Capital One Raises Your Interest Rate

We’re getting complaints that Capital One has raised interest rates across the board for its customers. One reader says his wife’s rate went from 9.9% fixed to a variable rate, making it about 15%.

“She called customer service, and after getting a “It’s a business decision that was a reflection of current economic conditions”, she finally got a manager who said that she had been getting these calls all day.”

Another reader says he got a white envelope from Capital One:

“Opening it up, I learned that Capital One has decided to increase APRs on purchases (and some other fees like on cash advances). The other fees I was not concerned with, but my APR is apparently jumping from the 4.99% I have been enjoying to an outrageous (in my mind) variable rate currently at 13.99%!!! This change is scheduled to occur on my September 2007 billing cycle. Now, I am still not carrying a balance at this point, but that kind of jump is ridiculous.”

Remember to open strange white envelopes from your credit card company! We know that some of you toss them right into the shredder.

This one you should open so you can see what magical new rate Capital One has in store for you.

If you do decide to switch to another card, leave your old one open if you can. The length of your credit history is an important factor in your credit score.



Edit Your Comment

  1. theWolf says:

    Better yet, don’t carry credit card balances and don’t use your credit cards for cash advances.

  2. hypnotik_jello says:

    I’m assuming this is just for credit cards and not other types of debt issued through CapitalOne?

  3. hellinmyeyes says:

    I called a year ago to ask about having my interest rate lowered from the 20% it was (this is my first-ever credit card) to something more reasonable since my credit pretty much kicks ass. They happily lowered it to 12.5% and then a couple months later it went up to 14% “to reflect current economic conditions”.

    So, this weekend I figured I’d try again since I’m getting a lot of 10% offers, and they definitely wouldn’t budge this time. I’m all about my CapitalOne card. Their service has been good to me, the Web site is easy and fast, and they’ve been really prompt about replacing my card on the multiple occasions I’ve lost it.

    That just seems shady that they’re going to make a fixed-rate card into a variable-rate account that’s not even competitive. I might have to take a look at another company’s offers if this is what I get to look forward to.

  4. Jaysyn was banned for: says:

    I cut up my Capital One card 5 years ago & never looked back.

    They are a joke.

  5. Jasmo says:

    Ditto on the cut-it-up … mine started out as an 8.5% card from someone else but it morphed into a Capital One via some acqiusition, whereupon the rate doubled. I talked them back down on it, but it seems to just wander at will. So snip snip snippity snip.

  6. V-effekt says:

    Capital One is the one card, however, that does not charge you the 3% ‘rape fee’ for international transactions. I keep the card for international trips and save anywhere between 3-4% on all my purchases abroad. I tested it this summer with my chase card and the difference was 4.1% for the exchange rate on the same day.

  7. Squeezer99 says:

    dear consumerist, you do realize that fixed doesn’t mean fixed right? it just means they will send you a notice 30 days before hand of any changes to your rate/grace period, etc?

    I have a fixed chase card, they wanted to change my interest rate and other things. I opted out of what i could, but some things were not up for being able to opt out.

    don’t like it? don’t use them. i wouldn’t use Cap One just because they don’t report your credit limit, which hurts your credit score.

  8. iMike says:

    @theWolf: Carry a balance? You’re the CC companies’ bitch.

    If you really need to float the balance, just do a balance transfer to a zero percent intro rate on a new card. There are 50 or so listed in a recent Consumerist “article.”

  9. Sam Glover says:

    Just an FYI in case you are not using “cut it up” to mean “closed the account and cut up the card.”

    If you do not close the account, your credit may be harmed by the excess credit available to you. But more importantly, you have an account out there you never pay attention to that is just waiting for an identity thief to stumble on it.

  10. acambras says:

    As crappy as it is, they’re within their contractual rights to do this.

    HSBC just raised one of my rates — I inquired as to why, and they sent me a letter saying that the increase didn’t have anything to do with my individual credit history — just stuff about the current economic climate. I am now aggressively paying off the small balance I have on that card.

