Citing "Market Conditions" Capital One Raises Reader's APR 4.99% to 13.5%.

I have had a Capital One Mastercard for about 10 years. My interest rate has been 4.99% for as long as I can remember. I received my statement for October to find that my interest rate had jumped from 4.99% to 13.5%.

I called Capital One to find out why. After a completely confusing phone tree and 10 minute wait, I got through to a real person who explained that the increase was not because of anything I did, but because Capital One made an “executive decision” to increase rates “for all cardholders” because of “recent market conditions.”

They then offered to transfer me to another person who has the authority to review my account and see if I can get the rate lowered. This second person re-explained the reason for the rate increase and offered to lower my rate from 13.5% to 12.9%. I argued that I would transfer my balance away to another card or pay it off entirely, but this made no difference. I grudgingly accepted the 12.9%.

My wife and I are carrying more of a balance than usual as we just had some work done on the house that we are floating on the card for a few months. The interest rate increase makes our monthly interest (the amount we have to pay to keep the balance flat) go from $59.20 to $147.11. The difference, $87.91, is more that I pay each month for cell phones, satellite TV or even electricity on most months.

We are fortunate in that we have savings and other cards with lower rates which will allow us to transfer our balance away from Capital One. I’m sure many others will not have that luxury. Why is this not big news? Or is Capital One just screwing me because I had such a low rate to start with and that makes me a bad (low profit) customer? For the record, my credit is excellent and I have NEVER had slow-pays or missed payments.

I’m wondering if any other Consumerist readers have had this experience with Capital One.


First Discover, and now Capital One, is raising the interest rates on large swaths of cardholders, seemingly for no other reason than they feel like making more money. What is this “market condition” they speak of, the lowered Federal interest rate? Scrutinize your statements this month. Is this rate increase happening for other credit card companies too? If you call up and ask why, are they explaining it by saying things like “market conditions” or “to remain competitive?” A larger story could be at play here.

In any event, Chuck is doing the right thing by doing a balance transfer to a lower interest credit card.

RELATED: Discover Randomly Raises 400,000 Members’ APR “To Remain Competitive”

(Photo: taberandrew)


Edit Your Comment

  1. Jaysyn was banned for: says:

    I say it everytime a CapOne story is posted, and I’ll say it again. Capital One is crap. They aren’t competitive & they treat their customers like they are beneath contempt. Apparently nothing has changed in the 9 years since I stopped using them.

  2. Chicago7 says:

    Hey, they have to pay for the 30 million pieces of junk mail they send out every week SOMEHOW!

  3. rhombopteryx says:

    The “market condition” is likely the one Chuck identified – he “I grudgingly accepted the 12.9%” The CC company is probably doing this because it can – based on its internal data, it concluded that the rate increase would “stick” – Chuck would suck it up and pay more. Dumb move on Chuck’s part. Maybe an ideal move (even better than Ben’s mediocre suggestion to transfer to a lower-rate card) would be to pay off the balance and not actually incur interest – at all!
    The best move of all would be to prevent CC companies from changing contract terms in major ways like this without some kind of advanced notice and right to reject/terminate.

  4. vex says:

    When are people going to get that credit cards can change their rates to whatever they want, whenever they want? It doesn’t matter how good a customer you are or what your credit rating is.

    Stop carrying balances. Interest rate = 0%, problem solved.

  5. davere says:

    They did the same thing to me, from 4.9% fixed to 9.9% fixed. I got them to lower it to 8.9% fixed. Nothing I did got them to lower it any further citing “market conditions.”

    So I decided to help their market condition by closing my account yesterday and transferring my balance to a card with a better APR. I encourage everyone to do the same. Hit them where it hurts.

    I can’t trust that company ever again for my future financial needs.

  6. Crazytree says:

    that 4.99% is below prime. that’s a promo rate… I can understand why they are eliminating promo rates.

    I thought the article was going to say that they raised his APR from 10.99% to 26.99%.

  7. theninjasquad says:

    I could understand a few percentage points increase, but to go up almost 10% is ridiculous. I thought the lure of CapitalOne was their lower interest rates. Now they come off looking like any other credit card.

