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Capital One Complaints - "What's in your wallet?"

By
Real Estate Agent with COMPASS DRE# 01339266

I received an "Important Notice" from Capital One "of a change in terms" regarding my account.

The notice stated that "due to extraordinary changes in the economic environment, we're reviewing our existing credit card accounts. Having considered these economic conditions, your account's current Purchase Rate and the length of time you've had this rate and account, we will be changing your Purchase and Balance Transfer Rate" - "However, you will not be assessed the higher Purchase Rate listed below until next year."

Capital One is increasing my Purchase APR from 4.99% to 13.9% and the Cash Advance APR will increase from 9.9% to 24.9%.

1. I have had this Capital One account for over three and a half years

2. My account has always been in good standing

3. There has been no material change in my FICO score

The only purpose for the increased interest rate is to try and pump up their income and generate profits.

Now I do have the "choice" to not accept these new terms, but then Capital One will close my account and I can pay off any outstanding balance on the original terms and conditions. However, by closing the account my credit report will indicate a decreased amount of total available credit which will in turn impact negatively on my FICO score.

The only sensible thing for me to do is therefore ensure I keep my account open and maintain a zero balance.

I believe Capital One is acting in bad faith and would be interested to hear other experiences with the Bank.

Keep in mind that Capital One received over $3.5 Billion of Bailout Funds in December 2008 - the purpose of which is to make credit more readily available. It is clear that they're doing the opposite by making it more expensive for consumers to borrow. Isn't this a violation of the terms of receiving Bailout Funds?

Congress needs to act now to prevent banks from putting the screws on already cash-strapped consumers.

Comments (22)

Vickie McCartney
Maverick Realty - Owensboro, KY
Broker, Real Estate Agent Owensboro KY

Hi Stewart~ It seems the only way you can beat them at their game is to always pay your balance off and then leave it open (but always pay as you go....that way you won't be apying those high rates ) 

Feb 25, 2009 03:39 AM
John Hersey
Berkshire Hathaway HomeServices Homesale Realty - York, PA
e-PRO Realtor

Yes crap sounds like a good way to put it!  Think of all those who use credit cards and do not pay them off on time.  What a rip off!

Feb 25, 2009 03:45 AM
Mark MacKenzie
Phoenix, AZ

AMEX is all encouraging their clients to pay off and close their accounts and is offering some of their members $300 to do so.

I think this is yet another example of not only how bad these companies are being hurt by defaults, but also how they perceive the continued systemic risk in the economy.

Feb 25, 2009 03:51 AM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Hmmm they are all doing this type of thing.  Citigroup cancelled my card because I was too good -- I paid it off -- so I was cancelled!  What a crazy world. 

Feb 25, 2009 04:01 AM
Bruce & Mary Smith
Savannah Lakes Homes - McCormick, SC
REALTORS, Savannah Lakes Village McCormick SC

I'm glad we do not have a Capital One card. Like Joan, we have had a card cancelled because it is always paid off!  Yes, it is a crazy world.

Feb 25, 2009 04:05 AM
Maya Thomas, Broker
Tampa, FL
Please see my client recommendations.

If you write a letter to the company and tell them that you don't accept the new terms and conditions then the company is not permitted to change them.  If you do nothing they can change the terms at will.  They can't accellerate the repayment of the card although they could deny future charging benefits.  Would it really matter since you can use a different card?  They usually just agree not to make the changes.

The Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration have proposals on the table that are supposed to put an end to abusive credit card practices.  If the new rules are approved they may be able to force credit card issuers to give card holders a reasonable amount of time to pay before charging late fees.  The new rules also stop credit cards from applying payments to the lowest-rate portion of a multirate balance (a zero percent balance transfer) instead of the 19% to 21% interest rate or cash advance rate. 

Bills have also been introduced in the House and Senate targeting credit card consumer abuses. 

To post comments go to www.ConsumersUnion.org/CreditCardReform.html

To file your complaint directly with the Federal Reserve go to regs.comments@federalreserve.gov

If you want a simple site that will fight for consumer rights go to http://www.affil.org/ to join Americans For Fairness In Lending.  You can scroll through legislative issues that affect you and in 1 click send an email to your governmental officials.  I think there were some credit card issues there the last time I looked.

You can also make a complaint with your State Attorney General.  It's awesome when you hear in the news that a law suit has been filed by the State Attorney General about something you complained about a year ago.  That law suit would never have been filed without people taking a few minutes to make a complaint.   

Feb 25, 2009 04:19 AM
COMPASS PALM SPRINGS | Stewart Penn
COMPASS - Palm Springs, CA
COMPASS Palm Springs - Broker Associate

Maya - Those are very useful and informative links. Thanks for sharing.

Feb 25, 2009 04:30 AM
Terry Haugen STAGE it RIGHT! 321-956-2495
Stage it Right! - Melbourne, FL

Stewart, same thing happened to me with B of A.  I had my card for 13 years and they jumped me from 5.90 to 9.90.  Its all about choices, as I told the customer service rep.  I paid off the card and closed the account.  I kinda wonder if they are doing it in order to get us off their books.  Unlike AMEX which is paying people to pay off and close accounts.

