It is the time of economic slump and everyone is worrying about their finances. In such circumstances Bank of America is offering an opportunity which they call Clean Sweep.  It is Bank of America ‘Debt Consolidation Plan’.

It is good to know about this offer and educate yourself to get maximum benefits from it. Let’s take a look at their original offer according to their marketing plan and its difference.

If you go through the offer you will come to know that instead of getting great help to get out of debt, the offer in fact pursue you to use the line of credit to go even further into debt.

The Debt Consolidation Offer Envelope

When you got the envelope about that offer you will be surprised to see from the back of the envelope, the sender is from Bank of America but the face had some interesting statements:

• One Phone Call
• One Predictable Monthly Payment
• One Fast Way
• To help you get out of debt

From the marketing incentives made on the envelope it seems that only one of the four items is perhaps true, i.e. “One Phone Call”. The others may be much exaggerated statements or straight away trickery. Let’s see the other offers.

One Predictable Monthly Payment

When you see the details inside the envelope says you will come to know that the interest rate offered is variable and can be adjusted regularly and go way up. According to Bank of America they adjust your APR on a monthly basis due to changes to the prime rate. Also the estimates are used for repayment term and payment amount. These estimates can be changed because of the change in APR, late or partial payments by the customer, fees, by taking additional advances or your enrollment in credit protection.

Criticism

It is not possible to predict monthly payment if the interest rate is variable and also it is certain that the prime rate will almost certainly go up from the low today. The statement given by Bank of America, to support predictable monthly payment is the use of formula to calculate it, is ridiculous. The statement saying use of formula is apparently designed to make you believe that it will be a fixed monthly payment in the enclosed offer.

One Fast Way

It is difficult to believe that the statement “One Fast Way” is really true. We are not sure that this Bank of America statement is just to add few lines in their advertisement or this offer might get you approved fast. The only possible way that this loan will get you out of debt faster is when you are currently being charged much higher interest rates.

Criticism

Inside the envelope you can see that Bank of America is advertising an interest rate will be in the range of 8.99% to 21.99%. Now the person who has already poorer credit report or a lower credit score will be likely to be extended higher interest rate. So most probably he will get the initial interest rate up to 21.99% high. Thus this statement covers the entire Bank of America debt consolidation plan giving advantage to them. That entire means is only the one paying higher interest rate can get it faster. It is not mentioned anywhere that you would even get out of debt faster even with the initial minimum APR since the rate is variable rather than fixed.  Changes to the interest rate will also impossible to predict, during the period of repayment.

To Help You Get Out of Debt

It seems mare a wish “to help you get out of debt”. Actually this offer is like trading one debt for another. It is simply the use of credit from Bank of America to pay off other debts. Taking advantage of this offer mean rather than getting you out of debt, you are simply sinking into it.

It is for sure that Bank of America would argue that by taking advantage of this variable interest rate offer that is subject to penalty interest rates of 27.99% and other fees and charges, that it is possible for someone to get out of debt. Yes, but not until the entire loan is repaid, and at what total cost?

Front of the Debt Consolidation Offer

Let us see the front part of the Bank of America Clean Sweep Debt Consolidation offer. On this we can see a series of bullet points which are their key promotion statements.

A loan amount up to $50,000: Starting from the 1st one and given and the specific information statements related to it. The statement is “A loan amount up to $50,000” with this there is a mark which leads to the following explanation.

“Approved accounts will have a credit line between $500 and $50,000 based on creditworthiness”: Than with the statement “pay off high interest rate debt” there is a mark which leads you to this statement.

“We may prohibit use of this account to pay off or pay down any account issued by FIA Card Services, N.A”: Now FIA Card Services is actually the subsidiary of Bank of America. Therefore this means that your previous debt with MBNA is now debt owned by Bank of America. And by this statement BOA is preventing you from paying a debt off owned by Bank of America. Read the full story

During the past several years, the market scenario has completely changed. In order to retain the old consumers and attract new ones, financial companies are coming up with new packages and offers. Their sole objective is to help consumers and attain maximum cash in return.

The Latest Package of Bank of America

Bank of America is one of the well-known and reliable banks in the US financial market. Like other banks, Bank of America also introduces new packages for their consumers. The newest package of Bank of America is known as “clean sweep” line of credit. This package is aimed to those consumers who are in need of debt consolidation.

It is obvious that the banks and other marketing promotions are not always genuine; they possess some tricky games, too. The contracts company deal in may have some hidden clauses. They may not be visible in the time you sign the contract, but you will realize when you are made to pay the fees and interests of the service. So, you need to be very careful before getting into a deal. Actually the contracts of such organizations include some technical terms that might not be understood fully at that time could put you in a fix.

Moreover, there are some words in small size written at the bottom of the page. Consumers often do not read them and skip for grated, but these are things organizations catch people.

Similarly, “clean sweep” package also contains some hidden clauses. If you read the contents of the plan, you will see that it puts you into such a wild circle of debts. Even you will hardly be able to return the debt in full.

History of the Scheme

In reality, the scheme was introduced after the merger of Bank of America and MBNA. They advertised the package in debt consolidation loans and fixed the limit of borrowing to $25000. They also mentioned that the interest rate will not be more than 9.49%. However, this is the minimum rate, not maximum. The contract also states that these costs may vary as per the rates of interest published in the Wall Street Journal.

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Debt consolidation means to use one major loan in order to pay off all the other loan. It is implemented by simply using a collateral object such as a house to turn into secured loan and pay off the other loans, or sometimes it is the other way round.

There are many organizations that specialize in debt consolidations, and amongst them Bank of America, is the organization that has introduced a program called the Clean Sweep credit line, which offers loans for debtors to use as pay offs.

Depending on the credit limit of the user the program offers a variable interest rate of around 25.44% with a 3% transaction fee every time an advance is needed. This fee may start from a minimal amount of $5 with no maximal limit. The reason this scheme is popular is that it offers payment restart terms every time a request for advance is stated and this leniency is validated for 72 months.

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529 Plan Credit Cards help you to follow the 529 plan, which is a savings plan that is used for saving towards future college costs. The plan offers a variety of tax-advantages over other forms of savings. Families who want their children to go for college use credit cards with rewards that are tied into 529 plans. The credit card owner uses the 529 rewards card to make all of their purchases, and as a result, the rebates drop into the 529-college savings account.

Considerations for 529 Rewards Credit Cards

There are some conditions that you should consider before opting for this kind of credit card. You will not be able to get any benefit from a 529 rewards credit card if you are unable to pay off your entire monthly balance each month. And in this case, if you carry a balance from one month to the next, then the interest you pay on the card will almost always be higher than the amount of rebates you earn.

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