Mike and his wife are backpacking their way around the world, and like a smart consumer, before they left he looked around for a credit card without a currency conversion charge. Capital One is fee free, which in theory makes it ideal for travel. In reality, there are hidden costs, and they’re called human stupidity and random interpretation of the rules. As a consequence, he’s “pre-paid” $6,000 onto a Capital One card that has been red-flagged and frozen, and Capital One refuses to budge—even though they acknowledge there are notes on the account that indicated he would do this before he did it, and even though they’re the ones who told him to pre-pay.
The problems began when Mike discovered his new card would have a credit limit of $1000, far below what they’d need for such a long time away in multiple countries. Capital One wouldn’t increase the credit limit, but they told him he could pre-pay above his limit—in effect, turning it into a Capital One-branded debit card.
Before he did any of this, he verified that it was allowable, first via the enrollment agent when he applied for the card and then again when he called to activate it. But when he tried to pre-pay online, the transaction was rejected, telling him: “You are only allowed to transfer up to 110% of your current balance. Your current balance is $0.00.”
I once again called Customer Service, dreading the hold times and quality of service that I would surely be in store for on the day after Christmas. I slowly and carefully explained everything: the trip, the limit, the conversations with earlier reps. The agent told me that if I wanted to pay an amount that was more than 10% over the current balance, I would have to mail them a check. It couldn’t be done on the website or over the phone.I again asked for a higher limit, and was told it would come naturally when the time was right. When would the time be right? “Oh, that varies.” Varies? Like what? Months? Years? “Oh, it should probably happen within a year.” Giving up hope of a higher limit and now wary of believing what the reps tell me, I went over the plan step by step: I would write a check for $6000 and mail it to the address he had given me. A few days after it arrived, I would be able to charge up to $7000, using my credit card like a debit card. He confirmed all of this, but I still insisted he make a note on my account and read it back to me. I also spoke to the Fraud Department, repeated my whole life story, and begged them not to place a hold on my account if our travel looked like suspicious activity. I started to enumerate the dozens of countries and expected dates, but he cut me off and said he would make a general note that we were traveling.
Not the most comforting CSR interaction, but Mike mailed in the check and hoped for the best. A week later, his card is rejected in Costa Rica. The reason?
[The account specialist] told me that a $6000 deposit on a zero balance was a huge red flag, and there would be a mandatory hold on my account. I started to explain everything, but he cut me off: “You have to understand, there are rules. I know you wish you could make the rules, but these are Capital One’s rules.” I was rather upset at being talked to like a fifth-grader, but I set that aside to focus on the matter at hand: how could I get the hold removed as quickly as possible?I spent the next hour talking to him, his boss, the guys in Fraud, and even the fancily-named Account Supervision department. They all confirmed that: (1) Yes, the notes from the December 26 call clearly show that I did exactly what the rep had told me to do, (2) Despite that, this was still my fault because I shouldn’t have listened to him, and (3) There was absolutely no way the hold would be removed.
Mike’s biggest problem is that he got the Capital One card at the last minute—which is one reason he wrote in, to make sure other people who attempt the same money-saving tactic give themselves six months or more after opening the card before they try to pre-pay:
Some final tips for anyone who might be planning a similar trip:
- Definitely shop around for a card with a low or nonexistent foreign currency fee; it adds up!
- Get the card as far in advance of the trip as possible. I was told multiple times that if my account had been more than six months old, they might have been able to work with me, but as a new customer I was screwed.
- Once you get the card, use it enough that they raise the limit, so you can avoid everything I’m going through.
- Add someone back home to the account so they can act on your behalf.
- Consider doing all of the above with multiple credit cards; it’s not likely that they’ll ALL leave you high and dry on New Years Eve.
If you live in a state where it’s legal to record your customer service calls, you should consider that as well, so that you’ll have evidence to help persuade the company to take responsibility for their CSR’s promises.
(Thanks to Mike!)
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@Roosh: The reason for the prepayment was not the inability to make payments, it was the low limit. As has been pointed out in this thread already, you can easily spend past the $1000 limit in one stop on a trip like this. If this post was about them having an emergency and not having money because of the $1000 limit, all the comments would be saying he fumbled by not making sure he had a higher limit in case of emergency. He was being prepared, and I can’t find any fault in that.
@JustAGuy2:
Looks like someone still lives at home and doesn’t know anything about the real world.
AS far as I am concerned the company is commiting fraud. There was a verbal agrrement that was made and a record showing that this agreement was made and at no time was capital one’s rules stated or requested that the consumer was to follow any such rules because of this he should be rufunded his money and the hold should be taken off his account. This would be the proper procedure and it is up to the card company to remove the hold. Whether it be there rules or not. So the line they gave him was crap and he should fight this in court. The company did not make themselves clear and therefore should be held liable.
Rule #1 – Always be wary of companies that spend millions of dollars to tell you how much money you’ll save.
