Capital One "No Hassles" Card Actually Kind Of A Hassle

Reader Neurocat says he loves the rewards on his Capital One “No Hassles” Visa card. Cashing in points for $100 gift cards to Home Depot, Sears and the like is handy when you’ve just bought your first fixer-upper house. Then he was slightly late on two of his payments and the honeymoon was over.

After that, his APR shot up to a 29.40%, pretty much the highest allowable by law. When he called customer service, they told him that his late payments, which he made less than 30 days after the due date, had locked him into the penalty rate. Because of his otherwise spotless credit record, Capital One would be happy to lower it… in May of 2011.

See, Neurocat, they’re “No Hassles Rewards” cards. Earning and cashing in the rewards is a cinch, but late fees and penalty rates? Yep, those are still “Full Hassle.”

Transfer the balance to a lower interest credit card and try to pay it off soon and get back into the habit of paying your card off in full every month.

Comments

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  1. Marlin says:

    Not to blame the OP but the rewards are worthless if you carry ANY balance and/or mis a payment.
    Seems the OP should just pay cash and not pay any fees. No fee is also a nice “reward”.

    • UltimateOutsider says:

      “Not to blame the OP but the rewards are worthless if you carry ANY balance and/or mis a payment. “

      Quoting for truth.

    • Applekid ┬──┬ ノ( ã‚œ-゜ノ) says:

      Erm, depends on the card. I’ve occasionally carried a balance on my Amex Blue (yeah yeah, bad Applekid) and while the finance charges didn’t add to the membership points, it certainly didn’t invalidate them.

      Missing a payment, on the other hand… abandon all hope.

      • Necoras says:

        The issue is not that it would invalidate the points, but rather that anything you pay in interest will cost more than you reap in “rewards.”

        • Gulliver says:

          If he would carry the balance ANYWAY, then it is still an advantage. You are making it seem rewards and carrying a balance are connected in some way.

  2. Robofish says:

    They changed my rewards card into a no rewards card and didn’t tell me at first. I had to call to find out what actually happened and got transfered 5 times until I told them to not transfer me again because I’m tired of it.

    When they finally told me they at least said they took the rewards points and credited them to my balance. OY

  3. GuidedByLemons says:

    This is how most every credit card works. Don’t miss credit card payments. The end.

    • dognose says:

      Better yet, pay off the balance in full each month. That should be the #1 credit card rule for everyone on a budget or who cares about money at all. The jacked rates mean nothing when you pay it all off. If you’re short on money, get it elsewhere.

      • dragonfire81 says:

        “If you’re short on money, get it elsewhere.”

        Umm, exactly what “elsewheres” are you talking about? Unless he is lucky enough to have a friend or relative help him out, his only other options are: finding a higher paying or 2nd job (which is NOT easy to do these days), getting a payday loan or selling something to a pawn shop for pennies on the dollar.

        Honestly unless you have family or friends who can help you, the rest aren’t very desirable options.

    • 3skr1mad0r says:

      I have to agree with you. I have had the same thing happen to me in the past. The company lowered it again but I knew that was a favor, and they did not have to. I’m pretty sure its in the card agreement.

    • AngryK9 says:

      RIght, because there could never ever be any possibility whatsoever that something completely out of a person’s control could occur that could prevent him or her from being able to make a single payment on time.

      • Scoobatz says:

        Actually, no one (including the banks) is saying you must make payments every month. Just be prepared to accept the consequences when you don’t. That’s how it works.

      • GuidedByLemons says:

        Sure it can, and at that point they’re subject to the penalty rate they signed up for. A consumer watchdog site doesn’t need to bitch out the provider for enforcing the standard policies that were in the contract the user signed.

      • ryder28910 says:

        That’s not Capital One’s care or concern. All that matters is that you pay back, on time, as agreed. If not, you’re a credit liability and your rate shoots up. Extremely black and white situation.

      • NinjaMarion says:

        A single payment, maybe… but we’re told flat out that this was twice. So considering it didn’t jump until after the second time he did it, they seem to have given him an “Anyone can have something come up and screw up once” exception, and he still didn’t learn and paid late again, so they raised it. There’s really nothing surprising or unethical here.

    • TasteyCat says:

      Payments made “less than 30 days after the due date”? So potentially 50+ days to pay? Twice, as in didn’t learn the first time? I am onboard the blame the OP train here. Don’t pay late. If you do pay late, don’t be surprised by the punishment you receive, which you agreed to when you signed up for the card. Be happy they didn’t do something worse. Sure, life happens. Sometimes things up come up and you can’t pay on time… but don’t expect to get away with it unscathed.

