Capital One, change T&C's for the worst

Northants_Simon

I have had a Capital one card for about 6 years, I got it when I didn't have a very good credit rating and have paid the balance in full every month for six years. I now have excellent credit history, nothing negative at all, got a mortgage last year, recently got another credit card with a £20k limit.

All in I'm the perfect credit risk, I have a mortgage, car loan and credit cards all up to date, have a good job and earn a good salary.

Why then do Capital One feel they want to get rid of me as a customer?

They wrote to me recently to say that due to the high risk they had increased my interest rate to 40%!! I could opt out if I wanted, which I did. I have now received a letter saying my account has been terminated. I have been putting about a thousand a month on the card and paying it in full, I have never actually paid any interest.

On phoning Capital One I was told they can't tell me why they have done this, but they would consider me a high risk, hence the high interest.

I have checked my credit record, they haven't even looked at my credit report, which is excellent.

Is it just Capital One's way of getting rid of customers they don't make any money from? They have never made anything from me in the six years of running the account.

Typhoon2000

If they haven't made any money from you in the last 6 years they can change the interest rate to anything and they still wouln't make any money from you!
May be your new credit card and its credit limit took your unsecured borrowing/ potential borrowinng as a proportion to your income past what they would deem low risk.
Samething happened to my 3 MBNA cards, upt to 34.9% from the typical APR's they were before. Now I payback in full and charge everything to MBNA to get rewards - they made a few pounds out of me before but nothing now

rsykes2000

Typhoon2000 wrote: »

If they haven't made any money from you in the last 6 years they can change the interest rate to anything and they still wouln't make any money from you!
May be your new credit card and its credit limit took your unsecured borrowing/ potential borrowinng as a proportion to your income past what they would deem low risk.
Samething happened to my 3 MBNA cards, upt to 34.9% from the typical APR's they were before. Now I payback in full and charge everything to MBNA to get rewards - they made a few pounds out of me before but nothing now

They do make money from you, every time you use your card, the retailer pays a transaction fee which MBNA get some of.

Eydon

rsykes2000 wrote: »

They do make money from you, every time you use your card, the retailer pays a transaction fee which MBNA get some of.

Are you sure about that?

The card acquirer gets a cut (i.e. the bank that supplied the terminal to the shop) some of which then gets paid to Visa/Mastercard. But I don't think the card issuer gets anything from the transaction. They make their money from interest and account fees.

At least that's how it used to work.

Northants_Simon

Don't know, but I do know I get charged a hefty amount whenever one of my customers uses a credit card to pay me, somebody is making money from it. For example Amex charged me £95 to process a customers payment of £1600.

Eydon

Yes - that money will go to the people who provided your terminal, and they will then have to pay Visa/Mastercard/Amex out of it.

david39

Capital (and many other issuers ) have been going through this process for a couple of years or so. They did it to me, with a similar credit history, two years ago.
There was a small current balance on the card at the time, which I told them I would clear on the due date and they could then close the account.
They rang me up three days before it was due to remind me!

They never gave me a satisfactory explanation as to why they treated me that way so I assumed they just didn't want my custom any longer.

If you always repay the full amount each month, it doesn't matter what interest rate they charge, of course, but I just felt better after I had told them that, like them, I was just as choosy about who I dealt with.

withnell

Like you said you make them very little money - so the additional risk of your borrowing has made your account too risky for the amount they make on it.

Having card, car loan and mortgage doesn't automatically make you low risk I'm afraid!

PNPSUKNET

having too much can be as bad as not much, but if you are not making them money why do they need you

borders_dude

What it comes down to is that capital one, like any business can pick and choose who they want to do business with.

To be fair, if they arnt making any more from you, why would they want you on their books? It costs them money to issue your card, send you statements etc etc; They exist as a business to make a profit, if you arnt generating any part of their operating profit then I have to agree with their stance of getting rid of you.

Sounds daft, but thats business.