Why Can Capital One Raise My Rates Just Because The Economy Is Bad?

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]
(Photo:skittlebrau)

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  1. Blueskylaw says:

    How come when economic times are good for Capitol One I don’t get a slice of the profits or bonus payments?

  2. flyboyJ says:

    This is quite the double edged sword – if you close your account its going to adversely effect your credit too .. by way’s of lowering your overall available credit but it’ll still show you owing the same amount …

    • Jefeweizen says:

      @flyboyJ: Not necessarily! I closed my account with these jokers and my score went +18.

      There’s an argument that leaving them just plays right into what they were trying to do in the first place. I don’t care, they lost my business – forever. And anyone else I can convince, too. Family, coworkers, etc. I’ve already gotten two others to leave.

      Yes, it’s a business. But I’m a consumer, and I have the right to take my business to another provider that treats me better.

    • kbarrett says:

      @flyboyJ: Disagree.

      Credit rating = sucker rating.

      Strive for a credit rating of zero. Pay cash. If you want a home, rent, and put the payments in an interest bearing account instead. When you have a wad of cash, go shopping for a foreclosure to buy out.

      • David Brodbeck says:

        @kbarrett: I don’t think I’ve ever rented an apartment without having to submit to a credit check. Wouldn’t a credit rating of zero make it awfully hard to find an apartment? Or a job, for that matter, since some places do credit checks for employment now?

        It’d be nice if your credit rating only affected getting a mortgage, but we don’t live in that world anymore.

  3. Anonymous says:

    I have a similar situation too with Capitol One. I’ve been a customer for nearly 15 years of theirs and had a few cards with them. I’ve NEVER been late on any payments and recently got a letter stating my rate was going up to 25%. When I called to get my lower rate back they gave me lines of bull**** and after a few transferred calls to higher ups they still wouldn’t change the rate back. I just paid off their cards and cut them up. I will not use a Capitol One card again!!!

  4. trekwars2000 says:

    If you don’t have a balance it really doesn’t matter does it?

    However, that said, I know things happen and it does suck. Didn’t the Gov’t pass some law (that goes into effect in Summer 2010) about the fact that CC companies can’t raise int. rates on balances already charged? If I am remembering that correctly then I think all the CC companies are trying to get in the increase in rates before the law change.

    • lalaland13 says:

      @trekwars2000: That’s kind of what I’m thinking as well. It’s like the groom cheating on his fiance before the wedding day. OK, not really. But they’re bumping me up from 15 percent (which is not great anyway) to 22 percent. I would cancel them and get another card, but I’m going to try to avoid getting any more credit until summer 2010. Besides that, I have a pretty short credit history, so I doubt I’ll have credit card people banging down my door begging for my business.

    • Jefeweizen says:

      @trekwars2000: “If you don’t have a balance it really doesn’t matter does it?”

      Wow. Just… wow. I bet you’re one of those that doesn’t mind all the surveillance cameras going up. After all – if you aren’t doing anything wrong, you have nothing to hide. Right?

      Ok, so you don’t carry a balance now. What’s the point of a credit card? To leverage debt you don’t have. Sure I pay it off every month, but what if something happens and I need to carry a balance for a short time. For a reason like, I dunno… a “bad economy”?

      I’ve done all the right things to be a “good” customer and maintain a low interest rate. This company is getting tax payer money to save their lame hide.

      Sounds like we’re getting it from both ends.

      • Elcheecho says:

        @Jefeweizen: i don’t see what’s so wrong with that statement. I don’t care if my rates go up either. If something happens and I need cash, that’s that savings is for, with no interest. If I have a few weeks before I want to buy something big, I’ll open up a new card with 0% for 12 months. Either way, doesn’t matter what the rate on my current cards are.

        i do agree that Capital One is evil, if only for their part using bailout money.

      • Colage says:

        @Jefeweizen: Please. He never said that carrying a balance is “doing something wrong.”

        Since you asked the point of a credit card if you don’t carry a balance: I use my card in my daily business and to pay bills, pay it off each month, and keep the airline miles. There’s a pretty good reason right there.

