This just in from the “let no good deed go unpunished” department: Bank of America, a recipient of tens of billions of dollars of federal (taxpayer) bailout money, has decided in their erudite wisdom to start charging its best customers fees for their credit cards. This means that if you have good credit and pay off your credit card every month, our nation’s largest bank may assess you an annual fee of $29 to $99 to use their cards.
According to columnist Mike Morin and various news sources, Bank of America is experimenting with this fee to help offset costs as well as to test customer reaction. Apparently, the bank doesn’t realize just how angry many people are that they have benefited from government assistance which also paved the way for them to purchase Merrill-Lynch, one of the most extensive financial management firms in the world.
To defend itself, Bank of America is pointing to the practice of Citibank, one of its chief competitors, who is now charging credit card fees to their best customers. Citibank was by far the largest beneficiary of taxpayer largess, receiving more than $300 billion in funding last year.
Customers have a choice when they receive notification that their credit card issuer will be charging fees. By law, you must be notified in advance of any changes to your credit card agreement, including lending terms and fees. With such notification you can choose to 1) keep your card and pay the fees or 2) cancel your credit card.
Of course, if you choose the latter, your credit score will take a hit because one of the five components of determining your credit score is your credit history. A closed account will lower your score.
Still, expect that many consumers will tell Bank of America “enough” and order their accounts closed. Though a hit to a credit score can be painful, it is only a temporary setback, one that many people with good credit will likely decide is one worth taking.
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