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For just a moment, imagine this situation...
The wedding was unbelievable, the honeymoon was unforgettable - you used just $4,000 of the $12,000 in available credit from Bank of America to finance some of the wedding and honeymoon expenses. return home from your honeymoon and find a notice from Bank of America that says your interest rate just doubled and your credit limit has been reduced by 50%.

Guess what? The honeymoon is over!  Your credit score has just been trashed by Bank of America!

In part, here is how credit scores work in this situation...
A higher percentage of used available credit = a lower credit score.
A lower credit score = more difficulty getting credit PLUS higher interest rates if you are able to obtain credit.

Although a trashed credit rating (which will make credit sources harder to find and more expensive if found) should be more than enough damage, other areas of your life that are affected by your credit score will likely be impacted as well.  Your homeowner's and car insurance will likely cost more,  your chance for a new job or a job promotion may disappear, and more... 

Using the example above, if you have a $12,000 credit line and you have a $4,000 balance you are using only 33% of your available credit.  However, if Bank of America decides to reduce your credit line by 50% from $12,000 to $6,000 suddenly 66% of your available credit has been used making it look like YOU are a higher credit risk!   FICO (Fair Isaac and Company who is selling a product that they claim will analyze your spending and payment habits to predict how much of a credit risk you are) is to blame as well since they have been selling a defective product which does not recognize instances where your credit utilization is modified artificially rather than by your actions.

That is exactly what is happening to more and more credit card users every day!  Additionally, there have been many reports that Bank of America has unexpectedly increased interest rates (many times more than doubled and up to 28%) significantly reduced credit limits and closed accounts without any valid reason.  These are not isolated incidents.  The growing problem is widespread and is damaging more consumers each day.

When interest rates are increased significantly, the required monthly minimum payment also increases significantly.  This type of action puts unnecessary financial strain on the consumer.  It also negatively impacts the consumer's debt to income ratio (how much money you pay out each month compared to how much money you make each month) which is another factor that is considered when determining a credit profile and credit score - which determines if you will be able to qualify for credit and what interest rate you will be charged for credit.

Unfortunately, decreased credit limits or increased interest rates have a cascading effect.  Once just one credit provider reduces your credit limit or increases your interest rate others will likely follow because the action taken by the first creditor will change your credit profile and credit score for the worse.  If fact, Bank of America has reduced consumer's credit limits without reason making it look like the consumer had used a higher percentage of their available credit and then a month later either further reduced their credit line or increased their interest rate because "the consumer had used too much of their available credit".  Talk about unethical behavior...

These types of actions can be devastating to your credit score and your ability to obtain affordable credit in the future.   In fact, numerous publications are bringing attention to  Bank of America's (and now Chase's) questionable actions. Business Week recently brought attention to the problem in an article entitled "A Credit Card You Want To Toss" and MSN Money Central also published an article entitled "Bank of America blindsiding cardholders".

If you value your credit rating or your ability to obtain future credit, this is not a situation to ignore.

It is estimated that 1 in 5 credit cards used are now controlled by Bank of America. Since Bank of America began acquiring other major banks which also issue credit cards it is not uncommon for consumers to now have more than one Bank of America Credit Card.  This becomes very problematic when Bank of America feels the need to compensate for losses they have incurred in another financial market (like sub prime mortgages) or when they need to raise cash.  It is estimated that over 40 million credit card accounts are controlled by Bank of America which gives them a ton of leverage because they are able to dramatically change your credit terms, increase your interest rate and reduce your credit limit at-will and without reason or justification.  Unfortunately, any of these changes will likely have a negative impact on your finances and your financial future.

There are many instances reported where, once a balance is carried on a Bank of America account, the available credit limit above the balance has been all but wiped out by an "adjustment" by Bank of America.  Although interest or credit limit adjustments could be expected if a credit score changed significantly, we are not referencing situations of problem credit or declining credit scores.  We are talking about people who have never had a late payment and who maintained mid 700 credit scores.

As a real life example, a 52% usage of available credit (the customer had taken advantage of Prime Rate for the life of the balance transfer offers) suddenly became a 93% usage of available credit after the credit limit was reduced by Bank of America.  Although there was no credit problem previously, after Bank of America reduced their credit limit it made it artificially appear that they do have major credit problems and have used - or abused almost all of their available credit.

That drastic reduction in available credit will make it appear that the consumer has maxed out their credit cards and is a credit risk.  It will negatively affect their credit profile, their credit score, and will ultimately hinder their ability to obtain financing -  or at least financing at a fair interest rate.  With the mortgage and finance industry now being overly cautious, this type of unscrupulous activity by Bank of America could be financially disastrous to anyone who is planning to finance a home or other major purchase because this type of action could impact a credit profile and credit score for years to come -
and can cost thousands of dollars extra each year due to increased interest rates

 NOTE: A damaged credit score will also likely increase car and home insurance premiums since many insurance companies now use credit scores when determining risk.  Lower credit scores will also likely have a negative affect on other areas where a credit score is used - including the ability to rent an apartment as well as employment.

Unfortunately, Bank of America's sheer size and their ability to unfairly manipulate factors that are used to determine credit risk puts everyone at risk who has any type of financing through them.

J.P. Morgan Chase has come forth with equally sleazy and questionable tactics.

Recently CHASE targeted customers who previously took advantage of 2.99%, 3.99% and 4.99% for the life of the balance offers and slapped them with a $10.00 A MONTH SERVICE "FEE" and MORE THAN DOUBLED the minimum monthly payments from 2% of the outstanding balance to 5% of the balance.  That means that if you had budgeted a $200 a month payment you would then be forced to pay $500 (FIVE HUNDRED DOLLARS) a month after Chase changed the rules.  Additionally, Chase modified the account terms so that a customer CAN'T OPT OUT or close their account to avoid the changes.  Along with Bank of America, Chase also has become a financial parasite that can't be trusted!

Although low rate convenience checks and intro offers from Bank of America or Chase may seem very tempting when it comes to financing part of your wedding expenses, you would be very wise to avoid financing anything with Bank of America or Chase.  If they can't be trusted to treat customers fairly when it comes to credit cards, why should they be trusted with any aspect of your finances like your savings or your mortgage?  Considering the apparent predatory nature of Bank of America and Chase, if you currently carry a balance on one of their credit cards or have any type of credit line with them, it would be wise to move that balance and your other accounts elsewhere before Bank of America or Chase puts you in a position that could be damaging to you for years to come.

The sad truth is that some financial institutions cannot be trusted to treat customers fairly which means that great caution should be taken when borrowing money. Although it is best not to take on additional debt, if you really need to finance part of your wedding expenses,  a much better - and much safer - alternative to financing your wedding or honeymoon by using credit card debt is to obtain a personal fixed interest, fixed payment installment loan from the bank that you normally do your banking with. The installment loan will have a fixed interest rate and fixed monthly payments that will never change.  Also, installment loans are viewed much differently than credit cards when your credit score is calculated.  Best of all, you will have peace of mind.  YOU WILL NOT HAVE TO WORRY ABOUT INCREASED INTEREST RATES OR REDUCED CREDIT LIMITS that may damage your credit score.

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