        Yes, if you carry a balance and your rate increases, it’s going to hurt. But it doesn’t matter whether someone pulled out their Capital One card to pay for a medical bill, or groceries, or a new handbag, the company didn’t make them carry a balance. And when it becomes more expensive for Capital One to lend money, it’s going to get more expensive to borrow it.

    • wiseoldduck says:

      @trekwars2000: I think that bill is this one: [thomas.loc.gov] and my interpretation of that page is it passed the House last September, but the Senate has not done anything with it. I could be missing something. It looks like an excellent bill to me, and I can only imagine what is going on behind the scenes to make sure it doesn’t see the light of day in the Senate. I’m going to go ahead and send a note to my Senator, since that is what we plebes are supposed to do about these things when we get all riled up.

  5. Anonymous says:

    I’m not saying that it’s fun having your interest rates go up but, like insurance, credit card rates have to factor in risk. My USAA card was just raised 2% and, while that’s a bummer, it’s happening because they charge me very little interest to begin with (was under 6% before) and they want to stay in business in a less secure economic climate.

    I understand that there is the possibility that a credit card company can use the circumstances to gouge its helpless customers who can’t afford to pay off the balances quickly but it’s not automatically the intent.

    • theblackdog says:

      @QuenbyCat: At least USAA is being reasonable about it, however, I am hoping I can convince them to give me a lower rate when I get my balance transfer paid off. When I did the transfer USAA offered me 0% on a balance transfer for a year and prime rate + 3.9% on purchases. At the time it meant 7.9% to my other CC, at 13.99%. Well now that I am closer to paying it off, my other card has dropped to 10%, but USAA changed their terms for me to say the absolute minimum is now 9.9%. So what’s the point to using their card as much if they’re at the same rate as my old card?

  6. donjumpsuit says:

    I can’t believe they took all of us. They lined their pockets with 10k credit limits with 5% APR. They traded our debt for pennies on the dollar when times were good. Now they are drowning in the muck they caused, and they think that squeezing $30 a month out of me in finance charges makes it all right.

    I will remember companies like you when times are good and make sure to avoid or use you to MY advantage whenever I can.

    • Colage says:

      @donjumpsuit: Is it really all Capital One’s fault? Granted, they should have been more judicious in who they gave out credit cards to, but it’s hardly fair to hold blameless the people who actually went out and spent money they couldn’t pay back.

  7. gparlett says:

    Credit card companies (even the ones that protect us from marauding vikings) are EVIL. Why is this news to anyone at this point? However, these are the terms you agreed to when you signed up for the card. If you ever read the fine print it’s right there. All you have the power to do is stop using the card and cancel the account if they change the terms to something you don’t like.

    • jake7294 says:

      @gparlett: Why are they evil? I don’t get that…is there a law that mandates a company to lend you money and then slowly pay it back over time. They are not a non-profit, they are in it to make money. If you don’t like it, cancel the card. You’re under no obligation to keep the card, and they are under no obligation to grant you credit.

      • matt1978 says:

        @jake7294: Another poster with some common sense. It’s a credit card company, not the good-time-buddy club.

      • Anonymous says:

        @QuenbyCat: @Colage: @jake7294: There is a reason that people who pay off their balances every month are called “deadbeats.” They are evil because they’ve helped to promote the debt lifestyle and then gouge their customers when they’re down. They should not be allowed onto college campuses.

  8. matt1978 says:

    @Blueskylaw: Because it’s a business. McDonald’s doesn’t give you money for eating there, do they?

    • howie_in_az says:

      @matt1978: McDonalds, to the best of my knowledge, hasn’t received untold billions of dollars in tax monies as a reward for completely screwing up the economy by issuing variable rate, fee-laden loans to people that had no chance of repaying those loans.

    • tc4b says:

      @matt1978: McDonald’s didn’t get any TARP money. See, CO is happy to have my help, as a taxpayer, when they run their ‘business’ into the ground, and, given this, I also think they’ll owe us dividends when and if they’re ever in the black again.

      They’ll be required to do so, actually, under TARP II (or whatever it’s called now), but under the first TARP, they won’t owe us a cent.

  9. AllanG54 says:

    I got that same letter but I don’t care because I haven’t used the card. I carry it with me but I use my Discover and Amex for everything anyhow. So, even though it’s “in my wallet” they’re not making any dough off of me.