  4. adrew says:

    They suck even if you’re a good customer and don’t have any late/missed payments.

    I signed up for a platinum card with “fixed” 4.9% interest back in 2003. They doubled it to 9.9% in 2008 but dropped it to 8.9% after I called to complain. Then, earlier this year, they doubled it again to 17.8%.

    I sent them a letter asking them to explain the rationale for the increase, as I am entitled to by the CARD Act, but just got a bunch of boilerplate nonsense about current marketplace conditions. I’ve stopped using the card, but keep it open since it’s my oldest one. Gah.

    • hansolo247 says:

      “boilerplate nonsense about current marketplace conditions” is a perfectly valid reason to raise a rate.

      The contract you signed says the terms can be changed at any time. So, “fixed” means “fixed until we change it.”

      This is all above-board and legal. While Liz may whine about it, she works for the Federal Reserve…don’t forget that.

  5. Awesome McAwesomeness says:

    Two late pays deserves a rate hike. Credit is not a right.

  6. Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

    Unfortunatly, Cap. One is one of the ONLY cards to offer 0% “Foreign Transaction” fees. We use it exclusivly for overseas travel and internet purchases that may be counted as “foreign”.

    • wetrat says:

      True that. I got one just for that purpose. Then, when I got stuck abroad due to the Icelandic volcano, they wouldn’t raise my limit so I had to use one of my other cards and suck up the 3% fee.

  7. Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

    CARD Act of 2009 requires card issuers to review the possibility of restoring these “penalty rates” to the original APR after a series of six consecutive on-time payments.

    Sticking to the letter of the law.

    BTW, they don’t HAVE to restore the rate, only ” to review the possibility of restoring these “penalty rates” to the original APR”

  8. Scoobatz says:

    Next, you’ll tell me the OP’s car insurance went up because he was in two minor car accidents. The nerve of these companies.

  9. CTrees says:

    Warhammer! Yes!

  10. plasticorange says:

    Agree with everyone else, dont miss payments—–set up auto-pay

    • outshined says:

      Noooo auto-pay. Every 10th article here is about how the bank/mortgage lender/auto lender won’t stop taking money out of the account even if it’s paid.

      • ryder28910 says:

        And if you could think for yourself, you’d realize that those handful of stories are insignificant compared to the millions upon millions of people who use the feature hassle-free.

    • outoftheblew says:

      And then, don’t pay it off early while the auto-pay is still in effect.

  11. Loias supports harsher punishments against corporations says:

    In other news, a different also followed the rules as outlined by law.

  12. Delta1 says:

    I’m going to not pay all my bills just to see what happens and submit a story to Consumerist. I wonder how many stories I can get? Will it help if I think up clever titles that make the business appear to be in the wrong?

    * Netflix delivers DVDs, penalty fees

    * American Express the express train to late fees

    * Bank applies penalty APR to customer in default through his own negligence

    Oops, how did that last one get in there?

  13. sirwired says:

    He missed his due date not once, but twice. This sort of things happen when you don’t pay your bills. If I was Cap One, I wouldn’t be upset to see him go either.

    • hansolo247 says:

      Actually, the penalty rate makes them want to keep the OP.

      If there was no penalty rate, they’d kick him to the curb.

      The OP will just take the penalty rate anyway. Win Win (yea, seriously)

  14. steveliv says:

    How do you make a slightly late payment? A due date isn’t a recommendation it is a solid date. Either it is on time or it is late. Can you complain about a store being closed because you got there after they were closed?

    • Gulliver says:

      My thought exactly., IT is like being a little bit pregnant. Being late by one day is late., End of story. Being late once may be explainable, twice is a pattern of inability to manage your finds properly. You will pay the higher rate, or take your business elsewhere. I wonder how he would feel if his boss paid him just a few days late

  15. scoopie77 says:

    That’s a heck of a lot nicer than Bank of America.

  16. AngryK9 says:

    Capital One pretty much sucks at everything. I was a few days late on one payment on my Capital One Visa card back in March or April of 2005, and am *still* at the “penalty rate” of 29.9%. That was the only time I was ever late on either of my cards and I’ve had both of them since 2003. My other card is at something like 14%…

    • steveliv says:

      You agree that you were late. Penalty rates are common fare. You couldn’t have been surprised when they jacked your rate when you were late.

