Bank of America Shifting Credit Lines & A Surprise Refund
For those who have been around this hobby awhile, it is fairly common to find your credit limits shrinking as you get more cards with a bank. Each bank has only a limited amount of credit they will issue and thus the more cards you have, the lower the limit per card. I have written before about Citi’s hard inquiry on credit line shifts, but thankfully Bank of America has no such restriction.
Shifting Credit Lines with Bank of America
My wife was recently looking to beef up her credit line on a card to take advantage of a recent deal. She has four cards with Bank of America, but the highest limit is in the low four figures. That wasn’t enough for this deal, so she decided to see if she could pool all of the credit together and leave minimum lines on the remaining cards.
To request this, she simply called the number on the back of her Alaska Airlines Visa Signature card. When the representative answered, she explained that she would be making a large purchase and was looking to combine her credit on one card. I had heard the minimum that could be left on each card was $500, but the representative said she could bring the remaining three cards down to $200 and shift the rest. She did just that.
My wife was on the phone with Bank of America for about 20 minutes while the agent processed the shifts one by one. No hard inquiry was done and the best part was that the new beefed up credit line on her Alaska card was visible online right away. She also asked the agent to notate the account of an upcoming large purchase. Fast forward and everything worked perfectly. But there was one surprise!
$25 Refund on Alaska Airlines Visa Signature
When my wife logged into her account recently, she noticed two of the cards she shifted credit from had a $25 credit. These cards are also Alaska Airlines Visa Signatures and she paid a $75 annual fee up front when she got each of the cards. It took a second, but I immediately knew what had happened. To understand, lets look at a provision of the CARD Act:
The CARD Act and implementing regulations provide that an issuer may not require consumers to pay fees (other than penalty fees) during the first year in which an account is opened which exceed 25% of the total initial credit line.
By lowering her credit limit to $200, the maximum fees Bank of America could charge my wife in the first year are $50. Since they collected a $75 annual fee up front, they needed to generously refund $25 of it to remain in compliance. This was a happy mistake and not one I would recommend trying to recreate. Forcing the bank to refund money probably won’t be good for your long term relationship. I’m not worried in this case, since the agent on the phone was the one who suggested the $200 minimum limit.
My View on This
I have actually heard of similar things happening by accident with cards that carry a hefty first year annual fee that is not waived. Some people have been able to get their annual fee partially refunded by asking to lower their limit on one of these cards. I actually bring this up for the opposite reason you think. I am in no way advocating doing this on purpose. I believe it is a bad practice and one that will lead to problems down the line. In other words, this paragraph is to make it clear that I am not hinting at anything.
Bank of America makes it fairly easy to shift credit lines if you have an upcoming big purchase. With a simple phone call you can get things moved around and your account notated so that you can earn valuable rewards on life’s BIG EXPENSES! While the $25 per card was appreciated, it certainly isn’t anything I would try nor want to do again!