Is this allowed/ legal?

[redhed1026]

Capital One charged me an annual fee recently. I called them, explained I would not pay an AF, and asked if they would waive it. They said no, so I asked for the account to be closed. (They will credit the AF back if you close your account.) They stated the account would be closed and I did then notice the fee was credited back.

Fast forward to about 4 months later and I notice the AF pops up again. So, I called, only to be told that they require the account to be paid off within 3 months or they will reassess the fee.

I think that's crap! #1- I wasn't told (when I first called to close it) it had to be paid off in 3 months or they would reassess the fee and #2- Who keeps a closed account "open" until it's paid off?

Unfortunately, I'm in grad school, so can't pay this off right away, but they are getting extra from me each month to pay it faster.

Is this allowed? I was under the assumption that if you ask for an account to be closed, it's done right away and you continue to pay under the original terms until it's paid off. Thanks for any help!

[kittygal]

I'm not 100% sure on this, but I believe the CC is assessing the annual fee based on the fact that as long as a balance is reporting the account is "open" to them but "closed" for any further charges to you.   The balance reporting is also figured into your utilization versus credit available until the balance is zero.

Unfortunately, I don't believe the current CARD act addresses this issue.  There are issues related to some fees (ie late payment etc) that go into effect August 2010, but not sure if it specifically addresses annual fees.

It's a bummer!  The CARD act has helped the consumer in some ways, but the CC companies seem to be making up for any lost revenue through creative assessment of fees.  Depending on how long you have had the account in good standing, you might want to keep trying and see if they change their minds.  Otherwise, pay it off as soon as possible and rely on other more favorable CC for your credit needs.  There are still a lot of cards not yet imposing annual fees.

[redhed1026]

Thanks Kitty for the reply!

I had three open cards with Capital One, and only one had a balance. I played hardball with them and closed the other two, and it didn't seem to phase them in the least bit, even though I've been a long time customer (10+ years).

I also find it strange that the card isn't "closed" to any new charges- it's still showing my available credit and I can use it to make purchases according to them (not that I will!) There's a note on my statement- "your account is scheduled to close... it will reflect as closed within 30 days after the balance is paid"- something to that effect. Ugh- a headache!

[ncks]

Capital One has always done that.  If your account has a balance you must pay it and reach a 0 balance and it will close 30 days after you reach the 0 balance.  Also if you use it before they close the account then it will remain open.

[hawkeye33]

Seems the crappiest thing about this one is that they didn't make you aware up front that you were required to pay it off within 3 months. Did you, by any chance, receive anything in the mail, either separate or verbiage on your statement, that had this info that you might have ignored or overlooked?

From their perspective, any balance means that they have to continue to consume resources (human, materials, etc.) in order to manage your account, so to some degree, it makes sense that they would assess the fee if there is still a balance. Now, whether the AF is excessive given the resources needed to manage your account for one year is an entirely different argument.

Hopefully, you can get it paid off without too much additional pain. Good luck.

[Itsmeagain]

I would be interested to see if this is contained in the cardmember agreement.