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MSE News: Capital One in 'rate jacking' move
Former_MSE_Guy
Posts: 1,650 Forumite
in Credit cards
This is the discussion thread for the following MSE News Story:
"The card giant will almost double some borrowers' rates which can adds hundreds to annual costs ..."
"The card giant will almost double some borrowers' rates which can adds hundreds to annual costs ..."
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Comments
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Bah.. MBNA beat Capital one to it by at least an year. 34.9% from 15.9% after the end of the 0% offer.0
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Capital One recently jacked my rate by 15%. However, I recently came accross this on the website of the FOS (from their yearly review 2008/09):
"In last year's annual review we mentioned an emerging type of complaint, where credit-card companies made substantial increases – sometimes by as much as ten percentage points – in the rate of interest charged on certain customers' credit-card accounts. The companies said that this reflected a move to "risk-based pricing". We have continued to receive complaints of this type this year, and it seemed to us that the issue was one that had wider significance both for consumers and for credit-card companies.
We therefore raised the matter under the formal "wider-implications" procedure that we share with the Office of Fair Trading (OFT – the body that regulates consumer credit) and the Financial Services Authority (FSA). Having considered the matter, the OFT decided that it would not at this time pursue a regulatory solution to the issue. This meant we were able to continue our own investigations into the individual complaints that consumers had referred to us about rate changes already made. Separately, the government agreed a set of principles with credit-card companies about future rate changes. These principles took effect from 1 January 2009.
As part of our investigation into these complaints, we issued questionnaires to the credit-card companies involved, to obtain information about – among other things – the actual assessments of risk that had been carried out in relation to these customers, and how the new rates had been calculated. Almost all the credit-card companies subsequently chose to settle the complaints that had been brought against them, rather than have our investigation continue."
So I have adapted Martin's rate jacking letter and I await to see what happens... Give it a try, you don't ask you don't get...0 -
My APR was 17.9 for years, then about six months ago they upped it to 26%. Now I just got a letter from them to say it is going up to nearly 40%!!!
I have other cards, a couple of which I have just paid thousands off and cleared, and all of my payments are up to date. I haven't missed any payments for years. I've checked my credit files and they are clean, on electoral role over ten years, and a Barcs Gold card with no missed or late payments in over 17 years and very low APR.
I've also closed lines of credit lately too.
Capital One are just trying it on with those they hope won't close their accounts and won't be able to pay it off. My card will be cleared within the month and account closed.
All they are going to be left with are people who struggle to pay, as the better off customers will simply go elsewhere for a better deal.
Cap 1 is going bust.
D.Doh!0 -
These banks don't have any money.
They need to get some soon and the only way to get it is off their customers who use their very handy services.
Nothing wrong with that as long as it's legal and clear.0 -
"The economic environment has changed dramatically and we must adjust rates to account appropriately for the increased risk of lending to consumers in an economic downturn"
I don't blame them for increasing rates if they are losing money because of people defaulting and becoming insolvent its perfectly rational. Except of course that it in turn could push more people towards insolvency.
Bit of a catch 22 that.Mixed Martial Arts is the greatest sport known to mankind and anyone who says it is 'a bar room brawl' has never trained in it and has no idea what they are talking about.0 -
Just had my capital one rate upped from 10.4% to 17.4%.
In the past I've had balances that I've not paid of immediately but have always paid more than the minimum payment each month. Over the last few months I've been clearing the balance in full each month, so have no idea why CapOne felt the need to increase my interest rate, since they are not making any money from me anyway.
I've got a good credit rating, home owner, good salary, etc. Perhaps this type of customer isn't what Cap One want.0 -
dorad wrote:Perhaps this type of customer isn't what Cap One want.
You are or have been spending money you don't have and whomever OKayed those funds wants it back.
We know the UK tax payer is picking up the bills for most banks but Capital One looks really dodgy to me as a 'bank' so gawd knows who owns their debts.
If people don't like it don't use them and get your own moeny.0 -
Can my ex partner close her capital one account even though she owes money still?
She would love to close it as she does not intend spending on it again. And if that would prevent the rate rise that would be great.
Will she be able to close it and still carry on paying off the current debt at the current rate?
Thanks Jsomething missing0 -
She can't close the account until the balance is zero and that there is no trailling interest - so what she can do is request the account to be into 'paying in status' account - which means you can't use the card and yes if she recently been informed of the APR % then she can request to remain on the same APR rate.Can my ex partner close her capital one account even though she owes money still?
She would love to close it as she does not intend spending on it again. And if that would prevent the rate rise that would be great.
Will she be able to close it and still carry on paying off the current debt at the current rate?
Thanks J0 -
noah271007 wrote: »She can't close the account until the balance is zero and that there is no trailling interest - so what she can do is request the account to be into 'paying in status' account - which means you can't use the card and yes if she recently been informed of the APR % then she can request to remain on the same APR rate.
To be completely honest with you she's been in so much !!!! financially that she's been putting letters from capital one straight in the bin so has no idea whether she's had a letter informing her of the rate being jacked or not.
Wrong i know, and she knows too but the last thing she needs is a rate jack now she's starting to get a repaymnet plan put together.
Jsomething missing0
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