  10. trellis23 says:

    At least call and complain. Threaten to cancel and go somewhere else. I’ve had CC lower my interest rate simply by calling and asking them too. Other people I know have had to threaten to cancel, and got their rates lowered. I’m sure they are expecting to re-lower some of them, and take advantage of the ones who don’t bother to call. Why wouldn’t you at least ask? The worst that can happen is they say no.

    • Jefeweizen says:

      @trellis23: And they are saying no. Every person I know who has called them to complain about the rate hike, including myself, was told “sorry”.

      I was actually shocked at how easy it was to cancel. Probably the most painless cancellation I’ve ever done.

      • crashfrog says:

        @Jefeweizen: They want you to cancel. They’re trying to get rid of liabilities, and your unused credit is a liability.

        AMEX is paying people to close their accounts. These high interest rates are a similar situation – they want you to cancel. Of course they’re going to make it easy.

      • West Coast Secessionist says:

        @Jefeweizen: My wife called Cap One when they sent us that bullshit “OH NOES THE ECONOMY IS SO BAD WE HAVE TO INCREASE YOUR RATE BY 15%” pamphlet.

        They lowered it back to what it was before.*

        *But it was apparently a “promotional” rate or something, rather than actually changing the rate back because they told her it would “last until” January 2010 or something.

        No matter, we won’t use the card anyway now that we know we can’t trust them. When they raise it again, we’ll bring down the axe.

  11. gertymac says:

    Captial One did this to me also, after refusing to raise my limit past $500 because my card is a “high school student” card. Which it is, because I got it when I was in high school…8 years ago. But I digress.

    Solution:
    1. Get better credit card with higher limit and lower rate from credit union.
    2. Stick Capital One in safe box under bed, only using a couple times a year to make sure they don’t magically close your oldest accout.
    3 PROFIT.

    • xip says:

      @gertymac:

      Haha. I had the same problem with Capital One back in 2002. They refused to decrease my interest rate below 19.9% because “it’s a student card.” It didn’t seem to matter to them that I had two other cards with 8.9% and 11.9% APRs. I asked them how I could convert it to a “regular” card, and they told me that I couldn’t. I immediately asked the guy to cancel my account, and he gave me the usual crap about it hurting my credit score. But they actually let me cancel it as opposed to giving me a better rate.

    • b.k. says:

      @gertymac: I like your moxie. In fact, I followed that very same formula just last week.

  12. Anonymous says:

    I would imagine they need to reduce their risk exposure and revolving credit needs so they’re trying to encourage people to pay off their balances to raise capital and so they can close accounts and reduce their credit needs. That’s right, when you pay off your whole balance, they might just close down your account.

    It’s really a double edged sword – you’ll pay huge interest fees unless you pay off the whole balance, but at least you’ll have credit. If you pay off the whole balance you may find your account closed and then you won’t have any cash or any credit.

  13. ReverseCarpetbagging says:

    If you close your account, do you have to pay off the balance in one chunk or can you pay it off according to your old terms?

    • techstar25 says:

      @ReverseCarpetbagging: If you close the account, it will keep the old interest rate. However they only give you a certain amount of time to choose that option, usually 30 days from receiving the notice of the new terms. I did this with my Wamu card.

  14. PencilSharp says:

    And this brings us to a valuable lesson about economics:
    Businesses do not exist for altruistic reasons.
    There is not a single bank in the country that doesn’t follow this list of priorities when it comes to finances:
    1. Shareholders
    2. Shareholders
    3. Executives
    4. Shareholders

    BTW, CapOne has always been the scumbaggiest company with the best ads; FreeCreditReport is a very close second.

    • Tiber says:

      @PencilSharp: Shouldn’t executives be at the top of that list? Is giving themselves golden parachutes when the company’s about to be bought out or go under supposed to be in the shareholder’s best interests?

      • PencilSharp says:

        @Tiber: Mea culpa. I meant responsible companies. Obviously, if your execs’ pay is a national headline, you should swap #s 1 and 3.

    • Jefeweizen says:

      @PencilSharp: You are right. What I don’t agree with here is the vitriol thrown at customers who don’t like the rate hike and leave. They have as much right to complain and go elsewhere as the companies do to jack up the rates.

