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03/02/2009 10:59:36 AM · #1 |
I don't know what's up at Capitol One but they've just cut their own throats I think. I got this 'change of terms' in the mail today that changes my interest rate from 7.9 to 17.9! WTF?
I call them up and there's all sorts of automated messages related to this change ot terms, the letter didn't have my account number on it and it had a special phone number...apparently this is a company wide thing then?
I get a person on the phone and she has no info...goes away and comes back and says she "I see you've been with us since 1998 and never had a late payment, your account has always been in good standing. I can extend the 7.9 for 10 months, but then you'll get another letter like you got today" ...
Excuse me? I've been with them for over 10 years, use their card for some business stuff and this is how they "reward" me? I don't think so.
I don't have a single card over 9.9 and today got 3 solicitaions for more cards and 'checks' from two of my other cards offering low interest cash advances. That tells me these other companies have money to lend and Cap One doesn't...I guess is the bailout coming home to roost!
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03/02/2009 11:06:56 AM · #2 |
Wow, that's an insane jump. They must realize that everyone will pay off their balance and turf out the card all together. Sounds like they are out of money. :-O
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03/02/2009 11:12:03 AM · #3 |
| I'm afraid Capital One spent all their money opening new branches on every other freakin' streetcorner in Manhattan. |
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03/02/2009 11:15:02 AM · #4 |
| LOL ... I got the same letter last week from Capital One ... went from 9.9% to .... 19.9% ... I have been with them for about 7 years and never had late payments ... I haven't used the card in about a year and a half and had no plans to use it because I got another card with 7.9% fixed ... so I called and closed the account ... of course they tried to talk me into keeping it and I just laughed ... I have no interest in doing business with a company like that ... I think that they're counting on folks not reading that letter and using the card anyway, or counting on the folks that are in a pinch and have to use it to pay bills/buy groceries, etc ... |
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03/02/2009 11:23:59 AM · #5 |
| Wow, I wonder if that is on new purchases or if someone has an existing balance if it affects them. That sucks. I dont know what my rate is with them but I dont use my credit card if I cant afford to pay it off the next month. |
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03/02/2009 11:27:05 AM · #6 |
| I believe that I read that it was on new purchases and the existing balances would stay at the same rate you previously had ... I didn't carry a balance so I didn't pay much attention ... just couldn't call fast enough to close the account! |
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03/02/2009 11:30:12 AM · #7 |
| The credit card companies have fine print that pretty much allows them to bump up your interest rate for any reason. The trend the last few years was to use any shallow excuse such as learning that you paid your electric bill a day late last month (Makes you a bigger risk, supposedly). It appears they are now foregoing even the illusion of having a good reason. Glad I paid off all my cards and killed the accounts 3 years ago. |
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03/02/2009 11:43:45 AM · #8 |
but you need a credit card for emergencies. Even if you pay if off the next month. I really don't like using my debit visa card for online purchases, hotel reservations, etc as it's my cash they have access too. Sure, a fraudulent charge can be fought but that won't help my buy food for pay the mortgage. At least if it's on a true credit card I can pay a minumum till the battle is over.
I have one card I use for business and one for personal stuff - my wife it going to texas to visit a friend at the end of the month and one needs a credit card to get a plane ticket, hotel reservation, rental car, etc. I'd rather have these 'unknown' charges on my discover than coming from my checking account and find out too late i'm overdrawn.
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03/02/2009 11:53:56 AM · #9 |
| agreed ... I travel frequently for business and pleasure ... can't do that without a credit card! |
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03/02/2009 11:54:20 AM · #10 |
edit ... double post
Message edited by author 2009-03-02 11:54:46. |
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03/02/2009 11:55:12 AM · #11 |
del
Message edited by author 2009-03-02 11:55:57. |
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03/02/2009 01:07:41 PM · #12 |
| Yup, we got the same letter, same response. We're going to use the cards for our trip to Europe this month, since Cap One doesn't charge a conversion fee for foreign exchange. But then they are getting paid off, canceled and cut up. Cya. |
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03/02/2009 05:32:03 PM · #13 |
I have a Capital One mastercard, but it's secured, and based in Canada, and I haven't received any notice about an increase in interest, thankfully.
Of course, my interest is already sky high. lol. |
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03/02/2009 05:34:38 PM · #14 |
Originally posted by pamelasue:
agreed ... I travel frequently for business and pleasure ... can't do that without a credit card! |
You CAN, it's just a lot more difficult. Taking cabs/etc. instead of renting vehicles. Getting traveler's cheques, etc.
Pain in the royal behind, but it can be done. |
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03/02/2009 07:25:18 PM · #15 |
| Anybody else familiar with Dave Ramsey? Listening to him is what convinced me to not do credit anymore. Still not totally on track, but way more stable without those debt payments. |
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03/02/2009 07:54:49 PM · #16 |
| We've listened to and read a lot of the Dave Ramsey stuff. If you can do it, it will definitely get you on a debt free track! |
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03/02/2009 09:02:17 PM · #17 |
There's nothing wrong with debt. Buy a house without it - I dare you! LOL
It's possible to buy a car that way, and quite smart IF you have the willpower. Save up the $400/month a payment would be and then buy it cash - takes less time that paying it off afterwards and you get to earn the interest rather than pay it.
I guess you could get a college education without going into debt, but I bet very few do it.
