Beverly, who always pays on time and recently started paying off her balance in full every month, just saw the rate on her Capital One card more than double, from 13.9% to 29.4%. That’ll teach you to not help sink the economy, Beverly!
She writes:
I recently received a letter in the mail from Capital One informing me that in April they will be raising my APR from 13.9% to 29.4%. I have been with this company for a very long time, have always paid my bill in a timely manner, and for the past few months I pay it off completely each and every month. This is also the only credit card I own, and unfortunately it looks like I’m going to have to close it because I am not going to deal with a company that more than doubles it’s APR on a customer that pays on time and doesn’t abuse the card.
Looks like it’s going to be cash only from now on.
Before you close it, Beverly, you might want to try to negotiate a lower rate. Here are some success stories to help motivate you, although you’ll have to accept that you’re facing worse odds in this economic climate. If Capital One refuses to cooperate, try shopping around for a better card at Billshrink or Bankrate. It’s probably good to keep a credit card account open both for your FICO score and in case you need sudden access to emergency funds.
Update: annab adds,
I got the same notice in the mail a couple days ago and got really mad until I realized they were only changing the default rate. I clearly wasn’t up on my credit card vocabulary, because when I called Capital One to complain, the guy had to explain to me in broken English that it only applies if I’m late on a payment, etc. Not saying Beverly doesn’t know what she’s talking about, but hopefully for her it’s the same situation as mine.
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I have NEVER made a late payment on my Capital One card and now they are raising my rates. Way to go, the government gives the banks more money(which is on us, the taxpayers), then we get to pay more interest on our accounts too. Yes, it sure does pay to be responsible..
I happily closed my two zero balance Cap One cards today. Who cares what it does to my credit? FICO and the banking world are screwing us daily.
I did feel sorry for the woman who helped me close my accounts. She tried to convince me from her script that the cards were still worth it for other reasons. She sounded frazzled and sighed a lot during the call.
What a mess our financial world has become.
I also wonder if this rate increase is a last ditch effort to screw consumers before the new laws hit them.
I got the notice yesterday. My purchase/transfer rate is going from 7.90% to 17.90%! I’ve had the card for close to 15 years and have never missed a payment. Granted, I always pay off my balance in full at the end of each month, so the impact on me SHOULD be negligible, but as a policy, this stinks big time!
i got the same notice (rate has been between 4.9-7.9 ngotiated for many years). I recently paid down my account and received the 17.9 % notice. (Not default- for cash purchases and 24.9 for cash advances) I don’t do the cash advance thing- When I called to complain and clarify that this would not go into effect until April 2010- (interesting -that is the same time the law to protect consumers kicks in)- questioned whether this was ALL Capital One customers- or only the ones with good FICO scores(790) and paid down balances- Could not answer. I encourage everyone to join a credit union (current 8.9% all the time credit card and current 4.9 no fee balance transfer for life of amount transferred. Not only that, credit unions are a coop and you are an owner. My credit union, faced with the same economic realities is not doing this to us, rather finding other ways to address the bottom line, keeping us informed all the way. In addition, they saved Capital One money when after the unfortunate experience of my being pick pocketed and had a Capital One card and my CU credit card stolen (without knowing it)- My credit union picked up the fraud and called me on a Sunday (24 hrs after 200.00 in unusual spending occurred.) I had to notify Capial One- despite the fact $2000.00 in totally bizarre spending had occurred in the same 24 hrs with no one to notice. Of course I didn’t have to pay- but we are all paying now.My credit union is smart (we had to eat $200.00, not $2,000)- They are not. So I will keep my Cap One card and make small purchases and pay them off monthly. I will support my local credit union for anything else. I LOVE YOU PSECU!!!I know I shouldn’t say that too loud because banks fear and despise credit unions and have only tried to drive them out of business.