Better yet, don't carry credit card balances and don't use your credit cards for cash advances.

I'm assuming this is just for credit cards and not other types of debt issued through CapitalOne?

I called a year ago to ask about having my interest rate lowered from the 20% it was (this is my first-ever credit card) to something more reasonable since my credit pretty much kicks ass. They happily lowered it to 12.5% and then a couple months later it went up to 14% "to reflect current economic conditions".

So, this weekend I figured I'd try again since I'm getting a lot of 10% offers, and they definitely wouldn't budge this time. I'm all about my CapitalOne card. Their service has been good to me, the Web site is easy and fast, and they've been really prompt about replacing my card on the multiple occasions I've lost it.

That just seems shady that they're going to make a fixed-rate card into a variable-rate account that's not even competitive. I might have to take a look at another company's offers if this is what I get to look forward to.

I cut up my Capital One card 5 years ago & never looked back.

They are a joke.

Ditto on the cut-it-up ... mine started out as an 8.5% card from someone else but it morphed into a Capital One via some acqiusition, whereupon the rate doubled. I talked them back down on it, but it seems to just wander at will. So snip snip snippity snip.

Capital One is the one card, however, that does not charge you the 3% 'rape fee' for international transactions. I keep the card for international trips and save anywhere between 3-4% on all my purchases abroad. I tested it this summer with my chase card and the difference was 4.1% for the exchange rate on the same day.

dear consumerist, you do realize that fixed doesn't mean fixed right? it just means they will send you a notice 30 days before hand of any changes to your rate/grace period, etc?

I have a fixed chase card, they wanted to change my interest rate and other things. I opted out of what i could, but some things were not up for being able to opt out.

don't like it? don't use them. i wouldn't use Cap One just because they don't report your credit limit, which hurts your credit score.

@theWolf: Carry a balance? You're the CC companies' bitch.

If you really need to float the balance, just do a balance transfer to a zero percent intro rate on a new card. There are 50 or so listed in a recent Consumerist "article."

Just an FYI in case you are not using "cut it up" to mean "closed the account and cut up the card."

If you do not close the account, your credit may be harmed by the excess credit available to you. But more importantly, you have an account out there you never pay attention to that is just waiting for an identity thief to stumble on it.

As crappy as it is, they're within their contractual rights to do this.

HSBC just raised one of my rates -- I inquired as to why, and they sent me a letter saying that the increase didn't have anything to do with my individual credit history -- just stuff about the current economic climate. I am now aggressively paying off the small balance I have on that card.

Like others have said, if you don't want to be the CC companies' bitch, don't run up a balance. I know that sometimes this is easier said than done. I'm not trying to be self-righteous, either (unfortunately, I'm currently the bitch of more than one cc company). It's just that owing money to the CC company makes it easy for them to make you their bitch. :-(

@Sam Glover: No way. DO NOT close old accounts. Average account age is a key factor that increases your credit score. Contrary to popular belief, a large amount of available credit can INCREASE

They use the barbarians as their namesake in their commercials by design. So now they have synergy. Their business practice matches their marketing plan.

@iMike: your credit score by reducing your percentage utilization.

If you're worried about not being able to see fraudulent utilization on an infrequently-used card, use the free Yodlee service to watch all your cc accounts. You can set up email alerts.

I don't understand how they can do this. When you sign up for a credit card, it clearly states the rate. Is there some fine print that says that they can change the rate whenever they want?

IMIKE,

Dormant accounts can also harm you in two ways:

1) The obvious identity theft opportunity. Old account, you moved, company can't get billings to you. Thief maxes the account, you are dinged.

2) The idea of average account age would only be of a concern to somebody just starting out. For most people the overriding issue would be total possible indebtedness. Go for a home or car loan and the loan officer is going to look at your total possible debt load not just the actual. They don't want to have the possibility right after closing a client go on a buying spree and impact their ability to pay them back.

Personally, I close all dormant accounts. I don't want to carry the risk.

@chrisb:

Always.

