Capital One Has Something To Say To Me
We’re raising your interest rate just because we can, and we’re annoyed you don’t owe us anything. So there.
Well, that isn’t exactly what the letter I received said, but it might as well have.
This week I got a form letter/flyer from Capital One which informed me that they were raising my interest rate from the fixed 9.9% it was at to a variable rate that is currently 17.9%, effective immediately. Hey, thanks Capital One! I’ll get right on that…
We don’t have a balance on the Capital One card, and haven’t used it in several years. It was the first thing I completed paying off in my debt-destroying extravaganza, and hasn’t carried a balance in over a year. And to thank me, Capital One has finally gotten around to raising the interest rate. Hey, thanks. I appreciate it.
Many people who are anti-debt or anti-credit card debt destroy their credit cards and cancel them. We didn’t. It wasn’t a firm yes or no decision, it was more apathy on my part. I didn’t really feel passionately about getting rid of them, so I just kept them. My problem that got me into endless credit card debt wasn’t one of impulse control exactly, it was more poor money management. I wasn’t one to pull out a credit card and buy things on impulse. I used them as an emergency fund and then kept transferring balances back and forth while trying to pay them down until the next emergency. Once I figured out how to track my money and know what I was really spending and started having a cash emergency fund, I didn’t increase the credit card debt and began to reverse the process.
So, I still have them. Three, in fact. This we’ve had for about 10 years, and I have had another one since 1996. The last we got while we were paying down debt in 2007 to transfer our balance to a 0% rate. So closing this one isn’t closing my longest-held credit card. I think that means it won’t affect my credit score. And the longest held credit card also has a $40000 limit, so if for some reason I found myself in a position where I needed to use a credit card, that one would suffice.
So Capital One, I think our days are through. Thanks for everything… sort of.
If you enjoyed this post, make sure you subscribe to my RSS feed!
You can also: Stumble It! Bookmark Submit to Reddit Submit to Tip'd
May 22nd, 2009 at 11:43 pm
Ha! Now you can bask in the knowledge that their petty interest-rate increase doesn’t affect you in the slightest. You’re in control!
I love stories about people who get to snub the credit cards that otherwise seem to get away with whatever they want.
May 23rd, 2009 at 12:15 am
Unfortunately, since the CC companies have 9 months to wreck havoc, I suspect we’ll all be getting such sweet little notes
The next shoe[s] to drop will be adding annual fees, and cutting back on your credit line. Oh well!
May 23rd, 2009 at 12:16 am
yup i got that letter about a month ago but they said they wouldn’t raise my rate until january and so far they’ve been true to their word.
i unfortunately have a 6400 balance on it but am working on paying as much of it as possible off by then..
May 23rd, 2009 at 6:45 am
I didn’t even get a letter. I have a $6500 balance and noticed on my statement they raised my rate from 2.99% to 17.99% “due to a check of my credit” as they told me…I have never been late on a payment and my credit score is 760! I am so livid, as soon as I pay off the balance (which should be in a few months) I will never use their card again. EVER.
May 23rd, 2009 at 6:51 am
Same thing happened to me with C.O., but I have no balance… I should just cancel it. This is the only card I have that charges an annual fee, too.
I feel like the credit card companies are scrambling to capitalize on everyone’s debt. They’re making little effort to help people manage their debt during this financially difficult time.
May 23rd, 2009 at 8:43 am
My husband just got his capital one card maybe a year or so ago. It was 0% interest for like 18 months and had 5.9% interest after that. He received the same letter and we do have a balance (only about $600) and his is going up to over 15% and it’s no longer a fixed rate. But his doesn’t officially go up until 2010 which I didn’t understand. Why would they send a letter if it wasn’t going up until next year. Very weird. Doesn’t matter anyway. We were planning on getting it paid off by November anyways because that was when we were going to have to start paying interest on it. After that I don’t care what they do, because I’ll just cancel it if I have to.
May 23rd, 2009 at 9:19 am
I got a similar love note from Capital One this week. Unfortunately they raised my already too high interest rate to one even higher. Even more unfortunately, they’re second on the list to keep paying off because WaMu jacked up my interest rate to something completely ridiculous just before they folded.
May 23rd, 2009 at 10:04 am
I received the same letter. The reasons they gave were because of my current Purchase rate (which is nothing since I don’t use the card at all) the length of time I have had the account and the challenging economic environment. Okay so how does raiseing the rate to such an absurd amount help with the challenging economic environment? Obviously it is only putting money in the pockets of capital one while putting serious strain on people. Way to go capital one!!
May 23rd, 2009 at 7:32 pm
I’ve received those same love letters from both Cap 1 & Discover. No balance so I could care less. I still use the cards every now and then and then pay them off immediately - sometimes even before the statement arrives. I haven’t payed a lick of interest in a very long time. I know they hate me - the feeling is mutual.
