Applied for Best Buy Store Card.... Approved for Store Card... Got Reward Zone MasterCard...

[Artdogg]

Hello All!

     I applied for the Best Buy Store Card.   They told me I had to call a number.  I called the number the rep told me it would be a $59.00 annual fee on the card. I am like okay and confirmed my identity.  She told me I would have a $300.00 limit thinking it was the store card. Went back to the website and it shows the picture of the store card. Called HSBC on my Orchard Bank credit card. It asked me to enter the last four digits of my card number.Usually they would tell me my card number. Threw up a red flag. Talked to a rep at HSBC.  Here I am getting the Reward Zone Mastercard.  $59.00 annual fee 21.74% interest rate.  Just about as bad as my Orchard Bank credit card. 19.99% interest $59.00 annual fee $300.00 limit  What should I do. Should I keep the card or tell them to keep it?  I do not know what to do with this new account.  Pease help Thanks.

[jsucool76]

When did you apply? I was under the impression they got rid of the gold 59af mastercard at bestbuy.

[Artdogg]

Hello jsucool76,

     Just applied Friday, January 18th. I guess they haven't. Have been trying to get a CLI from Orchard Bank and no luck I tried this morning and they are in transition to Capital One and they are not giving increases. I have had the card almost two years and still at $300. And no luck on my two Capital One cards either. One is secured and the other one is unsecured,

Artdogg

[jsucool76]

On the application it says

"When you submit your application below, we will first consider you for a Reward Zone® Platinum MasterCard. Based on your creditworthiness, if you do not qualify for this product, we will automatically consider you for the Reward Zone Credit Card, which is a private label card."

It doesn't say anything about the gold card with annual fee anymore. I would call up and say nothing with an annual fee was listed on the application or in the T&C and you want either the store card or plat card.

[TiggerDat]

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@Artdogg wrote:

Hello All!

     I applied for the Best Buy Store Card.   They told me I had to call a number.  I called the number the rep told me it would be a $59.00 annual fee on the card. I am like okay and confirmed my identity.  She told me I would have a $300.00 limit thinking it was the store card. Went back to the website and it shows the picture of the store card. Called HSBC on my Orchard Bank credit card. It asked me to enter the last four digits of my card number.Usually they would tell me my card number. Threw up a red flag. Talked to a rep at HSBC.  Here I am getting the Reward Zone Mastercard.  $59.00 annual fee 21.74% interest rate.  Just about as bad as my Orchard Bank credit card. 19.99% interest $59.00 annual fee $300.00 limit  What should I do. Should I keep the card or tell them to keep it?  I do not know what to do with this new account.  Pease help Thanks.

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Looking at your siggy, you are spending way too much to have credit!  You should stop getting any card with an annual fee.  If I were a credit analyst with them I would look at the cards you have and also offer you the $59 fee cards knowing you don't seem to mind paying fees.  Capone is known for loving fees from customers.  For you HSBC cards and your Capone cards you should call or email the exec off and ask for them to give you a CLI, if they say no at least bargain with them to remove the annual fee.  Right before this I would call the regular customer service number for each and ask for the last fee to be waived.  If they say no, call back and ask another person until you get tired of doing so or until they waive it.  I got my Capone fee waived.  (Actually, I got it waived three times by never asking for it to be waived, just to be fully removed.  When they said they could waive it, I said this is not what I am asking for, I want to have it removed permanently.  I let them do what they wanted and chose my words very carefully so that they could not come back at me.  If they had tried, I would simply be able to say, listen to the recorded phone calls and you will see!  They love to choose their words carefully for their statements, which is why every rep says the exact same words.  I learned that in speaking to them I also am able to choose my words with even more care!)

[nyancat]

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@bernhardtra wrote:

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@Artdogg wrote:

Hello All!

     I applied for the Best Buy Store Card.   They told me I had to call a number.  I called the number the rep told me it would be a $59.00 annual fee on the card. I am like okay and confirmed my identity.  She told me I would have a $300.00 limit thinking it was the store card. Went back to the website and it shows the picture of the store card. Called HSBC on my Orchard Bank credit card. It asked me to enter the last four digits of my card number.Usually they would tell me my card number. Threw up a red flag. Talked to a rep at HSBC.  Here I am getting the Reward Zone Mastercard.  $59.00 annual fee 21.74% interest rate.  Just about as bad as my Orchard Bank credit card. 19.99% interest $59.00 annual fee $300.00 limit  What should I do. Should I keep the card or tell them to keep it?  I do not know what to do with this new account.  Pease help Thanks.

