Banks Closing Credit Cards Without Notice

Yesterday I was livid when I couldn't log onto my Bank of America Mastercard account. When I finally got through to an operator, she said they closed my account. Their reason: a merchant said some cards were "compromised." She refused to tell me which merchant and no one sent me a notice about my account being closed. They just closed it.
They were sending me a new card but I told them to close the account for good. I had intended to do it in a matter of days anyway. Bank of America used to pay me to have a card. I paid the balance off every month and earned cash for points. I'm not their bread and butter. But now, after 10 years, they're charging me a $50 annual fee.

Citibank is closing accounts without warning as well and it looks as though there are no laws against it.

Citi confirmed the basics. The bank said in a statement it "decided to close a limited number of oil partner co-branded MasterCard accounts." That includes not only Shell, but Citgo, ExxonMobil and Phillips 66-Conoco cards.

The close date was Wednesday, and letters were sent out Monday to customers informing them of the change, a Citi spokesman said. The bank would not say how many cards were shut down or how much available credit they represented.

But unlike the bank's move to shut down its Home Depot cards, Citi did not discontinue the sale of these cards altogether. It is still accepting applications, promising rewards like 3 percent cash back on fuel purchases and 1 percent cash back on other spending.

No law, including the Credit CARD Act that has started to take effect, prevents banks from closing down credit accounts without warning. Credit card issuers all maintain the right, typically listed in the fine print on credit card agreements. MSNBC

Obama's Credit Card Bill of Rights

excerpt:

That’s why back in November, I proposed a plan to help ensure that credit cards don’t become the next subprime crisis. It starts with making sure that we have a system that’s open and transparent. To help you understand the risks that are involved in signing up for a credit card, I’ll create a five-star rating system. That way, Americans can compare credit card companies and avoid those that are stacking the deck against them.

Now, don’t get me wrong. We all have a responsibility to pay what we owe. But we have to ensure that the amount we’re paying is fair. That’s why I’ve proposed a Credit Card Bill of Rights. The first thing we’ll do under this bill of rights is ban unilateral changes to credit card agreements. You should pay the rate you signed up for. If the credit card company wants to raise that rate, you should be able to opt out of the agreement.

Second, we’ll ban rate changes on past debt. If a credit card company wants to raise interest rates, then that new, higher rate should apply to the debt you add going forward, not what you already owe. The store can’t change the price of what you bought after you bought it and neither should your credit card. Third, we’ll ban interest on transaction fees. If you’re late in making a payment, you have to pay a late fee. But you shouldn’t be paying a fee for paying a fee.