    Like others have said, if you don’t want to be the CC companies’ bitch, don’t run up a balance. I know that sometimes this is easier said than done. I’m not trying to be self-righteous, either (unfortunately, I’m currently the bitch of more than one cc company). It’s just that owing money to the CC company makes it easy for them to make you their bitch. :-(

  11. iMike says:

    @Sam Glover: No way. DO NOT close old accounts. Average account age is a key factor that increases your credit score. Contrary to popular belief, a large amount of available credit can INCREASE

  12. JohnMc says:

    They use the barbarians as their namesake in their commercials by design. So now they have synergy. Their business practice matches their marketing plan.

  13. iMike says:

    @iMike: your credit score by reducing your percentage utilization.

    If you’re worried about not being able to see fraudulent utilization on an infrequently-used card, use the free Yodlee service to watch all your cc accounts. You can set up email alerts.

  14. chrisb says:

    I don’t understand how they can do this. When you sign up for a credit card, it clearly states the rate. Is there some fine print that says that they can change the rate whenever they want?

  15. JohnMc says:


    Dormant accounts can also harm you in two ways:

    1) The obvious identity theft opportunity. Old account, you moved, company can’t get billings to you. Thief maxes the account, you are dinged.

    2) The idea of average account age would only be of a concern to somebody just starting out. For most people the overriding issue would be total possible indebtedness. Go for a home or car loan and the loan officer is going to look at your total possible debt load not just the actual. They don’t want to have the possibility right after closing a client go on a buying spree and impact their ability to pay them back.

    Personally, I close all dormant accounts. I don’t want to carry the risk.

  16. Jaysyn was banned for: says:



  17. Harlan says:

    Yep. I’ve had a CapOne card with a fixed 4.99% rate for years. I have a few grand in credit card debt that I’ve slowly been paying back. A few months ago they said they were going to jack up my rates to 13% or so. I followed the instructions to opt out of this, and now that debt will be at 4.99% forever, but I can’t use the card for new transactions any more, and when I pay it off, the account will disappear. Their loss! Given current interest rates, they would have been better off keeping me as a customer and changing the rate to 6% or 7%. As it is, between inflation and their overhead, they’re losing money on my debt. I have other cards that I use for day-to-day transactions…

  18. pestie says:

    Oh, joy! I have an awesome Capital One credit card with a fixed 4.99% rate. If they jack the rate, well, it’s time to go card shopping, I guess.

  19. The length of your credit history is an important factor in your credit score.

    Is it important enough to be worth it though? Sam Glover and JohnMc make a good points.

  20. DanKelley98 says:

    Just another example of a crappy company ripping off their customers.

    This needs LOTS of awareness in consumer circles.

  21. justelise says:

    I recently called Capital One because they added some feature to my card which would allow charges to go through even though they would push me over my limit. While I was on the phone with them and had them disable this new feature, I asked them to lower my interest rate and refund the annual fee. They refunded the fee and lowered my interest rate by 5 percent. I think their willingness to do so had a lot to do with the recent barrage of complains they had from people who saw their interest rates shoot up for no reason.

    If you use the card regularly and you have a good history call them and ask them for a break on the interest rate. The worst that could happen is that they say no.

  22. B says:

    I have a question about dormant credit cards. If you have one, the card expires, and you don’t activate the new one, does that close the account? (Assuming you don’t have a balance on it).

  23. anatak says:

    @Sam Glover:

    Well said.

    Also, zero-balance credit cards can count against you when applying for a mortgage. You are seen as an accident waiting for a place to happen.

    Close the stupid account and get on with your life.

  24. anatak says:


    Not sure that it is tied to the expiration date on the card, but yes, unused accounts will get closed by the issuer without warning. May not happen on traditional Visa/MC/Disc/AmEx, but store cards will drop you like a bad habit.

  25. pestie says:

    Dammit. I just logged into their web site, and sure enough, they did raise my rate. Still, it’s only 9.9%, which is pretty good for a credit card. Still, it was satisfying to see $0 finance charge for last month. I guess it doesn’t matter what the APR is when I pay the balance every month.