      The screwed up thing with all of this is the credit score factor. If people are forced to take a higher rate because their score might drop if they leave – that’s fleecing. Pure and simple.

    • Elcheecho says:

      @PencilSharp: don’t forget lifelock. they’re sometimes fun

      • PencilSharp says:

        @Elcheecho: Anybody who has to kill thousands of fake credit cards every month because he flashes his SSN on nat’l TV so he can charge for free stuff is fun in anyone’s book.

  15. warf0x0r says:

    I just got a new card. So, Capital One, now that you’re charging me 17.9% instead of 8.9% I ask you:

    What is 17.9% of 0 each month?

    • tonberry says:

      @warf0x0r:
      these are the exact same rates for me, I am currently at 8.9% and moving to 17.9%. the letter is somewhat misleading too, as they claim the apr hike takes place in april, but also says something about 01/28/09 rates.

      I called them and was told that it was nothing i did, and that the new apr’s go into effect in may, when i asked if anything could be done he offered to keep my rate at the 8.9 until october, but in the middle of the rep doing this we were mysteriously disconnected, and i really did not feel like calling back. so i will just continue to pay off the card every month, and thew can screw off!

  16. Eric1285 says:

    Looks like they’re taking a cue from Citi. I have a card with Citi and they raised my rates from less than 10% to over 15%. I’m working on paying it off completely, and then the card will sit in my drawer. I’ll break it out once every 6 months to buy a stick of gum or something to keep the card active for the sake of my debt/credit ratio, but other than that Citi will have lost my business. Dumb move on their part, as I’ve had a bad habit of always keeping a hefty balance on my card.

    • La-la says:

      @Eric1285: I also had this happen with Citi, but I have never carried a balance. It is my oldest card though, so I have just almost entirely stopped using it instead of canceling it. Is there any chance that having a crazy high APR on that card can adversely affect my credit score or ability to get low rates on future offers?

  17. 1stMarDiv says:

    This is exactly why I pay my balance off in full every month – it’s kind of like my way of sticking it to the CC companies. They can raise their APR to what they like, but they won’t get a penny from me.

    • Jefeweizen says:

      @1stMarDiv: Dude, every time you use your card, they get money. Transaction fees.

      • MrEvil says:

        @Jefeweizen: I cannot find any source of information that says that this is the case. The bank that issues you the credit card gets absolutely NOTHING of the transaction fee. The transaction fee goes to the network (visa/MC/AmEx/Discover) and the store’s merchant processor and the bank that holds the merchant account. The only way the financial institution that issued you your credit card makes any money from the transaction fees is if their merchant bank is the same as your issuing bank.

        This is the bargain banks make with Visa and Mastercard, Visa/MC provide a network of accepting merchants and make their money on that end, while your bank makes their money off of interest and other fees.

        Your bank also doesn’t make any money off your check-card either. Though they do save money because each time you use the check card is one less paper check they have to process as well as one less visit you make to a teller. Whatever expense the banks incur in issuing the check cards is a pittance compared to what they aren’t spending in check processing as well as staffing.

        • lpranal says:

          @MrEvil: excellent point. Not to mention, if you use your card 10-15 times a month, they’re probably barely breaking even on you anyways. I’m sure they would much rather see you carry a fat balance. Here’s to zero balances, btw, as i’m officially zero balance as of today!

    • David Brodbeck says:

      @1stMarDiv: You’re not really “sticking it” to them. They still rake in merchant fees on everything you buy with the card.

  18. bohemian says:

    Hi, I would like to extend you a loan of $8000.00. But I reserve the right to change any of the rules however I feel like after you now owe me the money.

    If someone approached you with this deal would you bite? I wouldn’t.

    • Etoiles says:

      @bohemian: That is, in fact, what is now happening with a very large student loan I owe. And it’s a hell of a lot more than $8000. I think it is not coincidental that the same week the Boston Globe published a story about the organization’s impending insolvency, they raised my interest rate 3.5%. (And they hung up on me, literally, when I called to discuss it.)

    • crashfrog says:

      @bohemian: Well, think about it for a second. Nobody who didn’t need $8000 right then would take your loan, regardless of what terms of repayment you offered. And anybody who does need $8000 right then will probably take your loan at whatever terms you offered.