Yep. I've had a CapOne card with a fixed 4.99% rate for years. I have a few grand in credit card debt that I've slowly been paying back. A few months ago they said they were going to jack up my rates to 13% or so. I followed the instructions to opt out of this, and now that debt will be at 4.99% forever, but I can't use the card for new transactions any more, and when I pay it off, the account will disappear. Their loss! Given current interest rates, they would have been better off keeping me as a customer and changing the rate to 6% or 7%. As it is, between inflation and their overhead, they're losing money on my debt. I have other cards that I use for day-to-day transactions...

Oh, joy! I have an awesome Capital One credit card with a fixed 4.99% rate. If they jack the rate, well, it's time to go card shopping, I guess.

The length of your credit history is an important factor in your credit score.

Is it important enough to be worth it though? Sam Glover and JohnMc make a good points.

Just another example of a crappy company ripping off their customers.

This needs LOTS of awareness in consumer circles.

I recently called Capital One because they added some feature to my card which would allow charges to go through even though they would push me over my limit. While I was on the phone with them and had them disable this new feature, I asked them to lower my interest rate and refund the annual fee. They refunded the fee and lowered my interest rate by 5 percent. I think their willingness to do so had a lot to do with the recent barrage of complains they had from people who saw their interest rates shoot up for no reason.

If you use the card regularly and you have a good history call them and ask them for a break on the interest rate. The worst that could happen is that they say no.

I have a question about dormant credit cards. If you have one, the card expires, and you don't activate the new one, does that close the account? (Assuming you don't have a balance on it).

@Sam Glover:

Well said.

Also, zero-balance credit cards can count against you when applying for a mortgage. You are seen as an accident waiting for a place to happen.

Close the stupid account and get on with your life.

@B:

Not sure that it is tied to the expiration date on the card, but yes, unused accounts will get closed by the issuer without warning. May not happen on traditional Visa/MC/Disc/AmEx, but store cards will drop you like a bad habit.

Dammit. I just logged into their web site, and sure enough, they did raise my rate. Still, it's only 9.9%, which is pretty good for a credit card. Still, it was satisfying to see $0 finance charge for last month. I guess it doesn't matter what the APR is when I pay the balance every month.

My husband's is hanging tight at 6.99%

oh that reminds me, Comcast just sent me a notice that the monthly rental for the crappy Moto DVR is going from $9.95 to $12.95, so I just called to cancel everything except the most basic service seeing how I rarely watch TV anymore.

I would have entirely cancelled all TV service but that would increase the price of their internet service over that of keeping basic local channels (and I can't use an antenna anyway; no signal in my apt).

Capital One got me a year and a half ago. I had 4.99 balance transfer APR and a 4.99 purchase APRs. I transferred ~$10k to the card. I also put, perhaps $1-2k in purchases on the card. Then, Capital One put my Purchase APR on the interest rate treadmill, going up slowly each month and passing 10%. (Honestly, up until then, I didn't realize that my purchase APR was not fixed like my transfer APR.)

I called to complain. They refused to reset it. Any extra payments go to the BALANCE TRANSFER and not the PURCHASE BALANCE, so there wasn't any direct way that I could pull myself out of their trap. So I did something different.

I transferred the entire balance to another card, with a somewhat higher APR. My purchase balance and transfer balance was all gone with Capital One. I called Capital One back. This time, they were willing to reset my purchase interest rate to 6.90% fixed. (Being in a position of strength seems to help with these things.) Not that I was going to use the Purchase APR, though.

Then I transferred the balance BACK to my Capital One card. Everything was at a 4.99% fixed "for life" (or until you default) balance transfer APR. I then have NOT charged any purchased onto Capital One, so they won't play the game of jacking up my purchase APR and keeping me locked in with my 4.99% transfer APR.

I have to say, it was a very clever scheme of theirs to lure you in with a low fixed balance transfer APR, and then to comingle in with a purchase APR that turns out to be adjustable and where you can't pay off your purchase balance until your transfer balance is taken care of. Sneaky!

SUMMARY: If you've transferred a large balance onto a credit card, DO NOT MAKE *ANY* ADDITIONAL PURCHASES ON THAT CARD. You'll be paying the interest (which will end up increasing over time) on the purchase balance, which won't go away until you've cleared out your lower interest rate transfer balance.

SOLUTION: Transfer everything out of the card. If you want to, start over and transfer everything back, but NEVER making a purchase on the card. Not even for an emergency.

