How Cap One treats their sub-prime borrowers

[weezie]

Eh, I think being responsible with your subprime card means Capital One will treat you as well as it can for that category of card. Which is not very.

I had a rocky previous relationship with credit, made mistakes because I was putting myself through school. I didn't have or use credit cards for years. When I needed to get back into the game, I accepted the $300 Capital One card. At the time, I didn't know it was a subprime card and would always be a subprime card. When I first had credit cards, I don't think there was such a well-defined "subprime" category.

I've never made late payments to Capital One or any other CCC this time around. I don't exceed credit limits, I PIF, all that stuff. And since my FICO scores are now all comfortably above 700, I was expecting to start receiving Rolls Royce treatment from Capital One. Well, no. It's a subprime card and it comes along with a subprime experience. Fine, I get that now. I just wish they'd been more forthcoming about it being a garbage card at the time. I could've saved myself a lot of the time I've spent trying to get them to reward me in the same way that, e.g., Amex does.

So, thanks for posting this article. I think that Capital One really should have more of an obligation to be upfront about the type of relationship they plan to engage in with you based on the kind of card you have. (Wouldn't it save them a lot of phone calls?!) But if they're not gonna do it, I think it helps for subprime cardholders to get the word out. I mean, the letter they sent inviting me to apply for the card deliberately used the words "No Hassle" so I thought I was getting something like the card I saw advertised on TV. Nope. I know that now. And if you're thinking about applying for the subprime Platinum Visa, or whatever they're calling it nowadays, you should too.

(BTW, on this last go 'round, I had my interest rate lowered to 13.90%, my CL increased to $6000 and $50 of the $59 annual fee waived. I got the card in late 2003, never use it anymore, and the balance has been reporting as zero for about two straight years now. Just thought I'd share in case anyone else is in the same subprime boat and wondering what else they can squeeze out of Capital One.)

[Anonymous]

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@Anonymous wrote:

well Jaybee based on the info you mentioned to Sylvia I feel I have a legitimate reason to call them CRAPITAL 1--I have done nothing but worship my card since 2004 because they were first to offer me unsecured credit after BK--and its just plain and simple they really dont show me no love--but I am not losing no sleep or letting them still my joy about it--I just move on---the trade line is beneficial to me for age but my no means am I obligated to use it--so ....no sweat for me....I just mention my own scenarios when the topic is of discussion

It you do something wrong and dont get no love really you just gotta suckl it up--take it for what its worth accept your faults and try to do better next time----live and learn is the key

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I totally understand where you are coming from. Most people with their sub-prime card call them Crap 1. You may have done everything right but this is why they put people into categories like"sub-prime" and this is why we have scoring models to determine credit worthiness. Unfortunately, you are one that is doing it the right way (paying bills, not going over the limit etc.), but the good has to suffer with the bad, until you can get yourself out of the sub-prime category.

[Anonymous]

It is no surprise that Cap1 would treat their responsible borrowers well, with CLIs etc.

However as a lender it IS their responsibility to treat bad and/or new borrowers or uneducated ones strictly and NOT be predatory.

Offering someone who goes over their limit and has incurred late/overage fees MORE cards is nothing BUT predatory. They have identified someone who cannot manage their finances/credit and intentionally extend MORE credit (not higher credit-line) to encourage them to continue with bad habits, generate more overages and more late fees. Eventually this hurts everyone and of course could only happen in a monetary system not backed by gold (bu I digress).

One of the reason many of us develop bad credit habits is we never learned from anyone, not how to manage/balance finances, not how to manage debt, not how to keep utilization low, not how bad it is to pay 1 day late let alone 30, etc. The correct way to learn that in the real world would be to be turned down for credit, to have our cards suspended the first time we are late/over and to NOT have more offers. It is basicallly a mirror of the way money works when it is backed by gold (too much circulating debt less credit, more savings = more credit), but because money is worthless, creditors get to mimick the same sick system.