My debt is from two places - a previous career (real estate sales) that is essentially self employement and the income is very up and down, and paying off a furnace. The cheapest way to get a furnace was on the credit card - used one of the promo deals to pay for it - 3.9% till it's paid off. My heating bills went down $70 a month, so they're getting $70/month. Costs me nothing extra for the 4 years it's taken to pay it off and then I'm ahead.
I have some home equity debt- house needed a roof and car needed a transmission. I don't know about most of you out there, but I didn't have $7,000 sitting in savings to cover those two things. Neither was a planned expense so there was no saving up for them.
The key is to never ever put food/gas/living expenses on your credit cards!
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03/02/2009 09:57:43 PM · #18 |
the problem is, they are raising the rates in HOPES that you'll pay it off. The default rates are so high these days, they are just trying to stabilize. I have an AMEX card where they offered me $300 to pay it off and close it. I've never missed a payment in my life! Banks need to free up credit, simple as that.
Welcome to the new reality! |
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03/02/2009 10:02:57 PM · #19 |
Originally posted by K10DGuy:
I have a Capital One mastercard, but it's secured, and based in Canada, and I haven't received any notice about an increase in interest, thankfully.
Of course, my interest is already sky high. lol. |
Ditto, but it actually went down a percent or so last month. It's nearly 2%less than when we got it. Then again, we never carry a balance from one month to the next.
Message edited by author 2009-03-02 22:03:39. |
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03/03/2009 05:46:38 PM · #20 |
| Anybody who has relied/depended on cheap and easy credit is in for a new reality. It's as simple as that. |
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03/04/2009 04:04:39 AM · #21 |
My wife has a card through Pay pal. She had ONE late payment, late by 2 days because we were on vacation and she couldn't get to a computer. That was her only late payment in over 10 years. They not only charged her a late fee but jacked the interest up over 10% more.
We called, complained, told basically tuff shit you should have read the fine print. Called back and asked to speak to a supervisor. She said she could do nothing for us, I finally got on the phone, pretty hot at this time. I told her to please put someone on the phone who could. Well, after a long talk and them checking her records to see if we were telling the truth, we finally got them to drop the interest rate back down and refund the additional money she had to pay because of the interest jack. The squeaky wheel definately got the oil.
BTW, I remember hearing that congress passed a law about credit card companies jacking the rates up. Not sure what it read though. Could have been that they must provide you warning. Might want to check on that. |
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03/04/2009 06:47:07 AM · #22 |
Originally posted by DrAchoo:
Anybody who has relied/depended on cheap and easy credit is in for a new reality. It's as simple as that. |
Don't know about things in the USA, but in Canada, the Bank of Canada has reduced the interest rates it charges to banks several times this year and it now stands at less than 5%. Sadly, the banks have not passed all of these cuts to the consumer and are raking in unbelievable profits.
Just another example of how the big corporate entities are milking the average Joe.
Ray |
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03/04/2009 08:07:52 AM · #23 |
Originally posted by Prof_Fate:
The key is to never ever put food/gas/living expenses on your credit cards! |
I put EVERYTHING on my credit card ... groceries, gas etc ... I pay off the balance every month and earn airline miles for all of my purchases ... I travel frequently for my job and those miles really add up quickly ... we booked 2 r/t tix to Italy for this fall and paid for them completely with airline miles! |
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03/04/2009 12:35:34 PM · #24 |
Originally posted by RayEthier:
... raking in unbelievable profits. |
You are going to have to show me some of these balance sheets as financials these days are among the last companies to tally "unbelievable profits". That's not to say they don't make money on their credit cards though. But let me ask the philosophical question, why do we think we have the right to unsecured, cheap credit? If people don't want to pay 19% interest, don't use your credit card or pay your balance off each month. Bam. Problem solved. There are few scenarios, in my mind, where one is truly forced to use credit card debt. But rather than reign in our standard of living we are all too willing to incur this deal with the devil. |
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03/04/2009 11:05:23 PM · #25 |
Originally posted by DrAchoo:
Originally posted by RayEthier:
... raking in unbelievable profits. |
You are going to have to show me some of these balance sheets as financials these days are among the last companies to tally "unbelievable profits". That's not to say they don't make money on their credit cards though. But let me ask the philosophical question, why do we think we have the right to unsecured, cheap credit? If people don't want to pay 19% interest, don't use your credit card or pay your balance off each month. Bam. Problem solved. There are few scenarios, in my mind, where one is truly forced to use credit card debt. But rather than reign in our standard of living we are all too willing to incur this deal with the devil. |
While I can appreciate your concerns Doc, the issue of prime consideration in this instance rests in the fact that these financial institutions do not pass on the reductions of the prime rates to the clients, and that is something that affects a lot more than credit cards.
Every single loan doled out in this country is affected by the Prime Rate charged by the Bank of Canada, and it is almost obscene that banks can pocket the difference in the interest charged by the Bank of Canada. I most certainly do not have a problem with financial institutions making a fair profit, but the rates charged in some instances is nothing short of what used to be viewed as "Usury". Couple this with all the nickel and dime charges the banks have and I have no doubt they are not suffering much.
You might wish to take a quick look at this article Canada's Bankswhich seems to suggest that although their profit margins have indeed dwindled somewhat, they are still doing quite well.
Ray |
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