Bank of America’s Credit Card (2007 Sep)

by Barry A. Liebling

Note that an earlier version of this column appeared at in 2007 March.

In February 2007 The Wall Street Journal described the Bank of America’s program to sell credit card services to Hispanics with “little or no credit history.” It is open to checking account customers who avoid overdrafts for at least three months. Applicants must provide the bank with approved forms of ID – which may be a Social Security number but can be an Individual Taxpayer Identification Number (ITIN) or a foreign government-issued identification card.

The new secured credit card is expensive and requires a $99 security deposit. Furthermore, the interest rate is comparatively high – reflecting the greater risk of dealing with its target customers.

If successful, The Bank of America will attract Hispanics who previously relied on cash. The bank intends to help its new customers build credit, earn their loyalty, and encourage them to trade up to other Bank of America financial products.

The program is remarkable for the controversy it has generated. The Wall Street Journal pointed out that bank customers who do not have Social Security numbers are typically illegal immigrants.

Journalists on the Fox News Channel have condemned the program for encouraging illegals to stay in the country. Some commentators, consumers, and local government officials have expressed outrage and vowed to stop doing business with The Bank of America. Curiously, critics who are savaging the bank for its new card are largely silent about the bank providing checking accounts to illegal immigrants.

Bank of America officials insist that their new program is in compliance with the law, particularly the USA Patriot Act.

What is the ethical status of the new Bank of America program? New credit card customers probably view it as a valuable tool for proving their creditworthiness. But outside critics, who are typically not potential customers, worry that it will have calamitous consequences – principally by paving the way for terrorists and common criminals.

But contrary to the critics’ fears the new credit card is likely to discourage terrorists and criminals from wanting it in the first place.

Consider terrorists – who have nefarious intentions and actively plan to harm Americans. If they are sophisticated they know that using a credit card will leave an audit trail. They prefer to use cash or pre-paid credit cards which are harder for law enforcement to monitor. If they are naive and acquire a card, they are more likely be apprehended. In either case the existence of the new Bank of America product does not increase the peril to Americans.

What about common criminals or gang members who habitually commit assaults, robberies, and even murders? These scoundrels usually prefer cash and may not be eager to acquire a credit card with their own name on it. But even if they try to get the credit card they will almost certainly be rejected since it is only offered to checking account customers with good records.

Many critics of Bank of America will not be mollified even if they are convinced that the card will not make undocumented aliens any more threatening. Some point out that an illegal alien is, by definition, illegal. They want illegals gone and believe that companies that encourage undocumented aliens to stay are harming the country. But critics should reconsider their position.

First, it is a mistake to declare that a business that makes the United States more attractive to undocumented aliens is doing something wrong. If this is immoral then the number of guilty businesses is enormous. American products and services generally encourage aliens to stay. The vast number of supermarkets and restaurants in America are certainly an attraction. Discount clothing stores in America offer wide and economical choices. The American entertainment industry provides customers with the most variety in the world. Why should credit cards be considered a special inducement?

Second, there are millions of undocumented aliens in the United States, and someday there will be a reckoning. Laws will be enacted and enforced – some aliens will be welcomed while others will be required to leave. The question is how to differentiate people who deserve to stay from those who do not.

The Bank of America credit card program can help sort people out. It is not neutral with respect to whom it is appealing. Customers who acquire the new card are employed, have a good record with their checking accounts, and display ambition to lead productive lives. This is a profile of people who should live in the United States. If nothing else, the new Bank of America credit card gives immigrants a chance to declare that they will be good neighbors.

*** See other entries at in “Monthly Columns.” ***

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