      Now that the laws against usury are essentially suspended, there’s no appreciable difference between credit card companies and loan sharks.

      • David Brodbeck says:

        @crashfrog: Well, except for the collection procedures. The credit card companies can sue you and garnish your wages, but they won’t send someone over to break you kneecaps. ;)

        • crashfrog says:

          @David Brodbeck: “Awful nice credit rating you got there, probably let you get a nice job and an iPhone, or rent an apartment. Be a shame if something… happened to it.”

          • David Brodbeck says:

            @crashfrog: Heh.

            I fervently hope that all the foreclosures going on will screw up the credit scores of enough middle-class voters that we’ll finally see some of the more ridiculous uses of credit scoring banned.

  19. Anonymous says:

    Capital One doesn’t care. They don’t even want our business anymore. We got the same letter – going from 9.99% to 19.99%. When I called to close the account I got an automated system and only had about 3 steps to close the account. Huge change from back when credit cards wanted customers. Back then if I tried to close an account I would have to go through 2-3 people on the telephone who would all try whatever they could to talk me out of it. Good bye and good riddance to Capital One!

    • b.k. says:

      @HaydenEsphodel: The letter all but begs you to close your account! Which makes me laugh, as I’d just paid off my balance and plan on not using the card any more.

  20. astraelraen says:

    Its funny to see all these articles about CC companies raising rates/cutting balance limits, etc.

    If you go apply for a new Capital One card they will give you 9-12 months 0% interest on NEW purchases. That’s a pretty good deal in this economy.

    I just left Citi who raised my rate from 7.4 to 17%. Its funny how the companies can “afford” to raise rates on so many long-time customers, then turn around and offer 0% for new customers.

  21. matt1978 says:

    @Blueskylaw: Nobody posting here is going to see a dime from any TARP. That’s how the
    world works. In the red, black, blue, green whatever. You can call it whatever buzzword you like, but the day anyone reading this and getting ready to comment gets extra scratch from Cap One or any CC company, is also the day that McDonald’s gives out shrink-wrapped dollars with the Happy Meals

  22. Heather Russell says:

    I just got a letter from Capital One about my interest going up to 29%. Needless to say I will be paying off my balance and sticking the card in my freezer, I might use it once every few month to buy a cup of coffee to keep it active. I’m glad I paid the bulk of my balance off with my tax refund.

    I don’t get why these banks who are getting bailed out by our tax payer dollars are turning around and screwing us while their CEOs continue to run the companies into the ground from their private jets while sipping Cristal.

  23. Anonymous says:

    “The only thing you can do is close your account and pay off the balance.”

    Or just stop using the card (whether you close the account or not). If you use the card and pay in full each month, Capital One still makes money off your purchases via merchant fees. If you really want to send a message that the interest rate increase is out of line, pay cash.

  24. codefreez says:

    This happened to me too. My Capital One card was my first (got it while I was in College,) and I actually stopped actively using it a long time ago when I got a better card through my bank, so I had been meaning to dump this card for awhile, despite the hit my credit score might take (I’m not buying anything big for a little while anyway.)

    When I got this letter, I was pretty appalled, so I called customer service (not the opt-out number) and told them I thought it was stupid considering my income and good credit history, and that I wanted to opt out. They made several offers to lower the interest rate (although not to its original level,) and I ended up opting out of the change, meaning the account will be closed.

    In the meantime, I got a new credit card (with better benefits) that might actually become my default. My score might dip a little, but my life is better without Capital One sending me those stupid “convenience checks.”

  25. Anonymous says:

    Ya’ll should do a how to article on transferring old balances to new cards with better rates. Or paying off old cards and finding new ones with the best deals. Cheat the system en mass and *&@% those lazy ^@#$%#’s. This screw the loyal costumers but do anything to get new ones has got to stop. You hear me comcast, news papers, credit cards! Thats just not right.

  26. econobiker says:

    Why can’t -I- change the terms with them with a 15 day notice?

  27. Pixelantes Anonymous says:

    Why does the interest rate matter if you always pay off the balance anyway?

    • Craig Woods says:

      @Pixelantes Anonymous:

      Because the credit cards are banking on the fact that someone will lose their job or fall on financial hard times and have to carrying a balance. And they same people who don’t carry a balance are the same people who will likely not close their account for fear of damaging their credit history.