PS: MISSDONA -- I suspect your husband may be in a position like me. If you have a low (or no) purchase balance, they'll likely want to hook you in with the lure before they start to jack the rate up on you. If they pull the hook out of the water now, they know they'll get no fish to bake.

@anatak: zero-balance credit cards can count against you when applying for a mortgage

Our bank said they only cared if they were recently (6 months, I think) acquired.

I pay 0% interest. The rates on my cards is immaterial. Pay off the card every month. If you really need to borrow money, go get a loan.

@Rectilinear Propagation:

I would drop my credit score to ZERO in order to give the finger to Chase.

Thanks to this post I noticed that they changed my "4.9% for life" APR to 9.9%.

I called and said that it was a business decision and it had nothing to do with my payment history or account activity. I explained that the business decision must have been to try to screw me out of as much money as possible.

She said that they may be able to lower my APR but not back down to 4.9% to which I answered "no, what I'm doing is transferring my balance today to someone else. Thank you very much."

@beyond: You have a bank that offers a better intrest rate than 4.99% or even 0% for a six month unsecured loan?

I notice a few non capital one cards also jumped. My 7.9 card went to 9.9 just recently too. I think its an industry wide thing.

Just checked, was 9.9, still 9.9 and still says fixed. No notice in the mail.

@mantari:

You could be right, it's a zero-balance account. It had charges in the past, but no revolving balance for several months now.

Golly, I wonder if these mysterious "economic conditions" could have anything to do with the subprime lending meltdown that was set off by the banks themselves.

What's left in your wallet?

I've been waiting for the other shoe to drop on their portfolio enlarging advertising campaign. Just another case of credit card bait-and-switch. I took out a home equity line of credit to get all these monkeys off my back.

Consumerist reports that readers have been writing in today with complaints about Capital One credit cards. They’ve increased their interest rates (APRs) on purchases across the board, affecting a large pool of customers. Here’s a strategy to remedy this situation if it affected you.

Is there any reason to use Capital One besides the fact that they have TV commercials? Do they offer any reasonable service at a reasonable prices?

(Yes, I am a Capital One user, who pays their balance every month and has no need for a limit larger than $3000. Heck, the low limit is practically fraud insurance....)

No letter yet for me. I'm surprised. Better people have received them.

Nothing but good experiences with them for me. My card stands at 4.90% Fixed for purchases/cash/bt. I have the no annual fee Visa Platinum Plus card for several years now. However if I do get this letter, that will change everything, but I like CapOne and will try to fight it with the Exec Team to get the change turned over. Otherwise I will retain the card, too much tenure to just cancel.

I'm going to try contacting them on the phone one more time today. But if this fails, does anyone have contact for their executive customer service?

@strathmeyer: You might want to not assume the limit is keeping you safe from fraud. CapOne has an "Over Limit Fee" where they will allow you to exceed your limit but then slap you with fees for doing so. That is one of the fees that was increasing in the receieved letter.

I fell into the CapitalOne trap by their commercials for "Small Business" and how they care about small companies.

I applied for one of their small business cards and was approved with a lovely limit of $500. (huh? that pays for, um, nothing.) It was 0% APR for a year, so I was ok with it. When the 0% APR expired (last month), the rate jumped up to 24.9%. I knew it'd be variable, but whoa!

Goodbye CapOne, so much for your words about small business. I'm definitely going to check all my other accounts this month.

I just got a letter from Capital One. I so rarely get letters from my credit card companies these days. But this one said something different. They were going to raise the _fees_ on the account, and I could decline and pay down the account at the existing terms.

I'm starting to wonder if it might be good to really lock in my terms now, in case they try to do changes down the road that they say that you can't opt out of.

I am livid. I've had a Cap1 card for over 10 years. My rate was "fixed" at 9.9% and I've never missed a payment. Ever.
Because of this post I checked my mail pile and found the notice from Cap1 that I'm getting jacked.

I'm scanning the mailer and sending it into Ben.
I'll be "opting out", and when I call to cancel my account you can be sure I'll be giving them a piece of my mind.

I feel bad for whatever "Retention" agent gets my call forwarded to them.