topic Re: Capital One raised my interest rate simply because they can! in Credit Cards

Capital One raised my interest rate simply because they can!

Anonymous — Thu, 26 Feb 2009 04:58:01 GMT

How dare they!!!

A few hours ago I opened my mail and read that Capital One was raising my interest rate from a fixed rate of 9.9% for purchases and cash to a variable rate of prime plus 14.65% for purchases and even ridiculously higher rate for cash. My credit score is in the high 700's.

I have a zero balance and a credit limit limit of $8,300. I haven't used the card in a while but had a 0% transfer balance and paid it off two weeks ago. I was going to call them and give them a piece of mind, but I read articles online that states this is par for the course for this particular lender.

The article below was written on 2/25/2009 - today.
http://www.consumeraffairs.com/news04/2009/02/cap_one_revolt.html

The article below was written on 2/23/2009 - two days ago.
http://www.foxbusiness.com/story/personal-finance/credit-card-companies-raising-rates-consumers

The article below was written in 11/2008
http://www.usatoday.com/money/industries/banking/2008-11-09-bank-credit-card-interest-rates_N.htm

My first response, without thinking: "I'll show them". However the more rational response is to analyze how closing the account will affect my credit score. I can get a credit increase of $8,300 from one of my other creditors, which would balance out my percentages if I should close the account. Before I close the account, I have to re-calculate my average credit history length to make sure that this number is not greatly decreased.

I could also just leave the account open, not use the card and continue to let others know how unfair this company has treated me as well as others.

Re: Capital One raised my interest rate simply because they can!

Anonymous — Thu, 26 Feb 2009 05:41:00 GMT

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"

Message Edited by MojaveMoon on 02-25-2009 09:41 PM

Re: Capital One raised my interest rate simply because they can!

Anonymous — Fri, 27 Feb 2009 00:33:40 GMT

I also received my letter from Cap One letting me know that my APR was now 17.9%....amazingly only on the card that doesn't carry a balance, the other stayed at 9.5%.

This really isn't unusual for Cap One. A few years ago I was also included in one of their across the board rate jacks. My card went from 15% and 17% to 21.9% then. Since these are my oldest cards I chose to keep them and just pay in full each month. About 6 months after the change in terms I called their backdoor number and had them both reduced...11% and 12%. I'm hoping the same strategy works this time.

In defense of Cap One I have to say that at least they aren't reducing credit limits without warning like AMEX and some other "prime cards"

Message Edited by VEEnVEGAS on 02-26-2009 04:33 PM

Re: Capital One raised my interest rate simply because they can!

Anonymous — Fri, 27 Feb 2009 00:39:19 GMT

Okay....just picked up my mail....the card that was at 9.5% will now be 17.9% also. But, and this is strange, the new APR will not take affect until Feb. 2010....anyone else get that little note added?

In the same mail I received notice that the APR on my Target Visa will be going from 17.9% to 22.9%. Good thing I don't carry balances on any of these!

Re: Capital One raised my interest rate simply because they can!

Takunda1 — Fri, 27 Feb 2009 01:10:48 GMT

@Anonymous 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"
Message Edited by MojaveMoon on 02-25-2009 09:41 PM

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.

x

Anonymous — Wed, 01 May 2013 01:10:58 GMT

Capital One rate jacking may be the industry norm now, but...

Anonymous — Fri, 27 Feb 2009 14:30:39 GMT

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?

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.

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.

Re: Capital One raised my interest rate simply because they can!

CreditAble — Fri, 27 Feb 2009 19:06:54 GMT

@Takunda1 wrote:

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.

I may not be "most people" but, I absolutely agree with that statement.

After the new credit law goes into effect, the banks will not be able to raise the interest rate on existing outstanding balances. The interest rate on outstanding debt will go through the roof right before the law kicks in. Available credit with reasonable interest rates will cease to exist for people who revolve balances for long periods of time.

Re: Capital One rate jacking may be the industry norm now, but...

CreditAble — Fri, 27 Feb 2009 21:19:09 GMT

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.

Message Edited by CreditAble on 02-27-2009 04:19 PM

Re: Capital One rate jacking may be the industry norm now, but...

Anonymous — Fri, 27 Feb 2009 21:11:01 GMT

I've been expecting and finally received the same letter, a RJ to 17.9% variable and the unwholy 20-something percent for cash advances, I've never taken a cash advance on a CC and never will,

Good news though, I currently have a 5,900 0% for life BT that will not be affected by the RJ so CrapOne isn't all bad,

On another note, BofA denied my luv button CLI request telling me I have plenty of credit available to me based on my income, I was wanting to increase the BofA limit while I wait for HSBC to axe that card since I'll not be using it again,

AMEX and HSBC are devils,

The current econmic crisis won't last forever (I hope!!!) As you don't plan on using the C-1 card, keep it open, Closing it won't nessessarily hurt your credit scores, but it could limit your access to future 0% BT offers from C-1 since Credit Cards are CapOnes life,

I also received a 0% BT offer from C-1 last week, it was only good for 6-months, I'll pass on it,

Re: Capital One rate jacking may be the industry norm now, but...