  28. mantari says:

    Platinum card. 7% semi-fixed APR going to 16% variable, and then a potential 29% default APR. Special balance transfer rate of 5% will remain unmodified.

    Still, I don’t like it one bit.

  29. TouchMyMonkey says:

    My rate was increased to 17.9%. I am 46, have a credit score of 840, and have had my Capital One card for five or six years. I called the 800 number and declined the increase. Fuck them for the insult; 17.9 is what a college student or a single mom might get. They’re totally pissing off the wrong people.

    Oh, and before you all remind me of how bad this move is for my FICO score, don’t bother. I am sure I can afford it.

  30. kwsventures says:

    If you read your credit card contract that you agreed to when you accepted that card, you will notice that the credit card company can raise rates, cut credit limits and cancel you at anytime. Understand having a credit card is not a constitutional right. If you have your fiscal house is in order, you can live without a credit card. If you need a credit card to survive, you have more serious problems to fix.

  31. tz says:

    I’m paying my balances off, but this is why I filled up my credit union account and am leaving my brokerage account available INSTEAD of paying off the “low balance” offers. Chase did the 5%/$10charge to me, so I paid it off (almost) immediately and am looking at the class action suit. Right now I have two left with the low balance “offers” and I could pay one off tomorrow, but it would deplete my emergency fund more than I would want, and if I pick the wrong one, the other might be the one that turns evil. Also if my credit lines are reduced, I can pay some off each to stay under the 80%/50%/whatever utilization.

    You don’t want to have just one or two cards that can zap you if they change terms.

    Having more lets you have one or two completely paid off (charge $100 or so per quarter so it doesn’t get marked inactive and keeps your utilization ratio low), and you can pay others off and reset offers (4% for 1 year, then payoff the last month, then 4% again for the next).

  32. FuryOfFirestorm says:

    Because they can! Now shut up and bend over like a good customer!

  33. darkryd says:

    They’re shooting themselves in the foot.

    Once the recession is over, people will remember how they were treated by these companies and will drop them left and right.

    Keep saving your money and paying off your debt, America. Once we’re out of the hole we can write off the card companies for good!

  34. jc364 says:

    I am so glad that I got my Capital One card paid off at the end of last year.

    These credit card companies are shooting themselves in the foot… Rather than increasing rates, they should be lowering rates so that people can get some leverage and pay off their debt. As it is now, they are just forcing the recession even lower. Its like taking a sinking ship out into deeper water; not a smart idea.

  35. starrion says:

    It’s pretty simple -

    Capital One raised the interest rate, so I canceled my autopayments, and paid it off. Now the card is in the shred bag.

    Bye Bye Capital one. Don’t bother calling when the economy improves.

  36. acasto says:

    I received the same later a few weeks ago (taking my 7.9% up to 17.9%). I just called and asked what we could do about it and they gave me a 10-month extension on the current APR.

  37. tgpt says:

    Correct me if I’m wrong, but:

    If I refuse the new terms, the company has to let me pay the balance off _under the old ones_. The existing terms do not allow them to make the balance due all at once if I refuse the modification, so the old terms of the agreement still apply until I’ve paid the card off. The only thing they can do to me is to shut the card off.

    So they can change the terms at any time, but you can refuse to accept the changes at any time. It means you can’t charge anymore, but it doesn’t mean the company can raise your rates and there’s nothing you can do about it.

  38. Kelly Gehrmann Whalen says:

    There is a recourse!
    Look for executive contacts on Consumerist and other sites.
    We had the same stunt pulled by Chase and got them to return the balance to our low rate, any future purchases will be at the higher rate.
    We are working hard on paying off our debt, and this card is next in line and should be paid off by month’s end. What do you think I’m going to do once it’s paid, Chase?
    Close it of course!

  39. Mobius says:

    I used their automated system to decline the changes but later decided I wanted to keep the card but just leave it unused in case of emergency or something. This is what they told me when I requested to opt back in:

    “We recently received correspondence from you which states that you no longer wish to opt out of the change in terms that were recently sent to you. Unfortunately, we are unable to change the status once you have opted out.

    You are a valued customer and we thank you for choosing Capital One.”

    Not valued enough, apparently. They certainly have no interest in keeping customers.