  8. bobreck says:

    This is the same thing I reported back in August or September and was discussed in length on this site. I had the 4.99% APR as well. Mine was also raised to 13.99%. I promptly closed and paid off any balance I had. Ironically, my wife’s Cap One Card at 3.99% has not increased. She signed up for her card less than 3 months after I did a few years back.

  9. dmartinez says:

    Actually he should have told them he rejects the new terms and that would force the credit card company to close the account but keep the balance under the old terms. Had that happen to me once so I told them I do not accept the terms which they where mad about cause it forced them to keep my APR at 6.99% instead of 19.99%.

    Ofcourse they will not tell you unless you ask them directly if you can do that.

  10. davere says:

    @Crazytree: Not a promo rate. I’ve “enjoyed” that APR for many years until just recently.

  11. bobreck says:

    @Crazytree: That rate was not a “promo” rate. It was capital one’s standard rate a few years ago… and I can’t recall 100% completely, but I swear they were advertising that as “For life.” But, I am sure I’d be hard pressed to find anything supporting that claim in writing.

  12. jaredutah says:

    Those that understand interest, earns it, those that don’t, pays it…

    Harsh reality, but true.

  13. FLConsumer says:

    Why would any lender want to loan out money at less than prime rates? Unless you’ve got other financial relationships with CapitalOne which make it advantageous to them, I don’t blame them.

  14. vex says:

    Jared, brilliant quote!

  15. loueloui says:

    Anyone else notice the shot of their ‘Customer Relations’ department? That’s funny I didn’t think you could take pictures in Hell.

  16. SybilDisobedience says:

    I HAAAATE Capital One. I was a customer of theirs for a few years before they did this to me about 6 months ago. I was so incensed that I paid off and closed the account within a week of receiving the statement. The best part is that I’ve recently begun getting new card offers from them again…and the letters always start with “Sometime back, we lost you as a customer. We’d like your business again.” If they want it so damn bad, they need to stop with the arbitrary rate increases!

  17. jaredutah says:

    @vex: Thanks! Heard it from a religious leader…I think he understood it!

  18. Trai_Dep says:

    So this means that the annoying Rampaging Visigoths commercials are going to be cut? Or they’ll simply change the ending so that the cuddly Capital One family is skull-cleaved, shackled and the women-folk* raped?

    If so, it’d almost be worth the hike.

    * and boy-folk, for those right-wingers of Florida

  19. lindsey520 says:

    I just canceled my CapitalOne card 20 minutes ago. I found a card with a better APR and 0% on balance transfers for 12 months. They didn’t even put up a fight… they just let me go. I had that card for 7 years of my 25 years of life (that’s a long time!) and they didn’t even offer to lower my rate or anything. Shows how much they care for my business.

  20. Consumerist Moderator - ACAMBRAS says:


    trai_dep, I love ya, but the women-folk/boy-folk rape thing is a bit much.

  21. Snarkysnake says:

    Boo hoo hoo…Capital one raised my rates ! Now I’ll have to pay more interest every month ! They might as well take the half eaten food out of my (orphan) baby’s mouth ! The big,bad credit card companies are screwing me again !!

    Listen up you people…Capital One is not listed in the phone book under “Charitable Organizations” . Yeah ,they A$$F#ck you if they can… Its the way the game is played. More than likely,one of their computers noticed that poor old Chuck here had gotten a little ahead of his paycheck and picked him to stick with this rate increase.(Carrying a bigger balance than usual,smaller payments-this guy’s overextended.He has to take higher rate because he doesn’t have a choice-tough)

    The reason these companies can get away with this is because:

    1) There is a huge demand for short-intermediate term credit to buy “stuff” ..An extra DVD player, an Ipod,what have you.These guys know that you’ll bitch (or write Consumerist)…But you’ll pay it…

    2) They also know that you won’t tear yourself away from “Survivor”,”Who wants to marry their farm animals” or such to actually put some time in to find a better rate or fairer terms for their account.Hell,they could charge 200% and a lot of their customers wouldn’t know the difference…As long as they can swipe that card and get that “thing” that the boob tube told them that they needed to be like the actors in the commercial…

    And another thing. If you have halfway decent credit,you can return the screwing that these companies give you by walking in to your nearest Credit Union and getting a card from them…Yeah’,they aren’t very glamorous.They won’ t have some actor in costume demand to know “What’s in your wallet “? (Like it’s any of their damn business),but sweet Jesus,are you not even vaguely aware that you have a lot of choices ? Get off your ass and hit them back.

