Capital One cc rate jump

[Think of Winter]

We have very good credit, and we just got a letter notifying us that our rate is jumping 10%. I called to make sure nothing we had done was affecting the rate increase. The agent I spoke with said no, and that we're lucky that we have more than a year before the hike. Some will go up this May. I'll check my credit reports just to be sure, but she said it was pretty much across the board. She even quoted me the figure that they wrote off last year in bad credit.

Just a warning to anyone who might be running a balance with Capital One.

[twin_mama]

Originally Posted by Think of Winter

We have very good credit, and we just got a letter notifying us that our rate is jumping 10%. I called to make sure nothing we had done was affecting the rate increase. The agent I spoke with said no, and that we're lucky that we have more than a year before the hike. Some will go up this May. I'll check my credit reports just to be sure, but she said it was pretty much across the board. She even quoted me the figure that they wrote off last year in bad credit.

Just a warning to anyone who might be running a balance with Capital One.

Ugh...our one year at 0% ends this month. I knew it was going to jump up to our normal rate (6.4%) but it's good to know in advance they could be upping it even more.

Thanks for the heads up.

[ChristyMarie]

I have an account with them too - I don't think I've ever carried a balance yet my rate is going to skyrocket. I believe I'm going to close the account.

[krankedyann]

You should have the option to opt out of the rate increase and close the account. The good news is that the rate increase wouldn't affect you. The bad news (if you view it as bad) is that you could no longer use that credit card.

[Think of Winter]

Originally Posted by krankedyann

You should have the option to opt out of the rate increase and close the account. The good news is that the rate increase wouldn't affect you. The bad news (if you view it as bad) is that you could no longer use that credit card.

This is the text from the letter, almost verbatim, as far as "you have the option to opt out." Well, of course we could close the account. Can't anyone close a cc account at any time if they don't carry a balance? I think calling this "opting out" is misleading.

Canceling a cc account for which we have more than $20,000 in available credit would not be good for our credit rating, would it? I'd hate to cancel one card only to trigger a rate increase on the other.

We only have a couple of credit cards, so I don't want to cancel an account hastily. I suspect that rates will be going up everywhere as cc companies scramble to make a profit while customers are defaulting on loans.

[Denvergirlie]

My rate increased as well, but since I don't carry a balance it really doesn't affect me.

If you carry a balance, opting out and having the account closed might be the best bet, however, it will decrease your debt ratio which can lower your score.

But if you don't carry a balance then what difference does it really make? In mine none as when I do use it I pay it off in a few days.

[annethcz]

The same thing happened to us last month. It's the card we've had for the longest, and it has the highest credit limit. The rate is going to go up from 8.99% to 18.99%. We have excellent credit, and nothing has changed regarding our creditworthiness.

We don't carry a balance on the card, so I guess it doesn't really matter that the rate is skyrocketing. But it's annoying nonetheless. I'm also considering this a good incentive to really do better at adding to our savings account, because I don't want to have to rely on a high-interest credit card in case of an emergency.

It's my understanding that many CC companies are raising rates now because in 2009 a law will go into effect limiting CC rate increases.

[Thystle]

Yep.



And if you are late the % goes to almost 30%.



Ouchie.

[krankedyann]

Originally Posted by Think of Winter

Can't anyone close a cc account at any time if they don't carry a balance? I think calling this "opting out" is misleading.

You can close the account even if you have a balance. You continue to pay the card on your original terms, and you can not charge any more to the account.

It can affect your credit score, yes, but you have to weigh that against the other factors. We closed our account.