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Established Contributor
Posts: 766
Registered: ‎01-16-2012
0 Kudos

Re: Capital Ones Last Chance

I understand you are frustrated. You worked hard to improve your credit, other companies are "rewarding" that and Cap 1 isn't. But keep in mind that Cap1 and Amex have very different business models. Cap1's entry into the subprime market was driven by a huge amount of market research and the refinement of a very innovative computer algorithm. Their goal was to make money from those with subprime credit WITHOUT exposing themselves to significant risk. Their solution was to offer cards to very subprime borrowers, but charge an annual fee large enough to offset the expected defaults and keep the limits low to lower the impact of individual defaults. The system was worked incredibly well for them, as their percent of bad debt was (last time I looked) the lowest of the major national lenders.

Cap1 also has a prime lending arm, which markets products like the Venture and Cash cards. I think they would cause a lot less confusion/resentment if they chose a different name for the two products (the way HSBC kept HSBC cards distinct from Orchard or Household cards), because they really are two separate businesses.

Cap1 has recently realized that the group of consumers who got nailed in the financial collapse are not the same as the group that had bad credit during a boom. They are realizing that some of these customers had one time disasters from which they are recovering and that Cap1 is losing business by not keeping up as those customers restore their credit and begin to use other products again. This is what the XO is trying to address and I believe them when they say they are re-evaluating their process. But this is new territory (transitioning from subprime to prime with the same borrower) and they haven't found a model that works yet. When they do, I expect you will see some sort of automated process for upgrading. Until then, it will be a bunch of hoops.

I know I'm biased, since I actually got a bigger bump from Cap1 then from Amex, but I also think getting upset at a lender for following their model isn't useful to you. They have some good products. If those products don't work for you, don't use them. But don't let your anger blind you to the uses their cards (or other investment products) may have. You may find yourself going to Paris for the weekend when that new special someone in your life asks you to (just an example) and find that the only card you have with no FTFs is your Cap1. That's a real value and worth keeping around, especially with no AF.

Just my 2cents. Enjoy

In wallet: Ink Plus 10k, AMEX TE 25k. In bag: CSP 16k, USAA WMC 15k, Hyatt 13k, United MPE 12k, AMEX HHonors 3k. In SD: Cap 1 QS 5k, Discover IT 7k. FICO 08 says my EQ is now 844, was 510 in 2010.
Regular Contributor
Posts: 242
Registered: ‎06-27-2011
0 Kudos

Re: Capital Ones Last Chance

Thanks for that explanation - I'm not as angry as my posts may have made me seem just sucks haha. But now I understand why as per your explanation. Since they gave me a CLI albeit however minimal it was I do intend to keep it for AoAA (oldest card I have) and util% purposes, and you never know you an emergency could happen or something like you said - I just don't have space in my wallet for them.

Starting: 563 | Current: 748 (TU 8/15) | Goal: 800 | Garden since: 08/10/2015

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