The $29 fee that cost Bank of America so much more …

December 12, 2008

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I once had a credit card through MBNA. I loved this card. It was an alumni card that proudly displayed my alma mater.

Then, Bank of America bought MBNA. Suddenly, things got bad. The web site functions no longer worked like they should. In particular, paying the card online became much more difficult. Many times, it didn’t work at all. Other times, it process the wrong amount (generally the minimum payment instead of the amount of the bill). I was double checking what I was doing, and clearly this was the fault of Bank of America. News stories at the time pointed to problems they were having with integration – apparently I was a victim.

One month, we didn’t get a bill. We didn’t notice until the next month, when we got a bill with the $29 late fee.

Typically, a credit card issuer will give you ONE freebie late fee. You simply call, and they will waive the fee.

This was not the case with Bank of Ameria. Not only did they refuse to waive the fee, but they refused to escalate our calls to a manager, and even hung up on me once (for no real apparent reason – I wasn’t using abusive language or anything, I was simply demanding to speak to a manager).

Finally, after repeated calls, we managed to get the fee waived. Honestly, I can remember exactly how this miracle occurred.

However, I was sick of Bank of America by this point. I cancelled by card. OK, we ran a fair amount of purchases through the card, so they lost a few bucks in transaction fees. No big loss, right?

We have our mortgage through CountryWide. As you know, CountryWide has been purchased by Bank of America. We are refinancing our mortgage on Monday (shaving 3/4 point off our rate). We are switching lenders. We didn’t even consider CountryWide/BofA as an option. We simply don’t trust Bank of America at this point. With all the problems we encountered with the credit cards, we have fears that they won’t handle the escrow properly or will make other errors.

Does anyone want to guess how much this will cost Bank of America over the course of the loan? It’s a rather large amount … certainly much larger than the $29 fee they fought to keep. If we had encountered positive customer service during the credit card debacle, we would probably be keeping our loan with CountryWide/BofA.

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