  26. missdona says:

    My husband’s is hanging tight at 6.99%

  27. geeniusatwrok says:

    oh that reminds me, Comcast just sent me a notice that the monthly rental for the crappy Moto DVR is going from $9.95 to $12.95, so I just called to cancel everything except the most basic service seeing how I rarely watch TV anymore.

    I would have entirely cancelled all TV service but that would increase the price of their internet service over that of keeping basic local channels (and I can’t use an antenna anyway; no signal in my apt).

  28. mantari says:

    Capital One got me a year and a half ago. I had 4.99 balance transfer APR and a 4.99 purchase APRs. I transferred ~$10k to the card. I also put, perhaps $1-2k in purchases on the card. Then, Capital One put my Purchase APR on the interest rate treadmill, going up slowly each month and passing 10%. (Honestly, up until then, I didn’t realize that my purchase APR was not fixed like my transfer APR.)

    I called to complain. They refused to reset it. Any extra payments go to the BALANCE TRANSFER and not the PURCHASE BALANCE, so there wasn’t any direct way that I could pull myself out of their trap. So I did something different.

    I transferred the entire balance to another card, with a somewhat higher APR. My purchase balance and transfer balance was all gone with Capital One. I called Capital One back. This time, they were willing to reset my purchase interest rate to 6.90% fixed. (Being in a position of strength seems to help with these things.) Not that I was going to use the Purchase APR, though.

    Then I transferred the balance BACK to my Capital One card. Everything was at a 4.99% fixed “for life” (or until you default) balance transfer APR. I then have NOT charged any purchased onto Capital One, so they won’t play the game of jacking up my purchase APR and keeping me locked in with my 4.99% transfer APR.

    I have to say, it was a very clever scheme of theirs to lure you in with a low fixed balance transfer APR, and then to comingle in with a purchase APR that turns out to be adjustable and where you can’t pay off your purchase balance until your transfer balance is taken care of. Sneaky!

    SUMMARY: If you’ve transferred a large balance onto a credit card, DO NOT MAKE *ANY* ADDITIONAL PURCHASES ON THAT CARD. You’ll be paying the interest (which will end up increasing over time) on the purchase balance, which won’t go away until you’ve cleared out your lower interest rate transfer balance.

    SOLUTION: Transfer everything out of the card. If you want to, start over and transfer everything back, but NEVER making a purchase on the card. Not even for an emergency.

  29. mantari says:

    PS: MISSDONA — I suspect your husband may be in a position like me. If you have a low (or no) purchase balance, they’ll likely want to hook you in with the lure before they start to jack the rate up on you. If they pull the hook out of the water now, they know they’ll get no fish to bake.

  30. j-o-h-n says:

    @anatak: zero-balance credit cards can count against you when applying for a mortgage

    Our bank said they only cared if they were recently (6 months, I think) acquired.

  31. beyond says:

    I pay 0% interest. The rates on my cards is immaterial. Pay off the card every month. If you really need to borrow money, go get a loan.

  32. TechnoDestructo says:

    @Rectilinear Propagation:

    I would drop my credit score to ZERO in order to give the finger to Chase.

  33. davere says:

    Thanks to this post I noticed that they changed my “4.9% for life” APR to 9.9%.

    I called and said that it was a business decision and it had nothing to do with my payment history or account activity. I explained that the business decision must have been to try to screw me out of as much money as possible.

    She said that they may be able to lower my APR but not back down to 4.9% to which I answered “no, what I’m doing is transferring my balance today to someone else. Thank you very much.”

  34. B says:

    @beyond: You have a bank that offers a better intrest rate than 4.99% or even 0% for a six month unsecured loan?

  35. TehRev says:

    I notice a few non capital one cards also jumped. My 7.9 card went to 9.9 just recently too. I think its an industry wide thing.

  36. smarty says:

    Just checked, was 9.9, still 9.9 and still says fixed. No notice in the mail.

