Big banks get desperate on credit cards

So that big Credit CARD Act that’s due to hit financial institutions next year? Big banks are scrambling to set up more fees and more interest rate hikes to get your money before the act goes into affect.

Bank of America is testing an annual fee on 1% of their cardholders (that’s 800,000 people, all together).

“We’re testing this to see what the feedback is,” said Bank of America spokesperson Betty Reiss. “In terms of any plans going forward, we haven’t made any decisions yet.”

Here’s a clue, Betty: feedback is going to be negative.

Lucky for them, BoA has chosen not to raise their card rates, but an annual fee means if you’re holding a Bank of America card, you could be paying more.

Meanwhile, Wells Fargo is going to raise rates on its card-holding customers, says the South Florida Business Journal, by up to 3%. The new ouch-worthy rate will affect “most” of Wells Fargo’s credit card customers, whatever that means. “Most” usually means “more than half,” so it’s going to hurt a lot of people.

Credit unions share what banks don’t

A brief story to highlight what the credit union difference can really mean.

I found a credit union in Wisconsin, Kohler Credit Union, that offers what they call “bunny slippers services” – essentially, convenient online banking services much like we offer through A1@home. Except they built an entire web site for Frank and Eddy, their bunny slipper mascots. To promote the service, Kohler gives out bunny slipper window clings and if you’re caught with one on your car, they give you cash. Cool idea, right?

On a whim, I ordered a few of the window clings for a few of us around the office. Not that a Kohler representative is going to be touring around Jackson looking for bunny slippers on someone’s car. But it’s a neat idea, and we wanted to have some fun.

I got an e-mail from Kohler’s marketing coordinator thanking me for ordering the window clings, and we had a bit of fun talking about it.

What bank would do that?

In the credit union world, we tend to share and exchange ideas instead of keeping everything secretive. It’s a testament to the cooperative nature of our business. Because we work at service above everything else, we’re not so preoccupied with making the big money banks do.

That’s the credit union difference.

Forbes says credit unions beat banks for students

We think credit unions rock. But don’t take our word for it.

Forbes reports that credit unions make all kinds of sense for students heading off to college:

There are about 600 credit unions at either educational or health institutions, according to the Credit Union National Association. At Princeton University, the Princeton Federal Credit Union offers students a checking account with no minimum balances, no monthly service charge and free checks. Try getting that from a for-profit bank…In addition to generally lower costs, university credit unions often cater specifically to student customers. Joyce Banish, vice president of university and community public relations at Michigan State University Federal Credit Union, says the coop aims to help students build a strong credit record.

Because of our cooperative nature and not-for-profit structure, credit unions have the flexibility to offer students great deals on auto loans, credit cards, and checking accounts.

And unlike banks, credit unions are looking to prey upon college students just to earn a few new credit card accounts.

Exposed: American Express raises fees

One of our employees here at the credit union received this letter from American Express informing them that – guess what? – AmEx is raising rates and fees.

Big surprise, right? We’ve seen this before.

AmEx calls it a “price change notification,” which translates as “you’re going to pay more to use an American Express card.” For example, our American 1 employee will pay prime rate plus 21.99% APR on any cash advances, which – as of today – equals 25.24%. Here at American 1, our cash advance rate is the same as our everyday Visa rate.

This letter is another example of big bank credit card companies raising their fees and interest rates to bail themselves out of the mess they got themselves into. And you pay the price for their mistakes.

For more information on big bank credit cards, visit our Top Secret Visa site.

Big banks raise credit card fees ahead of law

Big banks are trying to beat the new Credit Card Accountability, Responsibility and Disclosure Act, which means more bad news for big bank credit card holders, according to the Washington Post:

Chase, for instance, will raise the minimum payment required of some of its customers from 2 percent to 5 percent of the statement balance starting in August. Chase and Discover have increased the maximum fee charged for transferring a balance to the card to 5 percent of the amount, up from 3 and 4 percent, respectively. Bank of America last month raised the transaction fee for balance transfers and cash advances from 3 to 4 percent. Card issuers including Bank of America and Citi also continue to cut limits and hike up rates, which they have been doing with more frequency since January.

Banks blame everything from decreasing credit scores to the “additional increases in the cost of credit.”

Some in Congress are fighting the rate and fee hikes, so stay tuned.

…and just a note, American 1 doesn’t charge for balance transfers.

NYT: Credit Unions less likely to charge extra credit card fees

Wondering how the Credit Card Accountability, Responsibility and Disclosure Act – signed into law last month – will affect your American 1 Visa card?

Hardly at all.

