Posts Tagged 'bank of america'

Save (virtually) nothing with Bank of America’s auto loan

Susan Tompor had a great article in the Detroit Free Press about banks getting back into the auto lending business. She noted that Bank of America was offering a stellar-sounding rate on vehicles:

Bank of America has a low rate of 2.89% in Michigan on new car loans of up to 60 months. The loan has a $200 fee and the borrower must have excellent credit.

Now, that 2.89% “low” rate does sound great. But how does the math work?

Here’s an example. Let’s say we take a plain old car loan, with no money down and no trade-in, for $20,000. Pay Bank of America’s $200 fee and the rate, and you end up with a monthly payment of $383.38. In the end, you’ll pay $21,400 for that new car when the loan is paid off (we’re using our handy auto loan calculator for these numbers).

Now, take that same $20,000 auto loan to American 1, where you pay no fees but you pay a slightly higher interest rate of 3.49% at our low end. That leads to a montly payment of $385.57 – two whole dollars more expensive than BoA’s payment. In the end? You’ll pay $21,200 for that vehicle, which is exactly $200 – or the cost of that BoA fee – less in total.

Isn’t that something?

Tompor quotes a BoA representative who sounds giddy to get back into auto lending:

Doug Melton, direct-to-consumer underwriting manager for Bank of America, said the bank is optimistic about car lending in 2011 and is aiming to offer competitive rates for loans on new and used vehicles and lease buyouts.

“There are a lot of great customers out there looking for new cars, used cars and looking for financing,” he said.

“Competitive” being the operative word. The most you’ll save is $2 a month, no matter how competitive that rate looks compared with ours or anyone else’s.

Isn’t it better to do business with a local institution who charges no fees and is a phone call away when you need service?

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Bank of America: No more free checking

BoA fees

Trying to find any source of income they can, Bank of America is waving bye-bye to free checking accounts – and saying hello to charging customers for face-to-face service, says the AP:

Bank of America, which does business with half the households in America, announced a dramatic shift Tuesday in how it does business with customers. One key change: Free checking, a mainstay of American banking in recent years, will be nearly unheard of.

…To make up for lost fees, [Bank of America CEO Brian Moynihan] also started thinking of new products. In August, the bank introduced a new “eBanking” account, where customers were offered a free checking account if they banked online. The catch: If they opt for paper statements, or want access to tellers for basic transactions, they would be charged a monthly fee of $8.95.

Did you catch that? If you want to interact with a real human being, it’s $9 a month. Amazing.

AmEx Centurion and BoA Accolades card: exclusive, expensive

American Express’s Centurion card is a coveted item by celebrities and regular Joes and Janes alike. But that exclusive access comes with a pricetag: a $2,500 annual fee.

Now Bank of America is getting in on the act with its Accolades Card. To get one, just have $200,000 at Bank of America.

Easy enough, right?

The key to making money on these cards in the transaction fees, says Forbes.com’s Liz Foyer:

Cards are an obvious way into the market, and though lenders aren’t going to make much in the way of late fees and interest charges (assuming rich people pay their bills on time and in full, which isn’t always the case) they make up for it in the fees they charge to merchants to process transactions. American Express network transactions mean fees of about 4% each purchase, so a $60,000 car charged to a Black Amex could potentially rake in $2,400 in processing revenue.

Unlike the Barclay’s Black Card, these cards really are offered to exclusive individuals – either the super rich or the super well-known.

For every day people like you and me, try a card that’s more down to Earth.

Big bank balance transfer rates going up

Bad news if you play the credit card balance transfer game, says MSN Money:

In July, JPMorgan Chase, the largest credit card issuer in the country, cited the new federal regulations when it sent letters to its customers informing them that the bank will increase its maximum balance transfer fee to 5% — the highest charged by any issuer. Subsequently, the company stopped including balance transfers in most of its new offers.

…Bank of America – the second-largest issuer – has increased its maximum balance transfer fee to 4%…The standard balance transfer fee had been about 3% – and some issuers also limited the total fee, often to less than $100, with caps.

From the research we’ve done, most big bank credit card issuers charge some sort of balance transfer rate on top of the regular rate for each transaction total.

American 1? We don’t charge any balance transfer fee.

Bank of America pays more bonuses

If you haven’t heard, now that Bank of America has repaid the government for its bailout, its sending plenty of bonuses to its bankers.

The blog 24/7 Wallstreet reports:

Bank of America will also pass out handsome bonuses to its bankers, just a few months after its repaid the government $45 billion in aid that it got to stay in business through the credit crisis. The Wall Street Journal reports that the bonus pool at B of A will be more than $4 billion. Traders will collect an average of $300,000 to $500,000, according to the paper.

The bonuses are a return to 2006 levels, says the New York Times.

So if you’re a Bank of America customer or credit card holder, you’re helping to reward the bankers who played fast and loose with your money.

NYT: Banks put squeeze on credit card customers

Ahead of the new Credit CARD Act, the New York Times reports sobering news on bank credit card practices:

About 50 percent of the banks responding to the Fed’s survey said they were increasing interest rates and reducing credit lines on borrowers with good credit scores. About 40 percent said they were imposing higher fees. The banks also said they were demanding higher minimum credit scores and tightening other requirements.

…A study by the Pew Charitable Trusts, released late last month, concluded that the 12 largest banks, issuing more than 80 percent of the credit cards, were continuing to use practices that the Fed concluded were “unfair or deceptive” and that in many instances had been outlawed by Congress.

Consider all this a last-ditch effort by big banks to get your money – before the CARD Act stops them from these deceptive and gouging practices.