  37. missdona says:


    You could be right, it’s a zero-balance account. It had charges in the past, but no revolving balance for several months now.

  38. BStu says:

    Golly, I wonder if these mysterious “economic conditions” could have anything to do with the subprime lending meltdown that was set off by the banks themselves.

  39. You-Me-Us says:

    What’s left in your wallet?

  40. yellojkt says:

    I’ve been waiting for the other shoe to drop on their portfolio enlarging advertising campaign. Just another case of credit card bait-and-switch. I took out a home equity line of credit to get all these monkeys off my back.

  41. Trackback says:

    Consumerist reports that readers have been writing in today with complaints about Capital One credit cards. They’ve increased their interest rates (APRs) on purchases across the board, affecting a large pool of customers. Here’s a strategy to remedy this situation if it affected you.

  42. strathmeyer says:

    Is there any reason to use Capital One besides the fact that they have TV commercials? Do they offer any reasonable service at a reasonable prices?

    (Yes, I am a Capital One user, who pays their balance every month and has no need for a limit larger than $3000. Heck, the low limit is practically fraud insurance….)

  43. XianZhuXuande says:

    No letter yet for me. I’m surprised. Better people have received them.

  44. Helvetian says:

    Nothing but good experiences with them for me. My card stands at 4.90% Fixed for purchases/cash/bt. I have the no annual fee Visa Platinum Plus card for several years now. However if I do get this letter, that will change everything, but I like CapOne and will try to fight it with the Exec Team to get the change turned over. Otherwise I will retain the card, too much tenure to just cancel.

  45. davere says:

    I’m going to try contacting them on the phone one more time today. But if this fails, does anyone have contact for their executive customer service?

  46. bobreck says:

    @strathmeyer: You might want to not assume the limit is keeping you safe from fraud. CapOne has an “Over Limit Fee” where they will allow you to exceed your limit but then slap you with fees for doing so. That is one of the fees that was increasing in the receieved letter.

  47. hektik says:

    I fell into the CapitalOne trap by their commercials for “Small Business” and how they care about small companies.

    I applied for one of their small business cards and was approved with a lovely limit of $500. (huh? that pays for, um, nothing.) It was 0% APR for a year, so I was ok with it. When the 0% APR expired (last month), the rate jumped up to 24.9%. I knew it’d be variable, but whoa!

    Goodbye CapOne, so much for your words about small business. I’m definitely going to check all my other accounts this month.

  48. mantari says:

    I just got a letter from Capital One. I so rarely get letters from my credit card companies these days. But this one said something different. They were going to raise the _fees_ on the account, and I could decline and pay down the account at the existing terms.

    I’m starting to wonder if it might be good to really lock in my terms now, in case they try to do changes down the road that they say that you can’t opt out of.

  49. pete says:

    I am livid. I’ve had a Cap1 card for over 10 years. My rate was “fixed” at 9.9% and I’ve never missed a payment. Ever.
    Because of this post I checked my mail pile and found the notice from Cap1 that I’m getting jacked.

    I’m scanning the mailer and sending it into Ben.
    I’ll be “opting out”, and when I call to cancel my account you can be sure I’ll be giving them a piece of my mind.

    I feel bad for whatever “Retention” agent gets my call forwarded to them.

  50. olegna says:

    I’m always confused about how APRs are determined. I went through a major ordeal of paying off $26,000 in CC debt (looong story involving drugs, gambling and a few other debaucheries) in two years (I cleaned up and got a well-paying job). When I dropped my CC debt from $26,000 to $8,000 in 16 months, my CapOne APR was at 32.99%. My Chase Card was at 29.99% and my HSBC card was at 13.99%.

    Firsthand experience: pay off highest interest first and pay in occasional spurts, esp. if a spurt gets one account cleared — I also had a Dell Card and a Bloomingdale’s Account that I had to clear — the latter two were necessary to help me get cleaned up :)

    ANYWAY: I paid off my CapOne first and had $8,000 in debt on two other cards. I hadn’t made a late fee in over a year.