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Looking at your siggy, you are spending way too much to have credit!  You should stop getting any card with an annual fee.  If I were a credit analyst with them I would look at the cards you have and also offer you the $59 fee cards knowing you don't seem to mind paying fees.  Capone is known for loving fees from customers.  For you HSBC cards and your Capone cards you should call or email the exec off and ask for them to give you a CLI, if they say no at least bargain with them to remove the annual fee.  Right before this I would call the regular customer service number for each and ask for the last fee to be waived.  If they say no, call back and ask another person until you get tired of doing so or until they waive it.  I got my Capone fee waived.  (Actually, I got it waived three times by never asking for it to be waived, just to be fully removed.  When they said they could waive it, I said this is not what I am asking for, I want to have it removed permanently.  I let them do what they wanted and chose my words very carefully so that they could not come back at me.  If they had tried, I would simply be able to say, listen to the recorded phone calls and you will see!  They love to choose their words carefully for their statements, which is why every rep says the exact same words.  I learned that in speaking to them I also am able to choose my words with even more care!)

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How, exactly, is Capital One "known for loving fees from customers?" I simply don't see this, given most Capital One cards for good credit customers (except the Venture) have basically no fees. In fact, I'd argue that Capital One is known for having some of the lowest fees - with no foreign exchange fee on any card - a HUGE savings.

[TiggerDat]

Because most of their cardmembers are in the subprime category.  The bank only has a limited amount of funds for which it can loan people.  The fact that they are the 7th largest bank in the country is a factor in this.  Their credit cards on a tier level have fees for their subprime and most in their Prime do not.  They only have two tiers, sub prime and prime.  This means that they keep the cream of the crop in their prime category and the OK, average, and bad in their less than prime category.  Go over to their website and do their card matching service.  Put in average credit and you will get the option for a fee card.  They have caps on their limits for their sub prime cards.  They are also not known for giving CLI's for many, if not most, of their sub prime cardholders.  Instead they will simply say; you can apply for a new card.  There are multiple threads here and elsewhere who have people who have been trapped in a fee based card with them for many years.  Some of these same people have limits of $500 to $1000 and some have applied for a new card and gotten a $5,000, $10,000, or higher limit.  However, most will not, especially if it is early in their history or rebuilding phase.  Business week even did an article on this once!  Goverment regulators and lawyers have banded together over issues of this nature.  They have given many cards to many people with low limits and annual fees.  Part of the strategy is that if they default on one card, the likelihood is that they will default on another.  Fees for the cards, fees for the default, and what about over the limit fees.  With a low limit which never changes the possibility that you will one day forget increases and you get a fee. 

It is not about the simple aspect of fees for what kinds of cards they have, it is about the policies so they can collect fees from their customers.  Yeah, they have some cars such as the Venture card which does not have a fee, but they have the secured card, the basic rebuilder card, the cash rewards rebuilder, the platinum card, the really bad sub prime card with a $59 or $79 annual fee.  And yeah, they are more likely to let you have more than one of them.  It wasn't until last year that they stopped letting people have more than two of their cards, unless it was a private label card you wanted.  So I will stick by what I said!  Check out the Business Week article and check out the forums here and in other places about it.  Why would they give me two cards, instead of credit limit increase on the one I have?  I had two cards with them and for two years on each card I tried to get a credit limit increase.  I never paid late, I use the card for 5 times the limit one month even, I paid in full every month, I never had a returned payment, I did everything perfectly, but would they give me a credit limit increase?  No, buy they always are very happy to tell me that I can apply for a new card.  Yeah, I did that in the beginning and was paying a fee for having both cards.  I had to file with the Better Business Bureau for them to increase my limit on the one card I kept open. 

They have a policy which does not allow for customer initiated credit limit increases for their sub prime cards.  But they will give you another with a fee.  They say they review cards periodically, but if that were true my history with them and my credit score would have gotten me one.  Instead I had to use the BBB to get it, if I didn't deserve it with the help of the BBB they wouldn't have given it then either, but obviuosly I did!  (I even now have a card which is 4 times their limit and real Prime cards)  They do like fees! 

[nyancat]

Okay, if you have credit problems, yes, but doesn't anyone charge fees on cards for those with credit problems? I make about $25k a year, and got instant approval for the Cash Rewards with a $7500 limit. They're not exactly highly elite cards for the richest of the rich. Even for those with no history, they offer no fee cards - the Journey and the Cash Rewards for Newcomers. It seems to me that unless you're in a position where you have a credit problem, Capital One's fees are lower than the rest - and everyone charges those fees. Their secured card, for example, is one of the cheapest out there.

[CreditWorld2013]

Banks like profit making moves. So some do this by charging fees, high APRs, Foreign Transaction Fees, Merchant Fees, etc. In addition, they like a low default rate, people that revolve balances, and not to expose themselves by giving out large credit lines without the ability for them to be repaid. On other words, customers often have to pick which of the banks they feel more comfortable with and why. As for the OP, I would contact Capital One and if they can't help you contact the Capital One Executive Office and tell them the issue/s. 

