Beware the recent Capital One changes in terms - 29% interest rate !! Fine print worth reading

[Anonymous]

Last week I received a change in terms proposed for May, 2009 from Capital One that was beyond belief.  If an accountholder is late three days twice (maybe three times) in 12 months, their interest rate will go to what is now 29% (prime rate plus a 20+% spread).  It will not come down until the accountholder is not late for 12 months.  Apparently there are no usury laws in Virginia.

I am all for credit card reform, I don't want to be paying off someone else's bankruptcy, but when the cardholder is penalized, and the issuing banks can still freely hand out credit offers without reform on their end, it makes a very weak statement of the banking industry's true intention when they stiffened bankruptcy abilities a few years ago, we want you to be accountable for your alcoholism, but by the way, here's another bottle of whiskey for you...   

I am not nor have I ever been an abuser of consumer credit, I have used Capital One's money at a fixed rate of 3.9% for about 5 years, and recently had to pay off the $1500 balance for a mrtg. refinance.

Thanks for the loan, Capital One, I declined the change in terms, and you will now be a historical account for me, despite your "credit card manufacturing lab". Capital One's fine print is definitely worth reading this time around. 

[MattH]

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@Anonymous wrote:

Last week I received a change in terms proposed for May, 2009 from Capital One that was beyond belief.  If an accountholder is late three days twice (maybe three times) in 12 months, their interest rate will go to what is now 29% (prime rate plus a 20+% spread).  It will not come down until the accountholder is not late for 12 months.  Apparently there are no usury laws in Virginia.

I am all for credit card reform, I don't want to be paying off someone else's bankruptcy, but when the cardholder is penalized, and the issuing banks can still freely hand out credit offers without reform on their end, it makes a very weak statement of the banking industry's true intention when they stiffened bankruptcy abilities a few years ago, we want you to be accountable for your alcoholism, but by the way, here's another bottle of whiskey for you...   

I am not nor have I ever been an abuser of consumer credit, I have used Capital One's money at a fixed rate of 3.9% for about 5 years, and recently had to pay off the $1500 balance for a mrtg. refinance.

Thanks for the loan, Capital One, I declined the change in terms, and you will now be a historical account for me, despite your "credit card manufacturing lab". Capital One's fine print is definitely worth reading this time around. 

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My wife and I get lots of pre-approved offers from Cap One, which we feed to the shredder.  We don't need new credit at present: her Citi has a limit of $15K, my Citi has a limit over $20K, my Discover has a limit over $10K, my AMEX Gold has no fixed limit, and our shared Chase has a limit over $25K.  The lowest APR is on the Chase (5.25%), the others vary but have no practical impact on us because the only interest we pay is our mortgage.

Message Edited by MattH on 02-14-2009 11:21 PM

[Anonymous]

i think almost all cards do this.

[Anonymous]

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@Anonymous wrote:
i think almost all cards do this.

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Even if the rate itself is very high, I agree. It's a pretty normal condition. It's even generous, as it still lets you pay late once without penalizing you. Some ccc's will raise your rate immediately after you first misstep. 

[haulingthescoreup]

It's a cold, cruel world out there! It behooves all of us consumers to pull up our socks and stay on top of things.

(sorry, I've been up too long, lol!)

[MojaveMoon]

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@haulingthescoreup wrote:
It behooves all of us consumers to pull up our socks and stay on top of things.

(sorry, I've been up too long, lol!)

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 I haven't heard that expression before. That's an image that still has me chuckling.

Message Edited by MojaveMoon on 02-15-2009 02:47 AM

[MattH]

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@MojaveMoon wrote:

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@haulingthescoreup wrote:
It behooves all of us consumers to pull up our socks and stay on top of things.

(sorry, I've been up too long, lol!)

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 I haven't heard that expression before. That's an image that still has me chuckling.

Message Edited by MojaveMoon on 02-15-2009 02:47 AM

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If you haven't heard that expression, you must never have lived in the Upper Midwest or the rural Southeast (I'm from Wisconsin, my wife is from the VA-TN border, and both of us often use that expression).

[rubaty]

Maybe I'm reading this wrong but I think you are overreacting...the change in terms only applies to accountholders that are late not to accountholders in good standing.  What's wrong with that?  Late payers should be penalized.

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@Anonymous wrote:

Last week I received a change in terms proposed for May, 2009 from Capital One that was beyond belief.  If an accountholder is late three days twice (maybe three times) in 12 months, their interest rate will go to what is now 29% (prime rate plus a 20+% spread).  It will not come down until the accountholder is not late for 12 months.  Apparently there are no usury laws in Virginia.

I am all for credit card reform, I don't want to be paying off someone else's bankruptcy, but when the cardholder is penalized, and the issuing banks can still freely hand out credit offers without reform on their end, it makes a very weak statement of the banking industry's true intention when they stiffened bankruptcy abilities a few years ago, we want you to be accountable for your alcoholism, but by the way, here's another bottle of whiskey for you...   

I am not nor have I ever been an abuser of consumer credit, I have used Capital One's money at a fixed rate of 3.9% for about 5 years, and recently had to pay off the $1500 balance for a mrtg. refinance.

Thanks for the loan, Capital One, I declined the change in terms, and you will now be a historical account for me, despite your "credit card manufacturing lab". Capital One's fine print is definitely worth reading this time around. 

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[MattH]

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@rubaty wrote:

Maybe I'm reading this wrong but I think you are overreacting...the change in terms only applies to accountholders that are late not to accountholders in good standing.  What's wrong with that?  Late payers should be penalized.

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Yes, of course late payers should pay a price, BUT the price for even minor mistakes is frequently very very high.  For many credit card companies, late fees are a MAJOR profit center so they try very hard to trick people into paying them.  For instance if the fine print in the contract says after 1PM on the due date a payment is considered late, guess what happens if your check happens to arrive at 1:15PM?  I am NOT making this up, I once paid a late fee for a check that arrived 15 minutes after the magic instant.

[GregB]

I think you are over reacting to a perceived problem.

In today's credit environment, interest changing to 29% after 2 late payments is normal. There are far worse out there. Capital One originally had a reputation for low promotional offers that would get very ugly with just one mis-step. They have now become much more reasonable, perhaps better than average.

I am very happy with one CapOne personal and one CapOne business CC but then I would never be late. Chase did worse than that when my ex pulled a stupid stunt at separation. I would still rate Chase #2 in preference for the companies that I use.