    After paying off $9,000 on a CapOne card, gettign my abalce to zero I called to ask them to reduce my 32.99% APR.

    The motherf**kers REFUSED to drop my interest rate and wouldn’t explain why.

    OUTRAGEOUS. I paid off $9,000, dropped my debt from $26,000 to $9,000 (and since then to zero) no late fees, and these asshole wouldn’t lower my APR from an outrageous 32.99%.

    Somebody please explain to me how I could be considered a “flight risk” (a high credit risk) if I was religiously making $2,000 a month payments for over a year, dropped by debt by almost 60% in that period of time?

    These fuckers are criminals, and I think a lot of people are lying when they brag about their 0% APRS and 4.9% APRS (or they’re misleading because they just recently got some recent new temporary offer that in 12 months will be up to 20%, but they aren’t telling you that because it’s basically proven most people lie about their financial situations).

    Is it needless to say that I didn’t give a shit what happened ot my credit score and cancelled that Cap One Card.

    PS — It took those assholes FOUR MONTHS to actually close my account. They were hoping I’d back out of canceling. I just sent them profanity-filled letters for four months until they finally closed my account. I learned how to draw a hand with a middle finger really well in that period of time and sketched it on every letter they send me and mailed it back to them. They are major pricks.

  51. hellinmyeyes says:

    Hmm, the good news out of CapitalOne is that their high-yield money market accounts went back up to 5.00% APY.

  52. Helvetian says:

    I just got my letter, I must say KUDOS to CapitalOne for designing such a colorful and clear, easy to read notice. Every credit card company always sends tiny leaflets with 6 or more pages, whereas CapOne delivered a very consumer friendly insert.

    Also maybe I am lucky, but mine only mentions Late Fee, Return Payment Fee and OCL Fee as changing. Are there other letters?

  53. psm321 says:

    @Helvetian: I got the same notice, with no mention of interest rate changes, only fees. Of course, I have no idea what my rate currently is (because I always pay in full and actually rarely use the CapOne card anyway), so it may already be high. I just tried to login to check my rate but for some reason banking systems are always down at night :(

  54. Jason says:

    I just got the same notice. They are changing my fixed 7.9% card into a variable with a starting rate of 15.9%. All I did was pay off my balance every month and they decided to raise my rate. I just cut up my card and am never going to use it again. Their loss.

  55. Trackback says:

    In case you haven’t heard, Capital One has recently been increasing credit card interest rates for their cardholders. While it’s not unheard of for card issuers to raise rates if you engage in risky financial activities (universal default, anyone?)

  56. Here is the address to dispute charges:

    Capital One
    Attn: Disputes
    PO Box 85520
    Richmond, VA 23285-5520

    And the phone number to get an actual human is:
    800‑548‑4593 (Press 0 to bypass)

  57. Crazytree says:


    and if you do…


  58. Anonymous says:

    Yes, I had the same increase from C1, HSBC was first, Chase second and now C1, I just 0 the balance, but keep them open.

  59. Bog says:

    It’s time to open another news item about Capital One and their insane crud. Its March 25, 2009. Lets open an old two year old thread.

    Despite the fact I pay all credit cards in full every month and never had a late payment. I have learned they have sent out notices like the one to follow to many, many people.

    Even if you have a super good FICO score, been a long time customer, Capital One sent notices they they are raising their rates to 30%. In my case that is a 20% increase. I suppose that $4billion in bailout from the gov wasn’t enough money.

  60. sb4827 says:

    I received an offer from Capital One to transfer higher interest rates balances to my Capital One account at a 8.9% interest rate. I transferred a balance and 2 months later received my statement telling me that my interest rate had gone up to 17.9%. I called and talked with numerous people at Capital One and they kept telling me that my credit was perfect and I had no late payments and was a valuable customer. This was just a business decision by Capital One.

    I have now paid a 3% fee and hundreds of dollars in interest to transfer my balance back to my other credit card company.

    How can they suck people in to transfer balances and then stick it to you legally???