Thank you for the links (unfortunately the fox news link is no longer working 
).
I had always defended Capital One to some degree since they had always had great balance transfer offers and since they had a reputation for not ratejacking. But after this I see now that I can put them in the same fair-weather friends category as Chase, Bank of America, and (now) Citibank.
Despite the age of my account, I'm thinking that within the next few years it might worth closing the account. Literally the only good thing left about the account (so far) are the balance transfer offers. The customer service is awful, I see that I can't trust them now to not ratejack, they won't let me convert this account to anything else, they used to deliberately not report the credit limits, and it wasn't until after I'd had my account for several years that they then informed me that, "oh, hey, guess what -- this account's credit limit is permanently capped at $ 10k"
).I had always defended Capital One to some degree since they had always had great balance transfer offers and since they had a reputation for not ratejacking. But after this I see now that I can put them in the same fair-weather friends category as Chase, Bank of America, and (now) Citibank.
Despite the age of my account, I'm thinking that within the next few years it might worth closing the account. Literally the only good thing left about the account (so far) are the balance transfer offers. The customer service is awful, I see that I can't trust them now to not ratejack, they won't let me convert this account to anything else, they used to deliberately not report the credit limits, and it wasn't until after I'd had my account for several years that they then informed me that, "oh, hey, guess what -- this account's credit limit is permanently capped at $ 10k"
@MojaveMoon wrote:
Thank you for the links (unfortunately the fox news link is no longer working
I had always defended Capital One to some degree since they had always had great balance transfer offers and since they had a reputation for not ratejacking. But after this I see now that I can put them in the same fair-weather friends category as Chase, Bank of America, and (now) Citibank.
Despite the age of my account, I'm thinking that within the next few years it might worth closing the account. Literally the only good thing left about the account (so far) are the balance transfer offers. The customer service is awful, I see that I can't trust them now to not ratejack, they won't let me convert this account to anything else, they used to deliberately not report the credit limits, and it wasn't until after I'd had my account for several years that they then informed me that, "oh, hey, guess what -- this account's credit limit is permanently capped at $ 10k"
Why would you complain about rate jacking. This is the norm in the credit world now. Name any bank and everyone is increasing. APR's. Its simple economics, banks need to make money and reduce their exposure at the same time. So basically they want you to use their card but not carry a large balance with them. Since all this economic trouble today is due to people spending more than what they could afford. I would encourage APR's to go up to 50% for anyone who carries a balnce for over three months on the same purchase.
I think most pple on this forum will agree that now is not the time to carry a balance on a cc, PIF and the interest rate increase will not affect you in anyway.
Thurston wrote:
One of the forum users said that this has become the industry norm.
Then what's the purpose of trying to maintain a high FICO score if you can still get the rates that are typically associated with lower score?
Actually interest rates associated with lower scores are even higher.
The fact is that the best interest rates always fluctuated with market forces. People with extremely high Fico scores got the best rates. Those people will still get the best rates and terms.
In addition to consideration of the FICO scores banks must now counteract the so called credit reform laws that are going into effect soon. The new law effectively freezes the interest rate on existing debt with only an obligation of making payments of about 2% per month until the debt is paid off. The banks will definitely not allow themselves to be stuck with interest rates on loans that could be lower than fair market in the future. The interest rates on balances for people who have demonstrated a track record of not PIFing are being raised even now. That practice is not necessarily linked directly to FICO scores, rather it is a result of the politicians mandating the "price fixing" of interest rates.
The new law allows the consumer to slowly pay off revolving balances at a "frozen" rate even if the fare market interest rates rise. If prevailing interest rates drop, the consumer could transfer balances to other lower "capped rate" credit cards. The banks are not going to let that happen. The law makers knew that that won't happen even when they were writing the laws. The politicians knew that the law will effectively raise interest rates for the vast majority of people who carry debt. They enacted that disastrous law which favors the banks and not the consumers anyway.
There will still be plenty of "promotional" lower interest rates.
The main difference is that all ongoing or "go to rates" must be higher than would have otherwise been necessary in a free market place. This is not a new phenomenon. Whenever the free market anticipates future "price freezes", the market reacts by quickly inflating prices to a ridiculously high level. Of course the consumers would stop buying products at the obscenely high price. The businesses preclude that from happening by offering temporary promo deals that could be withdrawn at any time.
In the early 70s when government mandated price freezes were being threatened, fast food places immediately more than doubled the prices of its product. Of course the temporary offer of two for the price of one deals were instituted at the same time. Do the math, prices more than doubled, and promos were only 50% off. The consumer lost out. That is what is now happening with the cost of borrowing money. The consumer loses. Don't blame credit scores. If your credit score was lower you would be losing more.
Thurston wrote:
My rate was not raised based on something I had done with that creditor or any of my creditors. It was done simply because they can. The notice even said that if the terms are not acceptable, you have one option - close the account.
The rate was reduced not just because "they can",
but also because they must as the result of the impending interest rate price freezes mandated by their congressional cronies.
If you choose the "close the account" option, you loose even more. Your score will probably suffer and you won't be able to get the lower "temporary" promotional inertest rate offers that will be ongoing.
Thurston wrote:
But before I close the account, I will make a few attempts to get the rate lowered and if that doesn't work, shift around my other accounts so that closure of this account (should I choose that option) does not affect my credit score.
If you get the rate lowered for now
it will only be raised back up right before the freeze goes into effect.
More than likely if you ask for a lower interest rate you will get a temporary promo offer that will allow your ongoing rate to stay in force.
You can choose to close the account or learn to play by the new rules. Many of us didn't stop eating pizza in the 70s. We just took the "temporary" 2 for 1 deals and life went on.