    And yes,it is that time of the month…

  22. elangomatt says:

    @Chicago7: I am a capital one card holder and I still get tons of applications from capital one. Of course, I also get tons of apps from American Express, but I haven’t seen them raise their rates (yet). I can’t really cancel the Capital One card though. It is my longest standing credit card so cancelling could adversly affect my credit score. I just carry a zero balance on it since I don’t much care for it. Oh and I think they just recently changed my card to capital one rewards or something like that, whatever that is.

  23. Arlahna says:

    I have had recent issues with Capital One as well. I know my credit isn’t the greatest, but it’s not the worst either. I’ve had their card for years. Haven’t spent anything on it in the last 3. I’ve just been paying it down. So for what reason do they reject me when I plead for them to lower that 27% APR?? Internal Data. They are not allowed to lower it. Even though I told them I will be transferring the balance to a different card and closing this account. It is completely unacceptable.

    Out of curiosity, what is the group’s consensus on the best bank to get a credit card from? I mean a national bank like CitiBank rather than a local credit union.

  24. headon says:

    @sanrkysnake: Your vicious, I like that.

  25. RogerDucky says:

    My speculation:

    Some of the credit card companies, in a greedy/impatient attempt at making a bit more money, tossed some money into “AAA” Mortage-backed securities back in the day.

    Now that the papers are basically worthless, they needed to make up the money they lost somehow…

    Anyone feel like digging into the 10K reports for Discover and Capital One to find out if this is true?

  26. ShadowFalls says:

    When I see their commerical and hear the part that says “What is in your waller”, I smile since I know it isn’t Capital One.

    The reason they wanted to give further review to his account was to get a good look at the balance history and see how much money they can easily make. In the end, he will transfer his balance off of it and never use it again, so how is this making money from him again?

    Alienating your customers isn’t a good way of doing business, I don’t know why they aren’t figuring that out yet.

  27. James Sumners says:

    I’ve had a Capital One card since at least 1998. Until this past March (maybe a little earlier) the rate on my card was 19.99%. I had been buying groceries with the card, and was unable to pay it off every month (I’m a student/student worker). On a lark, I decided to call Capital One and ask them about lowering my rate. To my surprise, they were forthcoming with the request and set it to the LIBOR plus 9.44%. So, yeah, my rate changes every few months, but so far it hasn’t exceeded 14.9%. In fact, it went down on the last statement.

    I tried the same thing with my Chase and Citi cards. The people on the phone all but laughed at me. I think one of them even said, “We don’t re-negotiate terms.”

    In my opinion, Capital One is pretty good considering what is available. Chase? Well, I’m ready to pay that card off and never use it again. Evidently, if you carry a promotional (deferred interest) balance, they will charge interest on any new purchases. That’s right, no grace period on the new purchase. Interest is charged from the day of purchase.

  28. DeeJayQueue says:

    Maybe they’re losing their shirts in other areas via other companies. They need to make the money back somehow to please the stockholders so they stick it to the regular customers with a higher interest rate. It’s win-win for them. If you don’t like it and decide to pay off the balance and switch cards, they’ve got less outstanding credit and more money in the bank. If you suck the big corporate dick and pay the extra interest, well, they’ve got more money in the bank. Unless you can refuse the increase and cancel your card but keep the debt and pay it off at the old interest rate, but then you might take a ding on your credit score for having less open and available credit. Pick your evil.

  29. charmaniac says:

    Do not use credit cards for anything other than emergencies. If you cannot afford to buy something without using a credit card, do not buy it unless it is a necessity. That is the approach I use and it has helped me save tremendously.

  30. lincolnparadox says:

    12.9% is about as good as any bank will give you on a personal line of credit. My suggestion is, pay it off ASAP. Then, call to cancel. When they ask you why you’re canceling, tell them that you’re sending a letter. Then, send a letter to corporate.