  40. xip says:

    Chase did this same thing to me about a year ago. They changed my rate from 8.9% to 18.9%. I called and asked them why, and they just said that their “models” showed that the rate increase was necessary. They refused to bring the rate back down, so I did a balance transfer to another card and stopped using it. Instead of making 8.9% on a balance, they’re making nothing now.

  41. Sodypop says:

    I recieved the same letter. The reason I have this card is because it has the longest history in my credit and, this is the main reason, it does not charge a percentage of a transaction when I use it outside of the US.
    So I called and complain and I told them how I was not happy and once I go to europe this coming June, I would use it for the last time and cancel it. The rep. said I should not worry since I pay the balance in full everytime, I won’t be penalized, WHAT!!!! Anyway, I told her that I earned that low rate and I’m the type of costumer that capital one needs and wants. So, she gave me 6% rate (mine was 7%) for one full year. Next year I will be calling again.

    • izallgood says:

      @Sodypop:
      I got the same letter, they wanted to raise my interest rate from 7.4% all the way to 16% or 17%. When I called to complain, because I always carry a balance and have a good payment history, and they offered me 6.9% for 10 months then it would go up to the new rate. I decided to opt-out. I have been slowly chipping away at the balance and really haven’t been using it, unless I was in a bind. It’s cash only for me now.

  42. Starfury says:

    Here’s an idea on how to “get back” at the CC companies in general:

    Pay Cash/write a check. Don’t use any sort of electronic payment (including Debit card) when buying small items. That way they don’t get any $$ from the merchant and you don’t have to worry about making late payment or having a high interest rate. Plus: when your money is gone you can’t spend any more!

  43. AstraBabble says:

    As stated many times over. Credit cards and credit card companies are evil. close it and continue to live debt free. Cash only. credit is unnecessary despite what marketing people and Ben Bernake tell us

  44. shifuimam says:

    What’s awesome is that if you pay your bill off in full every month, your interest rate can be 400% and it won’t matter. Duh.

  45. Anonymous says:

    If you haven’t used the card for a purchase since the increase and do not plan on using it in the future, just call them and tell them that you are not interested in accepting the new terms they offer. The card gets put on hold and the interest rate goes back down…until you use it or they decide to up it again, then you have to start over again. The key is that a credit card is a contract. It worked for me on my BofA card.

  46. Laila Dallam Tusa says:

    Exactly how much of a hit does your FICO score take if one of your credit cards get’s canceled by the CC company for infrequency of use?

    I feel frustrated that I got a couple credit cards when I was young and stupid, but now I can’t get rid of them ever for fear that the loss of the credit history will kill my score.

  47. Anonymous says:

    CO raised my rates to almost 30% on me and my husbands very small balances cards. I’ve haven’t revieced great service from them at all. I have a another card with three times the limit but half the intrests.
    Needles to say this is the final straw. We are using our tax refund to pay these down and then busting butt to pay them off and cancel them. Capital One claims they offer great rewards! What rewards! rewarding to them perhaps

  48. allthoseships says:

    i have a fixed rate credit card with my Credit Union. the rate will only go up if i’m consecutively 3 months late (and then it only goes up to 15.99 from 10.99). then if i pay on time for 3 months it will go back down to 10.99. you can get a fixed rate credit card, you just have to stay away from banks.

  49. silyolpooh says:

    There IS something you can do: get your Congressman involved. There are a growing number of Congress members who are just as frustrated by having given Capital One $300M and having them treat constituents this way. Make sure yours is one of them by writing and sharing your story today.

    [www.house.gov]

  50. 3drage says:

    Citi did the same thing to me as well. It was just good motivation to pay off my balance and never use the card again.

  51. 89macrunner says:

    i guess capital one forgot the principles of economics

    price up…demand down

    i love when businesses try to rewrite science!

  52. m-p{3} says:

    I’d say don’t close your account, but just don’t use it.

  53. Anonymous says:

    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.

  54. Nastrodoodimus says:

    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.

  55. Anonymous says:

    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.

  56. Aleatha Anderson Schultz says:

    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.

  57. ma3145tt says:

    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.

  58. Bog says:

    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.

  59. Anonymous says:

    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.

  60. Anonymous says:

    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?