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Cap 1 debit mastercard

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deaster61
New Member

Cap 1 debit mastercard

I am wondering if anyone has any experience with the Capital 1 debit mastercard.  I received an email today about it and it sounds pretty good.  They give 1 point for every dollar spent and can hook it to your existing bank account.  I pay with my debit card alot, so the rewards could add up.  There is a 9.95 yearly fee--no other fees they say.

 

I just opened a new checking and savings account at a local credit union (we recently moved).  I do want to establish a good relationship with them for future needs.  I wonder if this would be viewed negativly by the banks or credit unions--do they lose money if you run your transactions through another bank?  Any feedback would be appreciated!  You have all helped me so much already!

Message 1 of 4
3 REPLIES 3
MojaveMoon
Established Contributor

Re: Cap 1 debit mastercard

Here are three articles about this. This type of debit card is called a "decoupled debit card"


"Decoupled Debit Card Lives Again!"


"Oh, Mama, I Got Them Cosmic Checking Account and Debit Blues Again"

First [...] Here’s the deal: it [Capital One's decoupled debit card] is MasterCard logo’d, and when a transaction is performed it is routed to Capital One, which takes the fee (thank you very much), converts it to an ACH transaction, and forwards that on to you for payment (rip off your fee very much). Other than that, it’s a debit card just like yours – usable anywhere and free.

Now, I’m not sure exactly how fraudulent and disputed transactions will be handled, but Capital One assumes the risk in this area and I imagine it did just a teensy bit of analysis before deciding the risk was worth the investment.

Second, HSBC and CVS/pharmacy have jointly announced they will issue a CVS-branded debit card processed through Tempo’s payment network that essentially links the customer’s checking account to their CVC ExtraCare account. Same proposition, basically, although Tempo also has roughly 200,000 additional retailer locations where the card can also be used. There is a summer pilot planned for this card in Indianapolis.

It’s pretty clear what the intention is here. Both Capital One and HSBC want to take a 10-foot crowbar and separate debit transactions from a customer’s checking account. And they have a pretty good proposition – consumers that use the Capital One debit card will get credits in the very same loyalty program as they get with their credit cards. You want airline miles? Got ’em. Hotel points? Si. CVS loyalty points via HSBC? Done. Not a bad opening argument – but more on that later.

[...]

Merchants that can get a spif from Tempo, Capital One or anybody else will get on the bandwagon fast. One interesting spin is that merchants will pay no interchange on on-us transactions (purchases at their store using their issued debit card), which gives them the option to make the rewards program that much richer.

Customers [might] experience too many real or perceived service issues and will come back to, or never leave, their banks. For example, they would have to call Capital One, not their bank, when a problem occurs. They’re already tired of dealing with too many people, so they’ll stay with their bank, which is already giving them pretty good service.


"CapitalOne attack Banks with standalone debit card"

CapitalOne are basing their business model on the transaction revenue associated with the card. The key there is that the overall profitability of that chequing account drops radically for the Bank. They are reduced to funds management and the account fee for revenue. The part I am not so clear on is the $40-$50 debit card income that CapitalOne pick up. The interchange fee structure is murky at best, and worthy of a future post. Meantime we can assume CapitalOne are making money on the card, and someone (Banks) are losing.
Message Edited by MojaveMoon on 10-24-2008 12:20 PM
Message 2 of 4
MojaveMoon
Established Contributor

Re: Cap 1 debit mastercard

Here is someone's personal experience with this Capital One debit card. This was posted on another forum last summer:


"I have the capital one "decoupled debit card" got it in Nov 2007, although I haven't used it in at least 4 months.


Let me sum it up as...

What a nightmare.

1) it is extremely hard to balance your check book. Unlike paypal (which i use reguarly) they batch several transactions together and then debit 1 big amount from your account. sometimes, they change there mind and debit an individual transaction, and no its not based on amounts. I have had $3 transactions debited individually, while several $100+ transactions were bundled together over a several days. When you see $324.23 debited from your checking account, you don't know if that is a single unauthorized charge, several authorized charges added together, authorized charges double or triple charged, etc. So you have to go to there website and view what was included in that batch to see if all charges are right and authorized.

2) They will cut your debit card off without notice for any reason. I had to keep my real debit card in my wallet because you never knew when they were going to turn off your debit card.

3) There computer accounting system isn't very accurate. In Jan 2008 debit card was off for over 2 weeks, they claimed they sent 3 charges to my account 1 for $3.43, 1 for 76.39, and 1 for 43.42 and that they were returned as NSF. Funny thing was my checking account balance was well over $3,000 and not only that the charges had cleared my account. My online banking showed them as processed and cleared. When I called in I was told that even though my online banking showed them as cleared there computer showed them as returned and if they weren't returned the computer would update in the next 3 business days. 5 business days later I call back and get a rude agent, I demand a supervisor who agrees to let me fax a copy of my online banking statement because my account is still suspended because the computer still shows these as returned NSF. I fax the statement, another WEEK goes by before they take my account off "suspension" and its available for use again, and only after yet another call from me. I told the agent, look, its been 2 full weeks if it was going to be returned there is no way an electronic ach wouldn't be returned by now, I have faxed a copy of my online banking statement and your company has had ample time to review and process it, if you want we can conference in USAA FSB and you can confirm with them that the amounts in question cleared my account on the exact date in question and was never returned NSF. This agent put me on hold and talked with a supervisor who took my account of suspension, they later called and offered my a whole 5,000 rewards points for my trouble, which I kindly accepted, however I haven't used the debit card again, I guess If I want to keep it I better use it or they'll prob cut me off for non-use.

AFAIK there is no fee with capital one's card, and IF your paying your capital one credit card online (like I do) they already have your banking information.
"
Message Edited by MojaveMoon on 10-24-2008 12:37 PM
Message 3 of 4
deaster61
New Member

Re: Cap 1 debit mastercard

Thanks so much for the info.  I think I will delete that email and stick with my bank card!  It sounds like a headache that I don't need.  I wonder if it will really catch on with many people?  It seems like the banks could have the potential to lose some real money if alot of people began using these cards.
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