May 24th, 2009 at 12:52 am
OOOooo… I got that same letter last week. I just recently started using the Capital One card again after WaMu tanked and Chase took over their cards. Other than a magazine subscription that auto-renews, I hadn’t charged on the Capital One card for nearly 6 years. Yep, my 9.9% interest rate just drastically jumped. I pay of fthe balance every month, so even with the interest rate hike, they’re still not making any more money from me.
I’m waiting for the next letter that says my $16,500 credit limit is now $1,500. Now that will mess with me; not because I charge even close to that much, but because it will change my credit rating if the debt ratio changes.
May 24th, 2009 at 1:52 am
I would call and complain and see if you (and Christina, above) could get it reversed.
I find it really bizarre because my Capital One rate (here in Canada) has been dropping recently even though my card is pretty well maxed out.
May 24th, 2009 at 11:42 am
****You should definitely NOT, I repeat NOT, close that credit card! Closing it will actually reduce your FICO score, and by more points than you think… And you will then be creating a ripple affect that will change your financial life. Your car insurance will go up, just for starters! Just stash that credit card in the file drawer (or freezer, or wherever you keep your credit cards to prevent yourself from using them on the spur of the moment) and forget about it. Take it out every four to six months, and use it for a purchase you already have the cash for. Then pay that charge off within 24 hours of the purchase (since the credit card companies are now begining to remove the normal grace periods we have all come to rely on for a “float”, there’s no time to waste). Unfortunately, credit is still one of the those staples in life we can’t live without, you’ve got to be smart(er) with your decisions about credit cards. I don’t care what anyone tells you, credit cards are the single-most important tool/driving force in maintainingthe best possible credit score, short of paying your bills ON TIME! Don’t let the credit card companies run you out of the credit game…and into bad credit. The financial choices you make now will affect you daily, for many years to come. The real question is: Do you want them chasing you down the financial street, or opening the most important financial doors of your life for you?
May 24th, 2009 at 5:54 pm
I, too, received the same letter from Capital One even though I have been a good customer for years and always pay my bill on time. Even worse, my own credit union, which I have done business with for years, canceled my Visa card because I haven’t used it in 18 months!
May 25th, 2009 at 9:08 am
I got a similar letter that raised my rate from 5.5% to over 15%. I have also never been late on a payment and have excellent credit. I refused their new terms and according the letter, I am able to pay off the balance under the old terms. However, that did trigger them to cancel the card. I then immediately applied for a card at Simmons First National Bank which boasts a 7.25% FIXED rate. My credit rating is very good, so if canceling my Capital One card impacts my credit a little bit in the short term - so be it! I am sick and tired of these card companies dictating these types of terms and then expecting consumers to just sit back and take it because they threaten our credit ratings (over basically nothing). As long as you are stable, I don’t believe the impact will be deep or long. As far as I’m concerned, they can take their card and shove it if they don’t want customers who actually pay their bills.
May 25th, 2009 at 9:41 pm
BOA lowered my available credit from $15K to $7K a week or two ago. I called to cancel the card and another AMEX card through them since I don’t use them anyway. Turns out they had cancelled the AMEX card themselves about 6 weeks ago, although I didn’t get the letter until about a week after my call. They also closed ther other account with the lower credit line without even asking why - they obviously were hoping I would do this and consider their balance sheet problems, I understand. I have a Citibank card with $25K available that I use but pay off every month. They raised the interest rate to 19.99% a couple months ago, but I’m still not paying them interest, so while I shouldn’t care, I do. The problem is that no one else has any better deal, so I’ve started paying cash for everything except really big purchases (such as my daughter’s upcoming bedroom furniture) and I’m spending less and saving more - what a concept!
May 26th, 2009 at 4:40 am
Unbelievable . . .
These people are loan sharks in corporate clothing.
It seems they are all pulling everything they can before the new laws kick in . . .
May 26th, 2009 at 7:06 am
I think you can call Capital One and complain and they might not raise your interest rates…plus you can threaten to discontinue your card as well. They might agree to your previous 9.9% vs. you not even carrying their card. Just a thought.
May 26th, 2009 at 9:11 am
Yep, I got the same letter. I’ve had my card for a few years, and currently have a balance of just over $100. Sadly since I’m in the process of trying to buy a new house, that balance is going to have to sit there for a month or two, because all available cash is needed to pay the binder on the house. I hate Capital One.
May 26th, 2009 at 11:30 am
I got the “love note” 3 months ago –said they would raise my fixed 5.99% to 15.99%. I called immediately and after some discussion was told that they could leave it at 5.99% for 9 months then it would go up. I thanked them for giving me time to look for a different card. The customer service agent replied that they “hoped good long-term customers would realize that they only had to do this because the economy was so bad.” After laughing, I replied as politely as I could, “I don’t think so, but thank you.”
May 26th, 2009 at 11:47 am
That rate increase is ridiculous. Unfortunately, while i applaud you for closing out that account, it will affect your credit score, but just not as much as closing your oldest credit card account.
Closing any credit card account in effect lowers your ratio of debt to available credit. So you’re smart to keep the card that is both the oldest and has the largest credit line.
Way to go!
May 26th, 2009 at 1:35 pm
So, I can’t remember where exactly I read this, but it wa sin relation to the new credit card legislation–that it’s very likely that most credit card companies will go back to charging an annual fee.
I’m curious, where would you draw the line between keeping an account open to maintain a healthy credit/debt ratio and closing the account due to an annual fee?
Just musing.
May 26th, 2009 at 3:30 pm
I had a credit card close the account. One of their reasons was that I had too little credit that was over 18 months. I have not opened a new account in 3 years. Another was too many late payments. I haven’t had a late payment in 2 years. This is the second credit card in a year that has closed the account. The only thing I can figure is that I have stopped using them while still owing money they are closing the accounts.
May 27th, 2009 at 8:07 am
I’ve had the exact same question as Wayward.
I all CC Issuers go back to charging an annual fee, would you keep your accounts open?
I would probably keep at least one of them open as long as the annual fee is reasonable (as in 25.00 or less reasonable). I wouldn’t be doing it to maintain a good credit rating though. I use my card for large purchases, reservations, and occasional rewards. I also like the extra options it gives me. My EF is in a high yield savings account and it takes a few days to transfer money to my savings. In a pinch, I would just use my cc and then pay it off once the EF funds had been transferred. Credit cards can bail you out sometimes - in my case, they just rescued my butt a couple of weeks ago. I don’t carry cash and always use my debit card. I stopped at the only gas station in the area that still allows you to pay inside after you’ve already pumped your gas. I filled my car up and went inside to pay. I almost puked when the lady told me my debit card had been declined. I knew that it was a mistake, but she couldn’t get it to go through. So, there I was - a full tank of gas and no way whatsoever to pay for it! So I used my credit card and went on my way. Turns out the ATM network for my credit Union was down for some reason and they had it fixed in no time, but still - I would have been screwed if it wouldn’t been for the credit card.
June 1st, 2009 at 2:31 pm
I had a Capital One card for 12 years and never had a late or missed payment. I was an excellent customer. Then a few months ago they sent me a letter saying they were going to close the account due to inactivity. I called to ask them to keep the account open b/c it was my oldest card. I told them I’d use it more. Seriously. But they said they couldn’t do it. The account HAD to be closed and the only thing I could do was close it on my own so that my credit report reflected that I had closed it rather than them closing it. After I closed it, I realized what a crock of shit it all was. How dare they close my account with no warning? What the hell was that about?
I’m tired of an economic climate where the customer is expected to coddle the business. I think the kind of thing that Jodi said above is the kind of thing that keeps perpetuating this cycle. Sure, cancelling your oldest card my affect your credit score, but that doesn’t mean that you let your cc company jerk you around.
June 11th, 2009 at 12:22 pm
I absolutely love Capital One. Don’t ask me why. I am a dual US/CDN citizen so I have both a US and Canadian card. I also have a savings account with them. Their customer service is always perfect, they transfer money quickly and their online interface is one of the easiest to use. I can’t really explain why I like them and it’s rare to say that these days about a corporation.
That being said, my 9% rate was what kept me active there transferring balances and the like. Since raising me to almost 18% I have sort of lost my desire to use them. I have a couple of cards at 12% I may switch to. It’s the PRINCIPAL of the matter. I don’t have much in terms of interest payments so 5% on the high or low end won’t hurt me much even over a year. But being a great customer, over paying, never being a “problem” and having my account jacked up bothers me.
July 17th, 2009 at 9:17 pm
I got an offer from Cap. One for 5.99 fixed forever. I called to verify it was fixed forver,as it stated.
I was told YES,it could never be changed for any reason. I was very specific with them and decided to get it. About a 1 1/2 to 2 years ago,I heard on the radio,they Cap. One was raising everyones rates. I called and the lady told me,Yes they were raising my rate. I told her:”You can’t raise mine,as I have a 5.99% fixed forever” She told me,she would take a closer look at my account. She came back and said,”You’re right,you’re one of the few”. A number of months ago,I go a letter,saying they we’re going to raise my rate,but I just threw it away,as I didn’t think it affected me. Well they raised it to 15.90% and they won’t change it. I asked them to send me all the original paper work. But was told I had to make the request in writting. Which I did,asking for everything.the phamlet with the offer and all relavent papper work and anything with my signature.
I got a letter a few days ago,saying they had nothing and that everything must have been done over the phone.So, I called a raised some more HELL with them and now they are supoosedly sending me everything,and it supposedly says,what the terms are and that they can change them at anytime. I guess I’ll just have to wait and see,what they send.