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

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 ...

@Blueskylaw: SHUT UP! THAT'S WHY!

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!!!

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.

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.

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.

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.

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

@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.

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.

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.

@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.

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.

@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.

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.

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?

@howie_in_az: I don't see you disagreeing that it's a business, though.

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.

@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.

@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.

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?

@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.

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.

@AllanG54: Really? You didn't get hit with that $69 yearly "membership fee" like everyone else?

@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?

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.

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.

@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.

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!

@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.

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

@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.

@matt1978: I disagree that it's a business anymore. It's insolvent, its debts dwarf its assets. It's not a business, it's a zombie.

@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.)

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.

@Blueskylaw: you do! you get a lower rate. the flip side of higher rates during sad times is that you had a lower rate during happy times.

@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!

@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

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

@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.

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.

@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.

"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.

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

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."

@tc4b: Thank you, Hank Scorpio, er, Paulson...

@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.

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.