A day late and $1.50 short

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A big part of Wesabe is people helping each other make better financial decisions. Today one of our members, “someoneelse,” posted a link to a Boston Globe article about Bank of America adding a $1.50 finance charge for former MNBA credit card holders (B of A acquired MNBA in 2005) on any balance carried forward. So, if your finance charge would have been $.30, they round up to $1.50…just because…just because they can. Or in B of A’s words in its letter to customers, the company added the minimum finance charge “due to a change in our business practices.” Like I said, because they can.

This will probably generate millions of dollars in incremental fee revenue (benefit of scale) by leeching just enough money from their customers without causing so much pain that they actually react. If you’re affected, “someoneelse” also linked to a Consumerist article explaining how to opt out of this charge.

A few thoughts:

1) thanks to “someoneelse,” the Consumerist, and Bruce Mohl (the Boston Globe reporter) for bringing this to light. A buck here or there might not sound like much, but recognizing the cumulative effect this action will have on consumers’ bottom line is critical

2) Comments on these stories have shown that consumers overwhelmingly see this change as a “gotcha fee.” Will outrage translate into action? How convenient is the local branch if every piece of mail from the bank requires action or they’ll jack up your fees?

If a company changes your terms or engages in a business practice that you don’t agree with, call them out. And if that doesn’t work, YOU can make a change… by moving your business somewhere else. Of course that only happens when push comes to shove. But it does feel like B of A is giving these customers a not-so-friendly nudge, doesn’t it?

2 Responses to “A day late and $1.50 short”

  1. txtr Says:

    I always have to force myself to read the fine print on the “Notice of Change In Policy” pamphlets that my banks send. I received, and read this policy change form Bank of America. As someone who is committed to *not* paying finance charges anymore, I was PISSED. Here I am, being financially responsible by clearing my balance every month, and they were STILL going to charge me??! They provided the option to send a signed letter (posted mail only, no email or call) to reject this change. I complied. I’m curious to see whether this will result in a closed account, or if they’ll recognize my rejection, and maintain the account as is. If it’s the latter, it’s yet another incentive to take the irritating minute or two it takes to read those fine print bits the bank sends. And if they close the account, so much the better. Would not be the first time I’ve happily terminated business with this institution.

  2. Jason Knight Says:

    txtr,

    I had a similar thing happen with Citibank (they raised my interest rate) so I wrote them saying that I didn’t accept the change. They canceled my card immediately (which means when the expiration date comes around they won’t renew). Funny thing, I don’t miss that card or Citibank at all.

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