a .6% raise in the rate and these jackasses are sending out letters raising the rates to 24.9%!!!!! Go ahead....defend that one as I know you will. It's ridiculous. The bottom line is that in real business with real ethics your clients will tell you to take a flying leap if you try to put the shaft to them whereas the credit lenders have the individual borrower by the friggin b*lls and they call all of the shots. It's not decent, honest or ethical and as George compares it to it's more like loan sharking than anything else.
You do have an alternative. Take the frozen rate, zero out the balance as soon as possible and then never use their service again. Prior to having my credit absolute crushed in my divorce process, I became a big fan of AMEX. It kept myself honest, and the benefits/customer service were unmatched.. Again, just from my personal experience.
Here you guys are railing on the bankers for exposing themselves to excess risk for which they were not adequately compensated and putting many of their firms in the ditch.....now, you rail on the bankers as they effort to realign the economics of a product line to more closely match returns in a credit risk environment unlike any in our lifetime.....make up your mind boys. You can't have it both ways. Which is it? Your position is beyond reason......it's clear that this President is succeeding in his populist war against the evil investing class.....well done. That is sure to prove a wise thing to do in this environment.....to the barricades! That is so naively inaccurate and ridiculously untrue that it is too funny for words......surely nobody has ever told a banker to go take a flying leap! :roll:
I doubt even businesses today have much leverage when it comes to credit and banking....and least not small businesses. For certain the individual consumer is at banking's mercy for the most part.....especially those who already have outstanding debt. And this is in spite of the TARP money doled out to the banks in the hundreds of billions.....taxpayer's money. It is appalling.
If you have a problem with the terms of the revolving credit arrangement that you agreed to, change providers.....there are thousands upon thousands of them......clearly the millions of households in the US who have no credit cards and the millions more who carry no outstanding balance would not agree with your assertion that the lenders have them by the balls. It is absurd.....if you can't use it responsibly, perhaps you should have chosen - you did choose - a credit product better suited to your needs or managed your affairs in a manner that did not require you to use somebody else's money to pay for your consumption as millions of US households manage to do.....but if you can't or choose not to manage your affairs in a such a manner and make bad choices from the multitude of credit products available to you, it's nobody's fault but your own. Don't ask the government to intervene by setting prices in a private matter between two consenting private parties - you did consent - and f**k it up for everybody else.....why do I feel like I'm talking to my 9 year old son about making good choices and logical consequences? With him it always his sisters fault, with you it's everybody else...... Thus far I've heard you ask for the government to set prices, terminate or revise contracts between two private parties - both of whom have consented to the terms in a private matter, set limits on compensation in the private sector, retroactively apply the tax code to selectively punish segments of the private sector among other brilliant, well conceived intiatives. Surely you with your vast experience in such matters and crack business acumen can see the tragic end of that story...... Your best course is to punish BofA, never do business with those shysters again. How dare they raise prices when confronted with a dramatically changed credit environment raising costs and the risk of doing business exponentially?! If enough of their cardholders feel as you do, their card business will take it in the shorts and they will be forced to change course - or not offer the product - and you will have taught them a valuable lesson.....give 'em a good dose of how you guys did it in the car business back in the day - about real business in the real world. Go get 'em gator..... :roll: