We’ve been getting a lot of shocked letters from Capital One customers asking how the company can get away with raising their interest rates on their cards when they “haven’t even been late with a payment.” There is, in fact, no such thing as a fixed rate card and credit card companies don’t need a “reason” to raise your rates. They can do it whenever they like.
Reader Chris got a letter explaining that his rate was going from 9% to 29% because of the difficult economy. He wants to know if there’s anything he can do about this.
I’ve googled and found hundreds of other people are posting about receiving the same letters from Capital One as well all with varying rate increases. Some people, if they are to be believed, have had cards for 10+ years and have never been late.
Didn’t Capital One get money from the government? How can they turn around and say they’re raising rates now because of the bad economy if they got a bailout?
Add to that the fact that I don’t want to cancel the card because I don’t have any credit now as it is considering, for years, I paid for everything entirely with cash/debit. Now, in an effort to raise my credit, I’ve been using the card for everything and paying the balance off each month, so I’m not actually paying any interest, but if I can’t pay in full for any reason I’m going to get screwed along with everyone else.
Is there any recourse?
Nope. There is not. Terms can be changed at any time. All the credit card company is required to do is give you 15 days notice, which they clearly have done. The only thing you can do is close your account and pay off the balance.
Answers About Changes to Credit Card Terms and Other Forms of Credit [Office of the Comptroller of the Currency]
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i guess capital one forgot the principles of economics
price up…demand down
i love when businesses try to rewrite science!
I’d say don’t close your account, but just don’t use it.
Here is my best suggestion, pay cash for everything.
If you cannot afford to pay cash; you probably don’t need it in the first place.
If you are trying to build or repair your credit, start with a card and a $250 or $500 limit so you don’t get yourself in trouble. Credit problems are created by the user, not the card itself, but the credit card companies will charge your soul to the Devil if they can get away with it. If they could get cards in the hands of pre-schoolers, they would do it.
I was faced with this same dilemma from several credit card companies.
Never was late or missed a payment, only to have them jack my rate sky high. When I called them they gave me jibberish or offered to lower it for a 6-month period or some other crap. What did I do? I played the shell game and transferred to another card with 0% interest for 18 months. I said bye-bye and transferred the balance the next day.
There is a balance transfer fee usually of 1-3% of the balance being trsnferred but it comes out less than what you would pay for the bump in your interest rate. Great because you are not doing business with the shysters anymore, which is worth its weight in gold to me.
If the new card is giving you 0% interest for 18 months, try to pay off the balance before the end of the introductory terms.
I will never use Citi, Chase, AMEX or Discover again. I don’t need them. I didn’t close the accounts and after not using them for a period of time you will get a letter stating they will close the account due to inactivity (because they are no longer gouging you and making money on you). Oh well! The funny part is after they close my accounts due to inactivity, they send a twice-weekly mailer, sometimes daily, telling me I’m pre-approved or begging me to come back. Fat chance asswipes!
My credit score is sufficient enough to where I don’t have to worry about the credit hit. They are all in bed together, credit card companies, banks and credit bureaus, so what can you do? Interesting, that a person who pays cash for everything is punished by the three reporting agencies, banks, credit card companies, etc., when they try to buy a car, house or whatever. If you miss a car payment or are late on the mortgage, they justify that as a reason for jacking your rate.
The best thing to do is go “green” i.e. cash and get rid of the twats; this being the only true way to fight back.
Here is my best suggestion, pay cash for everything.
If you cannot afford to pay cash; you probably don’t need it in the first place.
If you are trying to build or repair your credit, start with a card and a $250 or $500 limit so you don’t get yourself in trouble. Credit problems are created by the user, not the card itself, but the credit card companies will charge your soul to the Devil if they can get away with it. If they could get cards in the hands of pre-schoolers, they would do it.
I was faced with this same dilemma from several credit card companies.
Never was late or missed a payment, only to have them jack my rate sky high. When I called them they gave me jibberish or offered to lower it for a 6-month period or some other crap. What did I do? I played the shell game and transferred to another card with 0% interest for 18 months. I said bye-bye and transferred the balance the next day.
There is a balance transfer fee usually of 1-3% of the balance being trsnferred but it comes out less than what you would pay for the bump in your interest rate. Great because you are not doing business with the shysters anymore, which is worth its weight in gold to me.
If the new card is giving you 0% interest for 18 months, try to pay off the balance before the end of the introductory terms.
I will never use Citi, Chase, AMEX or Discover again. I don’t need them. I didn’t close the accounts and after not using them for a period of time you will get a letter stating they will close the account due to inactivity (because they are no longer gouging you and making money on you). Oh well! The funny part is after they close my accounts due to inactivity, they send a twice-weekly mailer, sometimes daily, telling me I’m pre-approved or begging me to come back. Fat chance asswipes!
My credit score is sufficient enough to where I don’t have to worry about the credit hit. They are all in bed together, credit card companies, banks and credit bureaus, so what can you do? Interesting, that a person who pays cash for everything is punished by the three reporting agencies, banks, credit card companies, etc., when they try to buy a car, house or whatever. If you miss a car payment or are late on the mortgage, they justify that as a reason for jacking your rate.
The best thing to do is go “green” i.e. cash and get rid of the twats; this being the only true way to fight back.
I don’t think this is a very smart business move for Capitol One. I am so turned off by this CC company that I have been with since the 90′s. I had an automatic charge going to this card which I changed. The small balance I had is now paid off, but I will not close the account to hurt my credit. I am now done with Capitol One. How rude of them, considering my perfect standing. Good thing I did not recently decide to buy computer or some other large ticket item and then they jacked up the rate to such a high level.
Shame, shame.
What a bunch of crooks. We have an outstanding payment history with capital one and have for at least 15yrs. We had an incredible rate, have never been late and always paid more than the minimum. They just jacked our’s up to 17% starting march 2010. We regretfully have a significantly high balance, their is no way we will be able to pay this down in 1 yr. (and they know it)…we are being forced to close our card. Blessing in disguise perhaps? Boycott capital one. Better yet boycot all credit cards. If they force our hand into bankrupcy, as far as Im concerned its their loss. We will recover. Slowly, but surely. The high balance is on my husbands card. Mine will be paid off shortly and never used again. Talk about cutting your nose off to spite your face…if they are offering to fix your current rate by closing your account….get it writing…chances are they’ll turn around and jack it up again if you dont..remember, credit card co’s can and will do what they want anytime they want.
I had the same situation with Citi Card. My interest went from 13% to 29%. I politely called and explained that I’ve never had a late payment, never carried a balance, had a lower interest when my income was next to nothing (college student). After explaining that I’d like to keep my business with Citi, but having such a high interest rate I don’t think that would be possible. They offered me a 9.99% APR and increased the cash-back percentages I receive on the card.
Yeah, I got the same letter. Thank god I pay the balance every month.
I suppose there really is no reason to maintain a very good credit score.
I had thought that there were usury laws in the United States. I was shocked there is no federal limit on credit card interest rate. So Capital One now charging 30% interest is perfectly legal.
I mentioned this to my regular banker at Chase and the manager there overheard this and mentioned had heard a lot of shocking news and seen Capital One’s bizarre behavior too. He said that he thought it could be criminal too.
With that – Even though a lot of television stations advertise Capital One frequently, it may be an interesting idea to considering that people call the station and tell them you will boycott them and their other advertisers if they don’t pull Capital One’s adds.
I also received one of the Capital One “spam” letters. I had transferred a bunch of other credit to Capital One a year ago. I’m looking at the info ont he balance transfer notice it said that my rate would start at 6.9% then one year later (on 4/22/09) my rate would go down to 4.9%—AND NEVER CHANGE. Well guess what, the terms to decline the changes in this recent letter state that if I decline the rate increase (to 17.9%) my card would be closed as of April 17, 2009. Isn’t that ironic? Plus, looking back at my statements as of one year ago they added a clause (in fine print) that they could close my account at any time for any reason (snuck it in in the section about the customer having the option to close the account at any time). Shouldn’t this have been disclosed in some way other than fine print in a statement? Good luck with getting them to keep your rate. I spoke to “Ian” and after his confirmation that I had excellent credit with Capital One and that this was just a result of the economy, I got no where. (By the way I am sure his name is “Ian” since I was obviously speaking to someone in India). So adios Capital One, you’ve lost a customer who will never deal with your company again.
Okay
me and several others are getting calls from our credit card companies (cap one included) telling us there has been “unauthorized activity” on our accounts but are refused an explanation as to who it was that did it. They are sending us new cards with different account numbers then raising our rates 3 or 4 weeks later. Capital one did this and so did Bank of America, anyone out there who knows whats going on?