Has Capital One increased the interest rate of your Credit Card? Please let us know

O_Miserly_one

I have not received a letter specifically telling me about a rate change. I have received a replacement card though, as my old one expired. I don't have anything on the card right now (it's a cashback card I've had since 2003) and I pay any balance each month.

My last statement (October 09) says the annual interest rates are:
Standard Purchase Interest 11.880%
Standard Cash Withdrawal Interest 11.280%

The (very tiny print) conditions on the back of the letter that me new card was attached to say:
Standard Purchase Rate an effective rate of 12.55% p.a.
Standard Cash Withdrawals 11.880%

When I asked Capital One, they told me that the rate shown on my statement is the "simple" interest rate. The rate on the letter is the "compound" interest rate but actually, they are both the same so my rates have not changed. Eh?

I know these rates are low compared to the rates some of you have been given, so please don't think I'm complaining. I just want to know if I'm missing something and Capital One are correct. Also, has anyone else found out that their rates have changed in this way?

Hopefully one of you savvy people will put me right! Thanks.

callum9999

david39 wrote: »

Looks like the trend is :

If you never pay any interest because you always pay the full balance each month, then you are given a high interest rate.

Not quite sure of the thinking behind that other than "We hardly make any money out of these accounts so, if the payment does reach us late, then we'll make as much as we can out of it." Thinking about it, I suppose most of the people who clear the account every month do not do it by DD, so there is a good chance that the less-well organised may accidentally pay late occasionally, thereby incurring the high interest charge and a penalty fee.

Or maybe it looks good on their balance sheet - x% of our accounts are above 35% interest.

Can't see the logic of the customer thinking - I'm a good customer because I always pay the balance off every month - that's their worst sort of customer - they never make any money out of you.

Perhaps the strategy for the card user who objects to the high interest rate even though he doesn't ever pay it, is to leave a small balance on the card once every three months or so - just a few pounds so that the interest payment is pennies rather than pounds - just so that the computer doesn't pick the account out as one from which the card company does not ever recoup any interest.

Do they not get anything from the transaction charges the shop have to pay to accept them - or does that all go to Visa/Mastercard etc.

I always assumed thats how they funded the reward points etc. various brands give out.

Pikeyp

Capitol One Visa here .. £800 credit limit

All rates gone up from 30.34% to 39.34%.

I did have about £150 outstanding but I recently got one of those Amazon Mastercards with 0% transfer deals for 12 months so .. off it went!! .. I'll probably keep the card for a while.

JennyBum

Ok here is my problem. I also received the letter explainging they will be putting my interest rates up to 39.9%. I have a classic card with credit limit 800, the only trouble is I didnt realise I was over my credit limit this month by £12, and what with the interest etc my balance now stands at 854. I would like to opt out of the new interest rates by freezing my account, just made the call to capital one, they say I cannot do this until my card is back to its limit! And i cannot make a payment until next weds 25th, and they say on the letter to opt out I need to contact them brefore the 23rd! Can they still freeze my account at the old rate after this date does anyone know???

TFD_2

My last statement from 9th Nov shows the interest rate unchanged at 30.34%. Do you reckon I've got away without a hike?

Having said that, not that bothered if they do, as they have never and will never make a penny on interest from me...

Dave101t

just checked my online account but it says to refer to the original credit agreement, which will be out of date anyway. but as i pay off every month, they can charge what they like, it will never be applied to the account!

merlyn2003

Card: Classic
Old Rate: 30.34%
New Rate: 39.9%
Type of customer: pay off the card in full each month
Change comes into effect on April 1st 2010

stebiz

merlyn2003 wrote: »

Card: Classic
Old Rate: 30.34%
New Rate: 39.9%
Type of customer: pay off the card in full each month
Change comes into effect on April 1st 2010

Yes, got the letter too.. However mine too will be paid off each month, so no real issue here. I do think that with the Bank Rate being so low, that they are being greedy. I don't feel that bad down getting 40k plus written off (unenforecable CCA's) on a number of cards/loans. These companies will go after as much cash as they can.

Fairzo

Letter received yesterday. Platinum account, interest going up from around 11% to 17%. Closed the account out of principle.

CannyJock

Fairzo wrote: »

Letter received yesterday. Platinum account, interest going up from around 11% to 17%. Closed the account out of principle.

17% is a typical rate. Whichever card you apply for now to replace it will probably start at that