My credit card company finally got around to me (Capital One)

[PSPS]

I've been reading and hearing about people having their credit card terms unilaterally changed, but hadn't been affected myself until today's mail.

I've had a Capital One card for at least 15 years – back when it used to be Signet Bank. I'd never run over limit, paid late or anything undesirable. My most recent APR was 7.3%.

Today, I receive an "important notice" informing me that, unless I opt out, the new interest rate will be 13.9% APR. And while it would never apply to me because I'm never late with a payment, making a late payment twice in a year will switch the account to the new "default APR" of 29.4%.

My option is to "close" the account, meaning that no new charges are accepted and my existing terms and interest rate continue to apply to any existing balance until paid off. This is fine with me as I'm not dependent on credit cards for my income.

I looked at the current state of affairs with credit cards at http://www.bankrate.com/brm/rate/cc_home.asp and see that the best one can get these days is 8.74% APR (variable) with 0% teaser for the first 12 months with "Citi Platinum Select Card." The fine print says, "The standard variable APR for purchases is either 8.24% Rate 1, 12.24% Rate 2 or 16.24% Rate 3 in that order based on our review of your application and credit history, standard variable APR for cash advances 21.99%."

Oh, and by the way, Capital One has received over $3.5 billion in my taxpayer money through TARP.

[elocs]

1. Capital One just got me too, from 4.90% adding 10.something% to the prime. n/t

[roguevalley]

42. me too. I'm going to my credit union and applying for a card to wipe out mine

and make it 7% for as long as the debt is on the card.

[SmileyRose]

2. I'd keep it.

if you have no balance to carry over - A 13.9 fixed is better than an 8.74 variable, IMHO - especially if they aren't dropping your credit limit to screw up your FICO.


I fired Citi and Cap1. No balance was due, no late pays in over 20 years, my FICO is over 800. They both jacked my low fixed to a variable over 20% and chopped my limit to nearly nothing. -- They consider me a deadbeat because I pay in full each month and wanted me to fire them, I'm assuming.

[stevedeshazer]

3. They jacked up my rate, too

And that was several years ago. Made a payment a week late. Raised it from around 9% to 29%.

My local credit union gets all the business now.

Plus, their ads are really annoying.

[L0oniX]

4. Did it to me too. Went from 6.41 to 15.99% ...with a credit score of 758.

I called them and told them to eat it ...they said ALL the CC companies were going to do the same. I said "then I will cut them all up ...I don't need your credit card ...my home and cars are paid off".

[Dr.Phool]

12. Yeah, fuck them, their FICO scores and cards.

Chase nailed me this week. I've had a prime card, with a balance for 15 years. Never late. Always above minimum payment, and they raised my rate from prime+0 to prime +4.99%, damn near tripling my rate.

I'll call them next week, and chop it up, along with 2 other Chase cards I have with a zero balance.

I don't care about my FICO score, anyway, since everybody is going to get screwed anyway, when they cut card limits, which they're also doing now.

I plan on dying in this house, have two good cars, and about everything else I need to live without their damned cards, or FICO score.

[davidwparker]

5. Chase did that to me too. I had a high limit and used it. They thought I

had no place to go. What I did was borrow against my 401k, paid it off, and closed the account.

Showed them.

[sockpupppetsagogo]

6. Got a pair of scissors? Go to town.

Eff credit cards. All they do is seduce people into buying things they cannot afford right at this very moment. Remember layaway? Either go to a store and put money away each week, or SAVE until you get what you need.

[Bryn]

15. I wonder why Wal-Mart doesn't do layaway anymore?

They ended it over one year ago.

[PetrusMonsFormicarum]

7. An act of desperation

Annual percentage rates are rising in direct ratio to the staggering upswing in consumer defaults. These companies are trying to rake in as much cash as they can before the bright lights are turned on them and their predatory lending policies.

It was with great pleasure that I called and canceled all my credit cards (except the credit union one) just last year. It was quite hilarious to hear the company reps asking me why I was canceling, and then start throwing numbers around to entice me to stay. None of their numbers could beat my credit union card. One rep even brought his supervisor on the line to get me to stay.

If the Earth itself is a temple, where will the money lenders go when we throw them out?

[lebkuchen]

8. USAA is user friendly

I'm not sure what the credit card rate is, but, like you, I don't rely on the card and am never late for a payment. They haven't sent me any notification of new charges either.

You don't have to be a member of the military to join.