Anonymous — Sat, 28 Feb 2009 03:06:07 GMT

Anyone else get the little added note that this increased interest rate won't take affect until after Jan. 2010?

Re: Capital One raised my interest rate simply because they can!

dallasjetfan — Sat, 28 Feb 2009 03:10:01 GMT

Yup, and now they will get the cancellation of my account!! I hope they fail too!!

Re: Capital One raised my interest rate simply because they can!

Anonymous — Sat, 28 Feb 2009 05:04:07 GMT

I got the same letter. Never really cared for capital one anyway. I always thought they were a company out to get the no credit or credit rebuilders who need credit but are willing to pay exorbitant fees and such to get it. I usually just wait for a zero percent for the life of the transfer check to come in the mail. Looks like those days are over.

On a side note, the banks that are getting our tax payers dollars should really feel fortunate and Citi I think is being subsidized as we speak. They should NEVER be allowed to deny a responsible cardholder anything due to the fact that they are using our money to get bailed out.

Re: Capital One rate jacking may be the industry norm now, but...

Anonymous — Sat, 28 Feb 2009 23:03:48 GMT

the only reason I keep they have grace periods on new balances trasnfers at your regular rate

my new cyle is th 2nd so I transfer the balances of cards I PIF and to make payments on ones I'm paying resulting in me having make on payment a month from my savings account

Re: Capital One rate jacking may be the industry norm now, but...

Too_much_debt — Mon, 02 Mar 2009 03:37:33 GMT

Just got my notice -- gone is my 4.27% rate, say hello to 13.9% starting in April. Guess I'll have to pay it off quicker now.

Re: Capital One raised my interest rate simply because they can!

slarano — Mon, 02 Mar 2009 09:40:52 GMT

this happened to me with BoA. needless to say, i'll be paying off that card ASAP and will only utilize it for debit-like purchases after it's paid off. meanwhile, i recently did a 0% APR for 6 mo. balance transfer offered on one of my Capital One cards. that helped me clear my balance on another rate hike card from Chase.

Re: Capital One rate jacking may be the industry norm now, but...

marty56 — Mon, 02 Mar 2009 10:20:38 GMT

@Too_much_debt wrote:
Just got my notice -- gone is my 4.27% rate, say hello to 13.9% starting in April. Guess I'll have to pay it off quicker now.

That is exactly why they are rasing interest rates so people will pay down their balances. 13.9% isnt that bad.

Once you get out of the revolving CC debt cycle you are immune from interest rates and even CLDs and your FICO scores will improve as well.

Re: Capital One rate jacking may be the industry norm now, but...

Anonymous — Tue, 17 Mar 2009 00:51:42 GMT

It makes me sad to see the comments from all the customers blindsided by this rate jack:
http://www.consumeraffairs.com/credit_cards/capital_one.htm

This person claims this is the answer for the rate jack:

"George of Nb NB (03/05/09)
I can only say a few things about C1s change in terms, because I work for them. First the reason for the change in terms is they are trying to get Rid of customers, that right get rid of them. The big focus is on the one that have large credit limits and a good credit history. Why you ask? Well in short they don't make much money off of them. I know that it really gets people mad that they are doing this and get get away with legaly but that leads to the second reason for the change in terms. In July 2010 they won't be able to pull these kind of stunts(or at least it will be harder to pull) because the law changes. So if you really want to stick it to C1 (I know I do) DON'T OPT OUT AND DON'T CLOSE YOUR ACCOUNT!

Pay it off and make one or two purchase's on the account a month and pay it off before the due date. I recommend a week or five days before so you don't get nailed by late fees and finance charges. This way here they are not as able to free up money to go and get more high risk accounts and make more money by screwing the average consumer. Many people are calling and asking that they get a lower APR or some kind of compromise, but the guy you are speaking with is not able to do a thing (they can't even agree with you, if they do it could be their job) but listen to you. If you do decide to close your account and I can't blame you don't close it! Use the opt out option, this way here when the change in terms take affect you won't be hit with it. Just one more hint When you speak with the phone agents they are on your side we just can't say that but treat them decent, they hear this alot recently.

C1 doesn't care but the emploee's do, they just can't do anything "

Re: Capital One rate jacking may be the industry norm now, but...

Anonymous — Tue, 17 Mar 2009 00:54:38 GMT

KrazyforKredit posted (link) an article which says that it's sorta possible to get your Capital One rate lowered.

http://www.msnbc.msn.com/id/29683349/

Re: Capital One rate jacking may be the industry norm now, but...

Anonymous — Tue, 17 Mar 2009 01:54:28 GMT

Called today and mine were lowered to 9 and 11%....Only good till Apri l 2010 I think she said.