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Capital One Credit Card Catch?
fjf_felix
Posts: 3 Newbie
in Credit cards
Hi, I'm thinking applying for a Capital One credit card. It offers excellent conditions and the less fees on balance transfers. However after reading an American article about "Credit card companies' evil tricks" on MSN I'm a bit concerned...
According to this article, Capital One (US) does not report its customers' credit limits. When a lender doesn't report a customer's credit limit, the bureaus typically use the "highest balance charged" as a proxy for the limit. The problem comes when borrowers charge about the same amount each month. Here's how it works: If you use $300 of a $1,000 limit that's properly reported, the all-important credit-scoring formulas figure your "credit utilization" at 30%, and that's good. If your limit isn't reported and the highest balance you ever had was $300, it looks like you're using 100% of your available credit -- and that's bad.
My questions is: is it the same in the UK? Is Capital One (UK) and other companies not reporting customers' credit limits?
Many Thanks,
Felix
According to this article, Capital One (US) does not report its customers' credit limits. When a lender doesn't report a customer's credit limit, the bureaus typically use the "highest balance charged" as a proxy for the limit. The problem comes when borrowers charge about the same amount each month. Here's how it works: If you use $300 of a $1,000 limit that's properly reported, the all-important credit-scoring formulas figure your "credit utilization" at 30%, and that's good. If your limit isn't reported and the highest balance you ever had was $300, it looks like you're using 100% of your available credit -- and that's bad.
My questions is: is it the same in the UK? Is Capital One (UK) and other companies not reporting customers' credit limits?
Many Thanks,
Felix
0
Comments
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Hi felix
Welcome to MSE & the credit card board!
I've answered this question for you on the *Best Balance Transfer* stickyPeople who don't know their rights, don't actually have those rights.0
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