I in no way blame anyone but myself for the troubles I got myself into (well I could get pissed at my parents for not teaching me a thing but that would be pointless) but the CCs do indeed make a business out of that, and they do so because they don't lend any real money backed by anything.

If they are going to regulate the hell out of everything, why not regulate that? Lendors should not be able to offer credit to borrowers who are already over-extended and paying late/overage fees, that is quite obviously predatory.

Cap1 also plays allll sorts of other games; reporting before due dates, not reporting limits but rather high-balances which raiseus utilization and lowers scores and therefor raises rates so that users who borrowed at one rate are now paying back at another simply because Cap1 gamed the system.

[annah]

So here's a silly question, but what is it that makes the difference between sup-prime, and prime cards for cap 1?  I'm sure I don't have a prime card, but I don't seem to have the same issues as others with my card either..

I have a 1.5k limit and no af. My interest is at 19%, but I planned on making that my next call to their backdoor number. Do I have a transitional card or something?

[Anonymous]

So if they don't report credit line increases, how are you supposed to know exactly what they are reporting to the credit bureaus for your credit limit?? Sorry if this is a rediculous question but I'm new to this whole thing.

[Anonymous]

They report the highest balance you ever had on the card. So if you have a $10k limit and your highest balance was $1k they report the $1k. Now if your balance is say $800 on a given month, the FICO score is calculated based on 80% utilization (you are using 80% of your available credit on the card) which is bad and lowers your score. In fact your utilization is 8% which is excellent and which should raise your score. If this affects your score enough, your interest rate goes up and Cap1 is charging you more interest on credit you took out with them at lower interest, simply by virtue of gaming the credit-reporting process to artificially lower your score. They'll say it is because they don't want other card companies to have info on their limit policies, but it is part of their overall plan; rack up interest/fees on unsuspecting consumers.

[Anonymous]

Capital One has been reporting CL's starting Sept 10th 2007.

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nyccc2 wrote:
They report the highest balance you ever had on the card. So if you have a $10k limit and your highest balance was $1k they report the $1k. Now if your balance is say $800 on a given month, the FICO score is calculated based on 80% utilization (you are using 80% of your available credit on the card) which is bad and lowers your score. In fact your utilization is 8% which is excellent and which should raise your score. If this affects your score enough, your interest rate goes up and Cap1 is charging you more interest on credit you took out with them at lower interest, simply by virtue of gaming the credit-reporting process to artificially lower your score. They'll say it is because they don't want other card companies to have info on their limit policies, but it is part of their overall plan; rack up interest/fees on unsuspecting consumers.

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[Anonymous]

wow didnt know that never paid attention I guess

[Anonymous]

nyccc2, thanks for the quick reply. Sounds like I should use it to get my balance near its limit, wait for it to be reported and then pay it down quickly. This is the only logical way to take advantage of the way they report, otherwise they take advantage of me. Thanks again for the reply.

EDIT: Well, never mind. Just read the post above. Thanks again, guys.

Message Edited by jcrawford79 on 01-16-2008 06:17 AM

[Anonymous]

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@Anonymous wrote:

Capital One has been reporting CL's starting Sept 10th 2007.

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@Anonymous wrote:
They report the highest balance you ever had on the card. So if you have a $10k limit and your highest balance was $1k they report the $1k. Now if your balance is say $800 on a given month, the FICO score is calculated based on 80% utilization (you are using 80% of your available credit on the card) which is bad and lowers your score. In fact your utilization is 8% which is excellent and which should raise your score. If this affects your score enough, your interest rate goes up and Cap1 is charging you more interest on credit you took out with them at lower interest, simply by virtue of gaming the credit-reporting process to artificially lower your score. They'll say it is because they don't want other card companies to have info on their limit policies, but it is part of their overall plan; rack up interest/fees on unsuspecting consumers.

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Not on my reports they don't