  17. dpf2102 says:

    i didn’t know it was possible to renegotiate your interest rate with a credit card company. i pay off my balance every month: is it possible to get them to lower it based on my credit history?

    • chucklebuck says:

      Sometimes – best you can do is ask. I’ve done that with Discover. They occasionally call & ask why I’m not using the card (or just send me a new one out of the blue for no reason that I then have to activate). I tell them “Your interest rate is not competitive.” They always tell me that it’s as low as they can go, and so we dance . . .

    • kjs87 says:

      I got two of my cards down in August just by calling. One only went down by about 1/2 a percent, but it’s something! The other one went down significantly. My third was capital one, I’d been two days late on a payment 8 months before I called, but they told me that as soon as I’d gone a year of paying on time, it would automatically go down. I was admittedly late on a payment, though, so I don’t mind too much that they wouldn’t bring it down; I just won’t really use it until my rate goes down again.

    • hansolo247 says:

      So you pay each month in full, and care about the interest rate?

      Something’s not adding up.

      I could care less if my rate is in the single digits (like now) or 30%. If you pay on time it doesn’t matter. Then again, I’d only actually carry a balance if the rate they offered was 0%, and only people in the Obama/Bernacke super friends club get that rate.

  18. theblackdog says:

    I wonder if the OP has also lost his points. I have a warning that comes on every single bill I get with my AmEx that if I am late on a payment, I will forfeit any of my cash back I would have gotten this year. It’s right there plain as day so I cannot argue if it happens.

  19. dougp26364 says:

    I don’t see how Cap One is at fault here. They set the rules, late payments were made, they’re enforcing the rules. Pay off the card, cancel the card and find another rewards card with the otherwise spotless credit rating.

  20. flipdad1 says:

    so you were late on your payments, and as stated in the credit card agreement, they raised your APR, and now it’s a “hassle”? sounds like you got what you deserved…

  21. dvddesign says:

    I’m dealing with the same issue at Chase. I made a payment, get this… 1 DAY too early on a billing cycle. The payment didn’t actually process until the actual payment day, but Chase decided that I really had no intention on paying within the 30 day window and didn’t want to reapply my payment to fit the late fee penalty and then jacked up my interest rate by 3% which stays in effect for 6 months.

    Too bad for them I’m shutting the account down. They could’ve gotten a nice big fat interest payment to sit on over the next 10 months as I’ve been snowballing my bills and this was my next card. Now I’m just going to transfer the debt to another account and skip their “penalty”. I even told the customer service rep as much and lamented how poor of a financial decision this was for them.

  22. Purr says:

    This one is simply not going to go well for the OP when there is an admission of failing to keep up his side of the contractual agreement.

    For the record, Capital One has treated us very well over the years. I got in on a 2.9% APR back in the golden days. It has been raised over the years, but they always respond to concerned letters. They bump the rate, I write a concerned letter, they concede a percentage point or two. It is still lower than any other card I’ve owned now that we’re in the days of credit hell. Having now dropped the rewards portion, I got another cut in my APR. Chase gives better reward options for their Amazon card.
    (Opinion: Rewards cards are for ones you pay off every month. Low APR cards are for running balances.)

    Capital One is one of the easiest companies to deal with when a payment is received late. They happily refund a Late Charge once per year and will take it off of my record. Of course, if you are a repeat offender, you have to deal with what you get. I would highly prefer that they allow me to set up automatic payments rather than going to the website every month, but it’s worth it for what we get from them. (CapOne is the only card I have with a long-term balance, since it is exclusively for home projects.)

  23. lolfish says:

    Capital One doesn’t live up to the “no hassle” hype, in my book. I’d been a cardholder for years without complaint, but two years ago, some of those “convenience” checks that they send you were evidently stolen from my mail. Someone used one to pay a $140 electric bill. My fraud claim over the matter was denied because one of their fraud “experts” decided that the signature matched mine. I would have loved to have had a chance to dispute that, but my WRITTEN request to receive a copy of the stolen check, sent via certified mail, was never honored. I still hate Chase/Wamu worse, but I’m definitely bitter over the matter.

  24. props says:

    I once missed a payment with Capital One. I called, explained the situation (it was a new card, and I simply forgot). They rescinded any penalties (they took away all my rewards earned during that period), refunded the late fee, and categorized my late payment as being on time.

    I don’t expect them to be so nice if I were to miss a payment again. But it was very nice, since it was my fault.