OT - Bank of America Credit

L · 2007-02-27T18:40:55+00:00

I read the fine print. Awhile back my MBNA Credit Cards (business and personal) became Bank of America. Today I opened the business CC 'change of terms' letter.In the new 'agreement' - SECURITY INTEREST"Company and guarantor each grants FIA Card Services a security interest and contractual right of offset in and to, all deposit accounts now or hereafter maintained by Company or Guarantor (including, without limitation, joint accounts) with Bank of America or any of its affiliates....."Meaning they can TAKE YOUR CASH (or, the cash from the accounts of anyone else who may have given you joint access (parental retirement funds? children's college funds?)).Oh, and"If you have other loans from us or you take out other loans with us or in the future, collateral securing these loans will also secure your obligation under this Agreement"If I am reading this correctly, this means if you have a CC with BOA and you have an auto or truck loan with a subsidiary or affiliate of BOA, and you default your CC -- they can take your trucks.BOA, transforming unsecured debt into collateralized debt. Great magic trick.

Feb 27, 2007 45 Replies

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Golden California Girls 19 years ago

That isn't the profit to the CC company. That is the profit of the transaction processor. They are the ones the merchant hires to send the transaction off to the customers bank. What's in it for the bank that issues the card? Or don't you know how many hands pass a credit card transaction around before it gets on your statement.

Oh and think about this for a second, commercial paper [bonds] is about 8 to 10% So they have to borrow the money to cover your charge. What's their profit again?

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Jay M Apple 19 years ago

After slogging down one of the longer threads (OT, no less) in this NG, I sort of lost track of Who's on first, What's on second and so on.

HOWEVER,and with much trepidation lest this starts another cascade -

1) whoever (Steve Scott?) said - in effect - that what can't be retrieved from the deadbeats should come from the CC companies' profits and not from the rest of CC holders, seems to miss the point that the CC companies' profits come from the rest of CC holders: US!

2) whoever commented negatively on BoA for issuing CCs to non-citizens/non-residents/undocumented folks/illegal aliens, might ponder the difference between use of CCs in the USA issued by BoA in the USA to these people VS. use of CCs in the USA issued by BoA to those same people in their home countries before they somehow made it over the border and stayed.

INCOMING!!

Jay .

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Bob Wang 19 years ago

Jay:

You're a better man than I. My eyes glazed over A LONG TIME AGO ;-)

Bob

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David Smith 19 years ago

Very plain except it doesn't make any sense. It is already coming out of profits. The product is priced with the target demographics in mind.

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HeyBub 19 years ago

Static thinking. Business is dynamic.

If the profit dimishes, the owners or investors will make the necessary changes in policy to regain the optimum position. In the case where there are too many defaults, the company may try to raise the interest rate on the remaining customers. When the customers move their business to a more rate-friendly competitor, the company will take other steps.

If the company is large enough, one of those steps will be to influence legislation.

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