[TiggerDat]

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@nyancat wrote:

Okay, if you have credit problems, yes, but doesn't anyone charge fees on cards for those with credit problems? I make about $25k a year, and got instant approval for the Cash Rewards with a $7500 limit. They're not exactly highly elite cards for the richest of the rich. Even for those with no history, they offer no fee cards - the Journey and the Cash Rewards for Newcomers. It seems to me that unless you're in a position where you have a credit problem, Capital One's fees are lower than the rest - and everyone charges those fees. Their secured card, for example, is one of the cheapest out there.

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This is true and I am not saying that they are the worst of them out there.  First Premier does have a client base and is a little easier to get than Capone.  Capone's strategy is designed a bit more in detail than others to insure that if there is an opportunity for fees, then they will reap them.  In some respects Capone has succeeded so well because they were one of the first to do strategy very well on many levels, including increasing their fee income.  Their marketing strategy has certainly paid off as well.  There are some banks out there who will even charge you a fee or a percentage of a credit line increase to get it.  They prefer to keep the customer at the level they are for as long as they can.  Imagine that you want a credit card and have no credit.  You get their secured card, with a $36 annual fee.  Then you want to move to increase your limit, they tell you at this time it can't be done, but you could go online and apply for an unsecured card.  You do so and there is a new credit inquiry on your report and your score is lowered.  Your average age of accounts is also lowered and this lowers your credit score too.  You want to get more credit and they give you a little more on your secured card and you are happy.  You ask for a limit increase on your basic card with them and they say no, but you could go online and apply for another card.  This time they offer you a cash rewards card with a $39 annual fee.  There is a ding to your credit and the average age of accounts goes down.  You now have 3 cards with them an a total of $1200 in credit and you are happy for the moment, but you are paying $114 in fees each year for the same amount of credit as if they would have simply given you an increase on the one card with the $36 annual fee.  Your score has also been lowered.

Now it is going to take you at least a year, if not two to get your score back up and to a level which is satisfactory for another card with a near prime lender.  Even if you were to apply now the bank would see 3 credit bureau inquiries and 2 new accounts.  They will want to see how you perform on those two accounts first, as managing 3 accounts is harder to do so than one.  In the long term this will certainly benefit you if you do it well.  However, since they are not known for giving credit increases, then when you can get a new card from another company they will probably match the limit or give a little more than the highest limit you currently have.  One factor in your score is the aspect of a high credit limit.  Once you break $2000 or $2500, I am not sure which, then lenders view you as less of a risk and your score jumps.  This makes it easier to get a new card.  If they don't raise your limit, but instead they give you another card with a fee, they are making more money and trapping your score at a lower limit for longer which makes you dependent on them for longer giving them fees.  (And heaven forbid if you go over or become late on one!)

If they do raise your limit regulary based on performance and usage, it is possible that within 2 years your limit would have gone above $2000 and broken that ceiling.  This means that they would either have to offer you a new prime card with more benefits or risk losing you.  When you apply for a card with them, they pull all three credit bureaus.  This insures that each bureau is covered in regards to an inquiry and lowering your score.  (At least they used to do this, I don't know if that policy has changed in the last year.)  They do have a very detailed strategy which insures that those with a harder time getting credit are trapped there longer with them and those that don't reap the benefits of their good credit.  They have a large number of sub prime cardholders, I don't care how many times I hear them say, 'we are a conservative lender.'

No they are not the most predatory bank out there.  Yes, they do have strategies which does make it too easy to get multiple cards with them and retain their client base at that level a bit longer than needed.  They also have strategies which mean those with bad habits will give them more money and stay with them also.  Their executive office told me point blank that there were two types of accounts; type a and type b and one type never or very seldom gets credit limit increases.  I already knew this, so there was surprise to me.  I have experienced some of this first hand with them.  Yeah, I made a mistake and I was willing to pay for it.  I have done so and have improved remarkably through first realizing my own mistakes and doing things right.  At some point they need to stop penalizing me and others who have also done so.  Their strategies have ended up with them paying huge fines in recent years, because what they did was not right.  My credit line in the same period with Merrick bank has tripled without me having to do anything.  Capone certainly is readily telling me to apply for a new card.

It is one reason why they quickly did away with the Orchard card product.  They're similar products are more expensive. 

Yes, it is true those with better credit can get great cards from them with no fees and lower interest rates.  A large percentage of their cardholders are not in that category.  Thanks for the friendly discussion on this.  Don't go away thinking badly about them, just know there is more to it than what some can easily see.  Trust me, there are others on this board that would react in a less than nice manner at the mere mention of their name.