[TexasObserver]

9. Credit card companies are in big trouble, so they're desperate.

First, they want to stop digging the hole they're in, and that means cutting off any consumers who might be tempted to live off credit if employment revenues wane.

Second, they want to get maximum fees for handling the debt which cardholders continue to pay.

The fees are ridiculous, and do not have any bearing to the actual costs of late payments. The interest rates would have been considered Usury 30 odd years ago.

[gratuitous]

10. Can you join a credit union?

If so, you might look into what credit cards they offer.

[Sen. Walter Sobchak]

11. I got hit too - except by "universal default"

Some collection agency is of the opinion I owe AT&T money - this came as a suprise to AT&T who confirmed I owe nothing except "another opportunity to earn my business" but the collection agency reported it anyways.

I don't have the time, energy or motivation to fight it - but the very fact it is legal irritates me.

[wolfgangmo]

13. Fighting is pretty easy.

Write the collection agency and send with a signature required, tell them that you suspect that they may be a criminal enterprise, and that in light of that you are demanding that they produce proof of debt.

In most states they are required to produce the original documentation of the debt. If they can't or don't respond then send that info <3 copies of your original letter [sent at the same time to yourself in letters that you do not open - this establishes the mailing date if the letter is still sealed>] to the credit bureau's demanding that they correct your account.

Of course you can also send a letter to all 3 bureau's now demanding that they correct the mistake. This means that the collection department will have your paperwork to deal with but also the credit bureau's paperwork.

You can further put the boots to them by forwarding this entire mess to your states AG office as well as the AG office in the state the corporate headquarters of the collection bureau's are in.

I know it can be a pain, but if you make one letter and then send it to everyone, it makes it pretty easy. And then the collection fuckers can sweat for once because the same asshole who called you will have to hand fill in paperwork from everyone. Bwahahahahahaha.

[Sen. Walter Sobchak]

23. I went through most of that with the collector

I just didn't bother taking it up with the credit bureaus for lack of time, energy and motivation

[marybourg]

14. I pay in full every month, but am charging less on Cap 1

since they shortened the payment cycle from 30 days to 21 days a few months ago. I feel as if they're trying to get me to pay late. I now put most of my charges on Discover (why don't I see many people mention Discover Card here?). Discover still has a 30 day billing cycle. So Cap 1 is miffed and raised my theoretical (since I've paid in full every month since 1967) interest rate! Fine. Some small companies and medical offices don't take Discover, so I use my Cap 1 there and there only.

[Sherman A1]

46. I use Discover as well and

just like you game their system to build up the cash back bonus. That in turn is used for gift cards for nieces & nephews birthdays and christmas. I pump every expense I can through discover, such as auto insurance, mobile phone, internet & land line phone. Groceries, gasoline, etc. I am going to spend this money in any event, so I might as well use it to get something in return. Their Shop Discover feature came in handy to send flowers to a funeral last month which in turn worked towards my cash back amount.
There is no perfect plan but, I like this one thus far.

The key is of course to pay off the amount each month. :hi:

[Bryn]

16. Cap One got to me also recently and so did Citibank

I am going to opt out and let them close my credit card accounts. This is the only way I can survive rather than pay double monthly to them. I still have balances and have been trying to pay them off so when they raised interest rates it will only make it harder to pay them off. Extra money they want to take belongs to food and pet care (I have two dogs being trained to be my hearing/signal service dogs.) I no longer care about credit score. I think it's so silly for people to brag about their high credit scores. So what? What good is it in this present economy?

How did they get bailout money then turn around to raise interest rates? Why is this allowed by our government????

[RamboLiberal]

17. Got a funny one from Citicard today

A bit over a month ago they ratejacked me from 7.99 to 14.99%. At the same time they raised my credit limit - go figure. So I said F* you and paid it mostly off except for a couple of hundred dollars. Today I get a letter telling that since I'm such a great customer they are offering me for the next 6 months a 5.99% rate on purchases. Gee Citi - do you miss me or something. Sorry Citi but your f'ing card is in the drawer now!

[dflprincess]

34. I have 2 Citi cards

thankfully, I will have one paid off next month and the other done before the year is out. They raised my rate to 14.99% as well. I called to complain and had to listen to a record spiel about getting 0% interest if I transferred balances from high rate cards to Citi. I told the person I finally spoke to that I wanted that 0% - but they were not amused when they found out I was talking about my Citibank balance. Anyway, after going through a couple layers of people I did get the rate move back to 10.65%. The intereting thing is, I have a US Bank card; last month the interest rate on that was 7 something. This month it was 6.6%.