That’s in line with what the New York Times found in its own study. The newspaper found that the outrageous fees banks charge on their credit cards, the same fees that the new act combats, aren’t an issue with credit union-issued credit cards:

Credit union cards demonstrate that punishing fees are not an essential ingredient of profitable lending. This should help assuage fears that the credit card act will bring disaster for credit cards. Rather, it should nudge them toward the gentler credit union model that many Americans already enjoy.

As we update our disclosures and Visa card brochures, we’ve already noticed that little will have to be changed on American 1’s end. That’s good for us and good for you, and that’s just the way we like it.

Head to our Operation: Your Best Interest site to learn more about deceptive big bank credit card practices.

Exposed: Bank of America’s fee increase letter

Here it is: an official letter from Bank of America spelling out all the bad news.

For one, they’re raising their fees in several areas. Two, they’re expanding their definition of the “Foreign Transaction.” And three, they’re eliminating a credit card rewards program for average cardholders.

Talk about a bummer. You can download the entire letter here, but we’re going to go into more detail below.

Let’s start from the top: Bank of America is raising fees on this entire list of card features. And no matter what the fee ends up, the minimum you’ll pay on each is $10. Do all seven? That’s at least $70 extra on your bill. Who can afford that?

The thing is, American 1 doesn’t charge a fee on any of those listed items. None.

As you can see above, BoA is expanding their definition of a “Foreign Transaction” so they can charge you their 3 percent fee plus any other fee that applies. That fee is triple what American 1 charges.

Finally, Bank of America is cancelling their Basic Air Rewards for everyday cardholders.

After doing some digging, we found out that Basic Air Rewards are still available – but only to Visa Signature and World MasterCard accounts. If you’re a basic BoA cardholder, you’re stuck with FlexAir Rewards.

American 1 does it differently: our ScoreCard rewards points are available to everyone, no matter what card you have.

This letter from Bank of America just shows why having one of their cards in your wallet can cost you. Find out more at our Top Secret Visa site, and think about transferring your BoA credit card balance to an American 1 Visa.

Bank of American hikes rates, picks your pocket

Check out this report from CBS: customers who follow the rules still get their credit card interest rate jacked up.

The Detroit Free Press reported on this about a month ago. So did MSN Money.

Because of a tough economic environment that they themselves helped create, big banks are taking it out on their customers with higher interest rates and lower credit limits.

We think that amounts to picking your pocket. Even if you pay your bills on time, and you carry a balance on your big bank credit card, you could still get pinched.

American 1 wants to help. That’s why we launched TopSecretVisa.com a year ago. We’ve updated the site with more examples and more articles that can help you learn why you’re being picked on by big banks.

We don’t treat our members that way. If you’re tired of the abuse, you should think about switching today.

Wells Fargo: ‘Feel sorry for us, even with bailout’

Don’t you feel sorry for all the banks getting government bailout money?

If you’re Wells Fargo, you want all the sympathy you can get. Especially after a public outcry made you cancel a Las Vegas shin-dig you had planned to celebrate your mortgage officers.

This is the same Wells Fargo, let’s not forget, that held out its hand to the tune of $25 billion worth of TARP funds. What’s a Vegas trip when you have $25 billion from taxpayers? Or a purchase of a major financial corporation? Or a New-York-based lender takeover? Or a $2.5 billion loss in the fourth quarter of 2008?

Wait, who do we feel sorry for?

Jon Carroll at the San Francisco Chronicle thinks maybe we should feel sympathy for Wells Fargo customers:

Were any actual customers helped? No, Wells Fargo does not hold “recognition events” for its customers, the people who actually pay the interest and, oh yes, the taxes that went into the bailout. Sometimes the customers get a free candy cane, though, and who doesn’t like candy?

At least candy is cheaper than financial mergers, sub-prime loans, and a lavish Las Vegas trip for mortgage officers, right?

So let’s all shed a tear for Wells Fargo cancelling its employee pat-on-the-back party – especially in these troubled times when bankers need all the Vegas sunshine they can get.

Three days late on your Visa? BoA jacks rate up to 30%

Talk about the punishment not fitting the crime.

The Consumerist tells the story of some poor chap who was one and three days late on his Bank of America Visa payment. He’s a good customer, has a mortgage with the giant bank, and has a great credit score. His punishment? An interest rate of almost 30%. This is a common practice with big banks, as we’ve outlined on our Top Secret Visa web site.

The guy’s brother tells it like it is:

Bottom line: Don’t take those warm and fuzzy bank commercials—where they show the loving banker taking care of their customers—seriously. The bank doesn’t care about the customer.