Capital One customers face rate hike

[Joanne98]

Credit card provider dramatically increases the interest rate on outstanding balances because of the "economic environment".

Capital One has written to thousands of credit card customers warning that the interest rate on their existing debt is set to double.

The rate charged on outstanding balances will jump from 8.01 per cent to 15.31 per cent, the US card provider has revealed. The new rates will come into effect the day after customers receive their March statements.

The American lender blamed the poor “economic environment” for the decision, prompting fears that millions of credit card holders could be hit by a wave of interest rate hikes in the coming months as banks seek to boost revenue in the face of rising bad debts.

Continued>>>
http://www.timesonline.co.uk/tol/money/borrowing/article7019522.ece

[AndyA]

1. Way to go, Capital One

This is just the environment to put the screws to your customers (again).

I read that credit card usage is down 20 percent, and new credit card applications are down 46 percent. Does Capital One really think this is going to help? No, it will not.

And this is why we need regulations on interest rates put in place that prevent companies from doing this. Doubling the rate customers are charged will increase their monthly payments, and increase the amount of time it takes to pay off that debt. This will just encourage more people to file for bankruptcy.

This is exactly why the banking industry must be reformed. This will not help America recover, it will only make things worse. But Capital One can pay their executives multi-million dollar bonuses at the end of the year! :puke:

What's in your wallet? If it's Capital One, you'd best leave it in your wallet and pay cash.

[ixion]

2. Capital One is One of the Worst

IMO.

[hobbit709]

3. I'd be telling them to eat it.

Right now I owe about $600 on my Cap1 card. If they piss me off enough, I'll just say fuck you.
The house is paid for, I don't need anything that I need their credit card for and I've got VA medical coverage.
And in TX, there's not much they can do to you about unsecured debt.

[dixiegrrrrl]

4. Like shooting fish in a barrel...

and they can get away with it..that is what is so galling.

[Statistical]

5. I think this is mistaken.

The only good provision on the Credit Card Reform bill (which went into effect in Feb) is that rate hikes are only on new purchases.

So while rate may double any balances accumulated will be subject to the old rate.

[Statistical]

6. Here is some info:

http://en.wikipedia.org/wiki/Credit_CARD_Act_of_2009

* Requires card companies give cardholders 45 days notice of any interest rate increases.

* Gives cardholders the right to cancel their card and pay off their existing balance at the existing interest rate and repayment schedule if they get hit with an interest rate hike; gives cardholders 3 billing cycles after the rate increase to say no to these new terms.

* Prevents card companies from retroactively increasing interest rates on the existing balance of a cardholder in good standing for reasons unrelated to the cardholder's behavior with that card (the so-called "universal default" rate increase).

* Prohibits card companies from arbitrarily changing the terms of their contract with a cardholder, banning the so-called practice of "any-time, any-reason repricing."

So I am no lawyer but the way I read it.

If Cap1 is just raising rate on all accounts regardless of activity those who are making on time payments the hike will apply only to new purchases. Those getting rate hikes for a reason (missed payments, overlimit, etc) can cancel card and pay balance under only rate.

People need to know their rights.

[benld74]

7. We got informed Monday on this,,,

Wife went nuts
THey went to 24% on us
We will be shopping
Hell American Express is lower
Guess they will need to change their commercials

[Statistical]

8. Despite (and maybe because) of their commercials.

Cap1 has always been the worse. Higher fees, lower rewards, higher interest, lots of hype.

I think their business model is spam the consumer with ads, consumer doesn't shop around, cap1 collects more in interest/fees.