[SOS]

The discount rate is currently 0.50%

Crapital One can borrow from the Fed at a half a percent and they abuse their customers with 22% and 29%? (Illegal loan shark rates by most state law)

This seems stupid, even for an American bank.
Their customers with access to capital will disagree with the new terms and leave.
The poorer ones will be hammered with these rates and be forced into default.

Drive away solvent customers and shaft the poor ones into bankruptcy.
This is a business model?

[Raksha]

38. It sure looks that way! Check out my post about Target below.

Re This seems stupid, even for an American bank.
Their customers with access to capital will disagree with the new terms and leave.
The poorer ones will be hammered with these rates and be forced into default.

Drive away solvent customers and shaft the poor ones into bankruptcy.
This is a business model?

I have had that Target card for less than a year, and at the time I got it they were more than happy to get my business. I told them I only planned to use the card for emergencies. All they did was verify online that I received Social Security and they issued me the card...with a measly $200 credit limit, however. I guess they knew right away I was one of those poorer customers who would end up paying them at least something in late charges.

Now with their out-of-the-blue $39.00 late charge and $3.30 finance charge (up from $8.74) they have brought me very close to my $200 credit limit. Are they trying to MAKE me default or what?

[BR_Parkway]

44. Pull out all the cash, then let the FDIC or some other Fed agency take

over. The new biz model is all about propping up the books and skimming off the top till the golden parachutes kick in.

And yeah, they really do think too many of their customers can't live without the plastic - maybe they're right.

[TK421]

18. I got the letter on Thursday....my APR was 14%

the motherfuckers jacked it up to 29%. I called to complain...but to no avail. I cancelled it and opted out of the change, so I'm just going to pay it off at the agreed upon APR.

I fucking HATE Crapital One

[Bryn]

19. This makes no sense

Is Capital One stupid? They jacked up mine from 12% to 22.9%. That's close to double. Are they expecting to lose us all like that? I have decided to just opt out and let them close my account rather than take their interest rate. It won't be easy not to have a credit card to fall on in case of emergency. I don't have a choice. :( I got both Capital One and CitiBank cards. Citibank is doing the same as Cap One.

[TK421]

20. When I called them, the rep I talked to said " They sent this same letter out to

about 30 million other people ( or some ridiculous number like that ) she was apologetic, very nice and also claimed that she was in the same position I am in with her card there! ( WHAT? employees are getting fucked by them too? ). She is a cardholder, apparently...

These bastards need to be dealt with HARSHLY....

[Kansas Wyatt]

21. So what are they going to do when everyone closes their account?

If I understand this right, you have the option of closing your account and paying it off under the lower interest rate. It would be nice to know how many of their customers already closed their account.

[TK421]

26. Honestly...I don't know. What I have been told, however is that if you close

your account ( even under these bullshit terms ) it will have a negative effect on your credit score.

FUCKING BULLSHIT!!!!

[Bryn]

29. This is exactly what they expect and why ....

they are doing this to everyone. Most DUers here I see are soooooooo worried about credit score.

Let it go. This is like blackmail. Don't let them do this. I for one am not going to worry about my credit score. Survival is important than worrying about credit score. I am going to practice saving money for emergency since I won't have credit cards to fall on in case of emergency even if it's $5.00 per week.

[Bryn]

28. I hope many people will wise up and close their account

and pay off under lower interest rate. Then we see what happens. Seems like most DUers here don't want to do this in order to keep their "credit score high". Perhaps this is what they (credit card companies) figure. We shouldn't worry too much about credit score..let it go. Fire them.

[Kansas Wyatt]

30. I think there is a fear campaign with regards to "credit score"

I think it is much more likely that credit card companies will find another way to screw with credit scores, regardless of closing an account. Besides, what good is credit if one cannot get it anyway and other creditors view someone as willing to pay loan shark rates? Besides, doesn't it look better to more sound smaller banks, if someone doesn't have a bunch of credit cards with high rates?

If you can pay it off under the original terms, piss on them.

[Stephanie]

31. Here's the best explanation I've seen, from an old thread

They don't care if you can't pay it. That's beside the point.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=5016439#5016865

Robbien (1000+ posts)  
Mon Feb-09-09 04:04 PM
Response to Reply #24
38. Because they get to book higher profits


whether you pay them or not. Bonuses are based on recording profits not collecting them.

If you go into default and they get to charge you even more fees. More recorded profits.

A win win for them.

[Bryn]

32. Thanks. I missed this thread

"a win win for them." I highly doubt it, but we will see.

[1]

35. my guess would be that people all over the place have just stopped paying on their credit cards...

the only way these fucks can make any money is by screwing with those that still do pay.

definitely the cancel and payoff route was the best thing for you. if you had not opted out, they would have reduced your credit limit to $10 over what you currently owe and then charge you the 29% anyway.

you did the right thing...

[Scout]

22. I have a phone message from American Express

about "changes in terms of my agreement" for my Blue card.

i originally transferred a balance from another card to this one for 3.9% ... i forget when the raised it (i believe i was late with a payment) ... haven't been late, nor used the card, in a looooooong time.

i guess i better return the message....

[DCKit]

24. Look again. I'd be willing to bet it's "prime + 13.9%".

Knowing that they're basically getting the money they lend U.S. for free.....

[flvegan]

25. Not prime, but LIBOR.

[pinniped]

27. Crapital One - 7.90% to 17.90%. F them, goodbye.

..

[mockmonkey]

43. mine too

f' em indeed

[eridani]

33. Get a credit union credit card an then close the old one. n/t

[Raksha]

36. Target did that to me yesterday.

I was absolutely shocked...not to mention disgusted. Unlike you, I do depend on my credit card to tide me over until I get my Social Security check, and I do have a balance. I have what I call a "deadbeat's credit card," meaning I have only a $200 credit limit. That's okay with me, I mostly use it for food at the end of the month.

The regular payment on such a small balance is $10.00. In the past when I've been late (and this has happened twice), they added a late charge of about $8.74, which almost doubled the payment. That was bad enough, but I can't deny that I WAS late making my payment.

This month when I opened my bill, I was totally shocked to see a "minimum payment due" of $54.30. WTF???

Out of the blue, Target had added a $39.00 late fee AND a finance charge of $3.30. Here's the explanation they gave: "Like many credit card issuers in this challenging environment, we are modifying some of the terms of our agreement."

I haven't had a chance to read the fine print yet, but they are no better than the payday advance place that charge $15 interest on a $100 two-week loan. How the hell are you EVER supposed to get out from under with this kind of crap going on?

[shanti]

37. join the crowd n/t

[Harry Monroe]

39. Capital One was the lowest interest rate card in my wallet

Now they raised mine to 9.99%. It's now the highest. What's in my wallet now? Certainly not Capital One! I took it out today and replaced it with Discover.

[LaPera]

40. ONLY answer is to get rid of your credit cards, a motherfucker...

I know, but use a debit card (only what you have & make, if that's it...that's it)...No interest (instead of just throwing away money to the banks)...Again, I know it's hard....but instead stay home, consume less, fuck the egos....

By using credit cards because it's truly become a matter of survival, understandable, I suppose, but your already going down by giving the banks the fucking juice. (Their main profits of course is the juice, like all criminal loan sharking).

Bankruptcy, for workers these days is just giving up most of what you worked for, you don't need half of what you already bought on time...Stop, if you possibly can from using their cards.

But we all know this...still, it is truly difficult for many?

Stop, or at the very least, cut down....It's really not that hard!!

Foresight: It's going to get much tougher, thank you slimy republicans, (be ready all & tone it down) what do we really need, what's really our true priorities?

Certainly not giving more juice to the banks who have already robbed us blind by stealing our taxes.

[ecstatic]

41. They're just digging their own graves

They sh!t on their "base" so to speak due to the actions of some. Like many others, I just went ahead and shut them down when they came to me with that--and I suspect many others will do the same. Let's see how their strategy works out.

[Why Syzygy]

45. Can they do that with car loans?

My balance has not been going down. I just rec'd a transaction summary, which I haven't read yet.
But, if they can, and did, that would explain it.

[AnotherDreamWeaver]

47. I have a Working Assets card, 4.9%

But it was bought by Bank of America. (They were my first credit card, while in college. I went over the limit while overseas and then had trouble paying it off 30 some years ago, but finally did.) I just use Working Assets for internet connection bill and pay it every month. My mom talked me into getting the Costco American Express, because she got money back on all purchases, even Gas. When my partner last went to town he was surprized there were no lines at the costco gas pumps, then found they no longer were taking ATM cards. What the Fuck??? I haven't had the American Express card for a year yet, but so far they say I will be getting $33 dollars back on gas, (5%). I have had good credit for years, even though I have not been full time employed.

Good luck folks, ADW