    It won’t do anything, other than make you feel better. Credit cards are useless tool in today’s economy.

  31. OnlyCommonSense says:

    @vex: Beat me to the punch. He’s carrying a $14500 balance and says he has that in savings. That’s great as long as his savings bears at least %5.00, he’d be making that whopping %0.01 yippee. Now at %12.9 I doubt his savings is keeping up. People need to stop whining about raising rates and stop carrying a balance. 3-6 months emergency savings, anything over that while you’re carrying a normal balance on a card is crazy. Pay off the card, then go to and start calling.

  32. synergy says:

    So far no hikes on my Discover. *knock on wood*

  33. TechnoDestructo says:


    I say get a different card, even if it’s offering the same rate, transfer the balance, call capital one, tell them why.

    The new company isn’t deliberately screwing you. Even if the deal they offer isn’t any better, they aren’t treating you like shit (yet).

  34. shamim316 says:

    I have to look at my capital one statement closely now.

  35. guitarzero says:

    Bank of America(formerly MBNA) just sent me a change of terms notice, raising my cash advance APR from 9.99% fixed to upwards of 26%. Not that I’ve ever used the option, but I like that it’s potentially available in a crunch.

    The notice states that if I wish to reject the increase, all I have to do it notify them in writing. But it doesn’t mention anything about a mandatory account closure if I do in fact reject the new terms. Anyone know if rejection automatically triggers account closure? My guess it doesn’t, unless stated in the notice.

    Would hate to close this account, as the credit limit on this card forms the bulk of my total available credit.

  36. Harlan says:

    I think this was discussed here a few months ago. You should have received in the mail a notice that this was going to happen. I did. There was a phone number you could call to opt out (which disables your card for future purchases). I did. Now the $3500 I had as a balance on that card is being paid off at a 5% interest rate, minimum payments. I use other cards for day-to-day purchases. It’s a great long-term loan, and I can use the money I’m saving by not accepting the new, higher interest, to pay off my higher-rate student loan faster.

    Incidentally, regarding personal lines of credit, my credit union has a prime+1 line of credit that’s quite a good deal and can be accessed easily from their web site. Much cheaper than dealing with the fees from credit-card cash advances, too.

  37. edrebber says:

    The issue with Capital One is that these low rates were advertised as “Fixed Rate for Life”. It’s amazing that the Federal Regulators would allow such deceptive advertising.

    These low rates with the promise that they were good for life encouraged people to pile on debt. Now Capital One is allowed to raise the rate. This is unconsionable.

  38. Trai_Dep says:

    @Consumerist Moderator – ACAMBRAS: Sorry, ma. Won’t happen again. (hung shoulders in shame)

  39. ncboxer says:

    @edrebber: For the “Life” of what? Your life or some arbitrary # they come up with. It is the same with products you buy. It might say guaranteed for life, but they typically mean the life of the product which could be 3 years or something like that. Maybe the “life” of the CapOne cards is one month. Or maybe it just the “life” of the first charge you put on the card.

    I do admit when I think of something advertised “for life” I immediately think it is as long as my life, but then I try to find the fine print that will usually say otherwise.

  40. Consumerist Moderator - ACAMBRAS says:


    Thank you.

  41. Saboth says:

    Lol yeah, maybe they are like Citibank, sending me a piece of mail each week with fancy checks inside. I am sure if you send that out to a few million people on a weekly basis, it is going to cost A LOT of money. Perhaps their mail distribution and advertising are the “market factors” they speak of.

  42. kenposan says:


    It’s not a promo rate if they offered it fixed for life. Cap One did this to me. I had a fixed low rate for life and they changed my card to a reward card of some type. Don’t know, never used it. Then they started sending me mailing asking why I wasn’t using my card. Hmmm, you took away my fixed low rate and saddled me with a reward card I didn’t want. Is that math that hard to understand??