@Roosh: And that’s when the keylogger/spyware in the insecure internet cafe computer sends your login info to Russia and you come home to find no money in your account.
My wife and I went to Italy in November and found that USAA’s credit cards are awesome for travel. Not only was it no issue at all to get the card approved for our travel dates (a quick 10-minute phone call did the trick), but they also don’t assess any currency conversion fees beyond the 1% from Visa or Mastercard. Given the insane fees charged for currency exchange and the ubiquity of credit cards over there, it was a total no-brainer as to how we’d pay for everything.
@melanie.dawn:
And how exactly would you get that idea? Been living very successfully on my own for 15 years now, but thanks for checking.
Don’t know how the OP ended up with such a low limit – my first credit card in college was $3k or thereabouts, if I remember correctly, and that was 10+ years ago…
I’ve said it before, and I’ll say it again — Capital One sucks. I wish they’d go bankrupt already and die a particularly horrible corporate death, but considering the new ads they churn out with alarming frequency, they still seem to be luring in the gullible.
As an attorney and credit card expert… let me go on the record by saying that creating large credit balances is very risky. Chase, for example, will shut you down almost every time.
This is due to scams where the account is overpaid with daisy-chained bad checks, and the CC company cuts you a check and you go back to Nigeria before they figure out what has happened.
Although the CSR might have said it was ok, it’s the FRAUD DEPARTMENT who will flag and freeze your account.
So if anyone can take anything from this… it’s DO NOT CREATE LARGE NEGATIVE BALANCES on a credit card.
And yes, travelling overseas puts you at risk for having your identity stolen at an internet cafe, but maybe auto-pay every 10 days is a better option. Otherwise just take a pre-paid card if your credit limits are so low.
They only offered him a 1K credit limit? That sounds almost as bad as what Chase offered me on my first credit card. I was so insulted by their limit that I refused to use it, instead I went with what Wachovia had to offer and they sure did offer me more. Very flexible, within a couple months I had ‘an emergency’ and needed to bump my credit limit. They said they could raise it from 2K to 8K without authorization from higher up, but I needed more so they worked with me for around 45minutes on the phone and bumped my credit limit to 12K. Very easy to deal with, next time you plan a trip of such magnitude that requires 6K in spending see what Wachovia has to offer. It might not be as good, but they’ll probably be more willing to work with you.
@Crazytree: I believe this person talked to the fraud department as well and they said it AOK too.
@Roosh: The Bank’s card is the one WITH the fees, it’s the credit card that had none, hence the overstocking the limit that he tried.
@Crazytree: So in other words, you can’t even call in and talk to a rep who works for a company? Unbelievable. So who DO you suggest we believe when we have a problem with an account with a company?
Avoid like the plague any of the credit card companies that fill your mailbox with offers of credit. My son, age 19, gets an offer from Capitol One every other week, like clockwork. He isn’t biting.
Yeah, I JUST did this. Ordered a Capital One card for overseas travel, expecting a decent limit since my credit score is very high, and got a card with a $500 limit and no way to increase the limit.
I basically just opened up a worthless line of credit. If I’d known they were only going to give me $500 I wouldn’t have opened it at all!
Sounds like fraud to me. I’d file charges and a lawsuit when I got back.
There’s yet another reason why I don’t and never will again have a Capital One credit card. About 6 years ago they messed up on a direct payment I made, then promptly lowered my credit limit below my balance, and started telling me how I was $xxx.xx amount over my credit limit. After the Clown College level of Customer Service I went through, I did a balance transfer, sent their customer service department a picture of me giving them the middle finger, and never again looked back at them.
The irony is they repeatedly send me offers for a credit card, despite numerous attempts to have myself removed from their mailing department. I now use them to line the bird cage for bird poop.
@KJones: That’s why you buy TC in the currency of the place you’re visiting, rather than arrogantly assuming that your personal currency will be accepted. It’s not difficult. When you order the TC you get to pick your currency of choice.
UPDATE: It’s all better now: [spothopping.com]
While the rate might be higher on my bank’s card I’ve never had issues like this when traveling outside the country. Same with the debit portion of my card which is an actual debit, I know Wells Fargo isn’t perfect but they’ve been good enough to me so that I don’t close all my accounts right now and switch to Wamu. For now having an account at both banks works good enough for me.
What’s really frustrating about CapOne is that, while they offer very very very low initial credit limits (I started at $250 when Providian (now WaMu) was offering me $2000), later when you don’t use the card but don’t want to cancel it and take the hit on your credit report, they incessantly raise your credit limit (often against your wishes) to get you to use the card. Which further affects your credit score, because you can end up with more credit than your ratios allow.
I wish I had never gotten my CapOne card to begin with.
Banks are bad about credit cards and customer service. I often buy cars online and travel to pick them up at the last minute, so my AmEx will see little use for months, then suddenly pick up a one-way flight and a bunch of hotels, meals and gas in random cities on my path home.
