HELP! Where can I file complaint about Capital One rate increase on an account in good standing?

[Anonymous]

I have a Capital One account that I have NEVER been late on.

I was carrying a balance of $1600 at 13.9%.

In May I took advantage of their balance transfer offer and transferred additional $600 at 0% for 6 months.

Yesterday I logged in to check my statement online, and I was horrified to see that my APR has jumped from 13.9% up to 22.9%!!!

I spoke with a supervisor who told that rate change has NOTHING to do with my credit rating or my standing as a customer - just a way for the bank to make more money. Furthermore, he told me that Cap1 had sent out a letter in February announcing that they were making a change to the terms of agreement, and that the APR would be changing to 22% and that I had a choice to OPT OUT by replying with such a request. Apparently the Opt Out involved CLOSING the account.

I do not recall receiving any such letter. And if I did, I think I would have assumed that such a rate hike would only apply to FUTURE PURCHASES, not to present balance. Shouldn't they have sent thier customers an email, and also posted such a drastic change to my online account page?

WHAT SHOULD I DO? Is this action even legal? This is not simply following an increase in the published interest rate. This is predatory and usurious. I understand penalizing an account holder for missing a payment or a changing credit score, but to arbitrarily change the rate on existing balance? What is stopping them from next month deciding to charge me 250% APR on my existing balance?

What agancy is responsible for regulating these credit cards, and where do I file a complaint?

Thanks.

Message Edited by dollardan on 07-17-2009 12:21 PM

[GregB]

I hope you didn't pay a BT fee to do that BT in May because the next $600 in payments that you made or make in the future pay off that balance. You would continue to pay the purchase rate on the $1600.

Yes it is legal. Everyone that has had this happen is irritated.

Where you file a complaint is what you did by calling them. You can call again or send a letter but there isn't anyone else that will be able to help. Having many thousands of complaints got the new credit card laws in the works.

Assuming a new rate was on future purchases is completely wrong. Nice thought but their terms are spelled out when you opened the account. There is a maximum interest rate on CC. I think it is around thirty something percent. Usery is a different amount on different types of loans. Payday loans and Pawns work out to several hundred percent yearly. Typical Loan Shark rate is 5% per week.

What you should do is pay them off or talk to them about opting out, which would almost certainly close the account. The best thing would be to do a BT from another account and then eventually pay that off. Is that option available to you?

[Anonymous]

Legal? Yes.

Aggravating? Yesiree...

Can you afford to PIF?

[score_building]

1st rule of BT is to have a zero balance b4 completing the transfer.  unfortunately, this is what they hope for- that a card holder will mix aprs so they can extract more money from the ones that can't PIF to avoid the higher and/ or jacked-up apr.  for now it is legal to apply payment to the lower apr balance so ideally you would PIF or BT the balance to a lower apr and then not make this type of misstep going forward.  the new CARD laws may help you avoid a recurrence as well.

[Anonymous]

Yes I did pay a BT. I am also paying Cap1 a $5/mo card fee. And I do not want to do a PIF because I am hoping to qualify for a home loan and I need as much $ as possible in savings.

I guess I am just a horribly naive and idealistic person. What is preventing these banks from raising interest rates to 100% or more? Not every one can simply PIF, and if you Opt Out it will cause a big hit on your credit score.

I am still going to write a letter to the bank, the Office of Comptroller, and FTC.

Punishing your customers for late payments or credit score changes is one thing - that is enumerated in the Terms and Agreements - but suddenly raising rates on exisiting balances to an arbitrary, capricious, usurous rate with no qualifying reason should not be legal. How is this any differnet from, say, a bank suddenly doubling someone's mortgage rate?

[creditwherecreditisdue]

Very sorry for your trouble OP! 

The correct place to file a complaint regarding a CC issuer is the Comptroller of Currency:

http://www.occ.treas.gov/

You can should send a copy of that letter to the Attorney General of your state.

Also, you can file a complaint with the BBB.

That is about all you can do. What the CC issuers do is (for the most part) legal, and this was completely legal. Are CC issuers fair, ethical, decent, caring, concerned, etc.? Not in any way. They never have been and most likely never will.

[creditwherecreditisdue]

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@Anonymous wrote:

What is preventing these banks from raising interest rates to 100% or more?

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Banks that issue credit cards are allowed to export the interest rate from the state where the card is issued. This is the result of a U.S. Supreme Court decision many years ago which is one of the cornerstone building blocks of the credit card industry. The usury laws of your state do not apply to your credit card.

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@Anonymous wrote:

How is this any differnet from, say, a bank suddenly doubling someone's mortgage rate?

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A mortgage is an installment term loan governed by a mortgage loan agreement (contract). A CC is a revolving credit agreement governed by credit card agreement. They are very different.

[Anonymous]

Thanks for providing the complaint filing link and advice.

It just feels like I got mugged by the bank's own security guard while making a deposit at the atm.

Now, anyone know how to start up your own bank?

[creditwherecreditisdue]

When a banker or politician says, "We only want to help you," keep your hand firmly grasped on your wallet. You know it's going to cost you plenty! Credit cards are a rather illusory form of credit. It is there but not on a fixed and immutable basis. The terms can be varied at any time and mostly for any reason. If you are ill prepared to deal with these changes when they are imposed the results can be a real pita.

Sorry again for your trouble!