  43. notallcompaniesarebad says:

    My first thought is that 4.9% is too low to be profitable for the issuing company (you can’t even get a loan secured by your house at that rate). I’m shocked they ever said it was fixed for life. If they did, however, they shouldn’t change it and this person should get the 4.9% forever (what a crappy deal for the issuer though!). If the issuer didn’t advertise it this way, the consumer complaining about it is akin to complaining that their free cable just got disconnected: it never should have been in the first place.

  44. MOJO7489 says:

    It seems to me that most people here love to complaint, The fact of the matter is Credit Card company sells your debt to asset backed securization market. Basically CC borrow money at 6% and lend you for 12.99%, Since CC debt is a nonsecured loans, they may not collect anything if you default, therefore CC rate is high. Every year about 4% people default on their loan, so higher interest rates on CC to compensate for the risk they are taking

  45. BugMeNot2 says:

    I am a Platinum card member and have been for 10 years. My card had what I now realize was a higher rate of 12.9% “fixed”. One week they sent me a notice saying that for being such a great customer they were going to raise my limit my $1000. The following week, I got the opt out notice about the interest rate increase that many people say they didn’t receive. My options were to keep the account at 19.9% (!) or close the account and continue to pay it at 12.9%. Now of course I found the timing suspicious because I had just charged a large amount after not using the card for a while. Luckily it was only temporary and I just paid it off. But, since this is my oldest credit account, I still need to keep it open for my FICO score. Before this rate hike, I was really happy with them. Their customer service people were pleasant enough and their website was very easy to use. This decision has made me feel very negatively toward them now and I will not do further business with them. They can’t possibly stay in business after a stunt like this.

  46. Anonymous says:


    I AM SO PISSED! I have never received such bad service my whole life!
    This is a series of events that just keep getting worse. I lost my capital one card and asked for a replacement. It took several calls to have my card replaced because the person I spoke with kept confusing my card number with that of the other cardholders in the company. When I finally got the new card and I tried paying the balance using capital one’s automated system, their computer says, “A new number has been assigned for this account. ” It then transferred me to a customer service rep (or should I say anti-customer service rep) who was very rude. I told her that I was frustrated and that I wanted to be transferred to a supervisor. Several minutes later, a supervisor got on the line and asked what she could do for me. I told her that I was frustrated since this is the 5th time that has happened in 2 months. I told her that they need to improve their customer service and be more efficient. She started getting defensive and said that there is nothing wrong with their customer service in India. I said that if she is already getting defensive about my complaint and she is a supervisor, then I said that that is unfortunate because the supervisors are supposed to lead and be a good example. She got really sarcastic and said, ” We have the best customer service in India!” I told her I disagreed, based on her attitude and several others before her. She huffed and puffed and snapped, ” You can call back later when you are feeling happy!” Then she hung up. What a biyatch! I can not believe this woman! I can not believe why Capital One would outsource our jobs to countries like India, that don’t even give Americans decent customer service. We need jobs in the US. We need to get back this customer service jobs that are being given away overseas and not being appreciated. And—- these people insult our intelligence and treat us like s—t! This is terrible and needs to stop.
    NOTE: Google the words: Capital One complaints and you will find hundered, even thousands of complaints. It’s time to do something about this situation. Either boycott Capital One or stop outsourcing jobs to India and elsewhere.

  47. Anonymous says:

    They want to raise my rate to 22.6%, basicaly because they can, not because I defaulted, which I did not.
    My payment due is usually $0.00!
    I guess by keeping ahead of the bill, I cost THEM money?
    Damned loan sharks! Thank your rich assed Congressman.

  48. Anonymous says:

    I have been a Capital One customer since 2003. I’ve always kept my account in good standing. Today I got a letter stating that effective July 2 my APR will be increased from 8.3% to 17.9%. I called to complain and talked to some lame supervisor who gave me the same excuses that were in the letter. The increase was due to “the challenging economic environment”. I was told my only two options were to suck it up and live with the increased APR or opt out which means closing my account, locking in my current lower APR and paying off the balance. Is Capital One brain dead? Are they living on some other planet? Don’t they know that everyone is facing “the challenging economic environment”? Increasing the APR only serves to saddle more people into more unwanted debt any prolongs paying down account balances. If you received this same letter send Capital One a message and opt out. Their greed is shameful!