Every time I’ve done this, I’ve called AmEx, informed them that I will be doing this, and would they please NOT flag my card as being stolen? They always agree to note my travel plans on the account – and every time, within the first 12 hours on my way home, they put a fraud alert on it and freeze my credit.
It is incredibly obnoxious. My phone calls the day before the trip clearly fall on completely deaf ears, every time. I know that, after a couple of gas purchases, the third or fourth stop is going to be denied and I’m going to have to make a phone call and answer a bunch of security questions. I suppose my purchases just don’t fit within their parameters but you would think, when they say “We’ve noted this on your account and you will have no problems, enjoy your trip” – you would think they would be telling the truth instead of a bald faced lie.
Aha, I’ve had to stay a perfect customer for eight years for Capital One to increase my limit from $1000 to $3000. (I’ve asked them for an increase, but every time they tell me that they don’t give increases because customers ask for them, but instead review accounts periodically and increase limits.) I did indeed pay my bills online, and they indeed don’t allow you to pay more than 10% more of your bill, which meant I always maxed mine out. I lost my card two months ago and apparently this obliterated my online account and not amount of Capital One barely speaks English faux customer service can restore it. Luckily I still get paper bills (Capital One was always a little screwy so I knew I may need them someday) so I’ve been sending them checks but the haven’t been clearing my bank account. Now I have a bill for $3125, and the best action I can think of is to just send the whole amount to Capital One, hope they cash it, and never use the card again.
Not to mention the odd, frequent freezings of the card (a dozen or so times over the eight years.)
Either way, with all the TV commercials and the fact that they only give high limit to risky customers, Capital One seems to really have this money making thing down pat.
picantel: They’ve actually started reporting the real limit, finally.
Your card has probably been locked by Visa, NOT Capital One and let me explain why.
Let’s look at it from Visa’s point of view..
1) you got a brand new card
2) shortly after getting the card (and before using said card) you pre-paid 600%
3) the first time you use the card is outside the U.S.
The above combo is high-risk/suspicious activity, and you just set off a homeland security type flag. Credit cards are pre-loaded this way to purchase illegal fire arms, to fund terrorist activities, etc.. b/c it’s potentially less suspicious than carrying large sums of cash outside the states and “temporary” storefronts are setup so that transactions look legit. Thus the credit companies monitor the type of activity very closely. Most likely, a thorough investigation will have to be done before your account is released, and this isn’t an investigation by Capital One.
Chances are, the reason no one at Capital One told you that this might be a possibility is b/c Capital One most likely has nothing to do with the hold that’s been placed on your account. As a side note, and in all seriousness, be prepared to be thoroughly searched when you return to the US.
My mom’s capital one card got stolen in the mail, on the other side of the country. So my mom had no account number or anything.
After the fraud department called her, my mom spent a week on the phone with captial one, and then they sent her a letter that all the charges were cleared. A couple of weeks later, they called us again, and told her that they reopened the file because some person in the department decided that there was not enough proof that it wasn’t my mom who used the card. Even though the phone number the person activated was out of province (Quebec!), all the names of places that the card was used had french names, she still had to pay part of the money back.
Although, I’d like to know how this person was able to activate the card in Quebec, while we live in Alberta.
As someone who currently lives in Europe for work, I feel the pain. I have a Capital One Platinum Visa card that I got last year for overseas travel. It is my go-to card here in Europe, and hasn’t failed me yet in the past 4 months.
They only gave me a $5,000 credit limit when they approved me for the card, and refused to increase the limit when I called in through the regular channels, giving me the regular song and dance of “We are a conservative credit card company and will give you regular credit limit increases through our account reviews.” (Also, if you are a Capital One customer, you would know that they filter your calls through a low-level CS department before they send you off to the actual Account Service representatives who can do stuff for you).
However, I recently called and had my $5,000 credit raised to $10,000 through a special department called Consultative Sales. The purpose of this department is to improve the services on your current Capital One card (i.e., credit limit increases, better balance transfer offers, etc). This number is 1-877-513-9959.
The other number that takes you directly to a Account Services Specialist (most of them have “senior” in their titles, and many of them are supervisors.) Call this department for lower interest rates and other routine maintenance issues with the account (disputes, etc). That phone number is 1-800-889-9939.
So do yourself a favor and avoid the regular phone number on the back of the card. Call these numbers for faster and better service. These individuals are empowered to help you out.
@jimconsumer: So true. They should just tell you, “Well, unfortunately we run on obsolete banking systems and outdated risk modelling formulas, so you’ll probably be automatically blocked, and there’s nothing you or I can do about it, sir. It’s best to bring a battalion of credit cards (that you’ve called in about beforehand) and risk them out purchase by purchase. Does that answer your questions? Then have a good trip!”