Feb 25, 2009 04:46 AM
COMPASS PALM SPRINGS | Stewart Penn
COMPASS - Palm Springs, CA
COMPASS Palm Springs - Broker Associate

Terry - FYI: Paying off the card and keeping a zero balance is better for your FICO than actually closing the account.

Feb 25, 2009 05:20 AM
Robin Kurtz
Long and Foster Real Estate - Kensington, MD

Hi Stewart, thanks for atlerting me to your blog.

As you know, I have no love lost for Capital One. Not only did they take a big chunk of bail out funds...they apparently used those funds to buy up our largest and oldest local bank here in the Maryland suburbs.

I've been a loyal patron of Chevy Chase Bank for decades and I can tell you, their presense will be missed.

In addition to that...shortly after the sale of CCB was announced, I received a letter from Capital One informing me that since I did not carry a balance on my Capital One credit card, it was being canceled.

Here I am, a patron of a bank they just bought out...and they are telling me that because I have paid off my credit balance and do not currently owe them any money, my business is not important to them.

When did I fall through the rabbit hole?

In this new world, everything seems upside down. Because I have such good credit, I'm not good enough to borrow from them? I hope they remember that when I let them know that because I'm no longer worthy of their credit line...they are not worthy of holding onto MY deposits!

BB&T...here I come.

BTW, the real reason they, and other credit card companies are raising their interest rates on you now, is because new regulations are coming down the pike which won't go into affect until 2010...but at that time, it will become much more difficult, possibly even prohibited, for them to raise their customers' rates simply because they feel like it.

Laissez-faire may be a romantic notion, but "going to hell in a handbasket" probably sounds pretty in French too.

 

 

Feb 25, 2009 05:34 AM
COMPASS PALM SPRINGS | Stewart Penn
COMPASS - Palm Springs, CA
COMPASS Palm Springs - Broker Associate

Robin - I truly hope that Capital One is called before Congress for their immoral behavior.

Erica - I'll bet you had no change in your FICO and they cut your credit line anyway!

Feb 25, 2009 05:46 AM
Alice Linahan
Voices Empower - Argyle, TX

Stewart,

Thanks for your post and thanks for all the comments and information that followed.

Lesson is Cash is "King"

Feb 25, 2009 05:52 AM
Terry Haugen STAGE it RIGHT! 321-956-2495
Stage it Right! - Melbourne, FL

Yeah I know Stewart.  But my FICO score can handle the hit.  I always advise people to keep the account open, to keep the score up.  Sometimes you just gotta do what ya just gotta do.

Robin, better check out BB&T before you make the switch.

Feb 25, 2009 10:03 AM
Rich Dansereau
Positive Real Estate Professionals - Knoxville, TN

What a racket they have. I have completely done away with the credit cards I previously had. I understand that available credit with low usage is beneficial to your credit score but I have chosen to eliminate all of my credit cards.

Feb 26, 2009 05:32 AM
Anonymous
Richard N Hurd

Capital One is at best a legal thief and should be held in contempt. I received the letter raising my rates so I paid off in full and sent a registered letter to them with this request. Good thing I checked the online account today as a bogus 4.90 interest had been added even tho the account was paid in full.  I went ahead and paid the 4.90 and called them again to close this account. After 30 minutes they agreeded to close but warned me of the negitive rating my credit would take.. So what I will pay cash for whatever I need and do not need a company charging me 30% for purchases.. From all the complaints I have seen concerning capital one they are thiefs and should not be receiving taxpayers funds period.

Feb 27, 2009 06:38 AM
#18
Patricia Kennedy
RLAH@Properties - Washington, DC
Home in the Capital

Stewart, I'm using my miles for my flight to Paris.  Maybe I should pay more attention to the nitsy details!

Feb 28, 2009 02:42 AM
COMPASS PALM SPRINGS | Stewart Penn
COMPASS - Palm Springs, CA
COMPASS Palm Springs - Broker Associate
Anonymous
eric le-dallas, tx

I cancel my card like 3yrs ago, and never received a statement ever since, but lately i start received them first with zero balanced and now with annually charge and late fee.??? I call customer service..they seem like don't care my problem..just pay of the balanced and canceled the card again...

Mar 26, 2009 11:33 AM
#22
Anonymous
Carrie

I'm at the present time TRYING to cancel a Capital One card.  I'm not sure what I'll have to do to get it cancelled - perhaps send my first-born and a pint of blood.  The card is paid in full. (Please don't start telling me about the additional interest - I was aware of it and paid the full amount; there is nothing due now or later.)  Despite repeated phone calls, e-mails, and a "signature-required" mail request for cancellation, the card is still open.  It's been 6 days.  They managed to cancel my other Capital One card today within 12 hours of my original request.  It had an interest rate below 10%.  The one they won't cancel is almost 19%.  Maybe that's the reason they won't cancel it?

Jul 29, 2010 01:22 PM
#25