beware of the hidden charges !!!!!! - capital one

roastduck

Hi Everyone,

Merry X'mas. Just thought of sharing with you all my experience (so far) with Capital One Cashback credit card....

well, Capital One was suppose to give an attractive 4% cashback per pound spent, but in reality and potentially the company takes back 1.5% from their customers every month!!!!!!

the story goes ... i received my 2nd back statement from them this evening and as usual, i scanned through the statement fairly quickly to check through my food shopping bill ... there .. spotted that i've been charged with ( in advance )1.5% purchase interest ! i was really mad and couldn't work out at that point what did this mean? .. phoned up Capital One customer service ( the line probably was connected to somewhere in india AGAIN ) and after listening to one lengthy 30 mins explanation , i understood that this is what Capital One does - charge customers in advance 1.5% of their total money spent per month . to this date, i still couldn't be sure if I would get my money back if i pay for my statement in full. Can't wait to see my 3rd month bank statement.

How can Capital One do this? charge customers in advance for money that they haven't spent?

Anyway, the entire telephone conversation was very annoying. It went round and round to the point that i couldn't stand the customer service guy anymore coz all he kept on saying was " right " .. " umm. right and right " .... he couldn't even tell me if that i would get this money back on my next month statement if i pay in full this month?

so made up your mind for those who isn't with Capital One yet? do you really want to go for this credit card company?

Firsttimebuyer_4

This doesnt sound quite right... I scanned throught the full credit agreement on the capital 1 website and found nothing mentioning the 1.5% purchase interest.... I would phone up again and ask them to justfiy the charge and show them where in the credit agreement this was mentioned... I did see they have an annual charge of £0 payable in advance though.......nice one that..means they can just add whatever they want in there when the time is ripe....

https://www.capitalone.co.uk/creditcards/secure/terms-and-conditions.jsf

Current Amounts of Other Charges and Other FeaturesCash withdrawal handling fee:
3% of amount withdrawn, minimum £ 3.00
Foreign transaction fee:
2.75% of the transaction value
Balance transfer handling fee:
3% of the amount of the transaction
You will pay us a fee for having the account ("Annual Fee"). The Annual Fee is currently £0 payable annually in advance for each year or part of year.

MarkyMarkD

I don't think you are right, roastduck.

I think you've been charged purchase interest on your second statement because you failed to settle your first statement's balance in full by the due payment date.

Stephen_Leak

Firsttimebuyer wrote: »

I did see they have an annual charge of £0 payable in advance though.......nice one that..means they can just add whatever they want in there when the time is ripe....

I think that is there simply to show that there is no annual charge. It does look odd, though. If they ever made an annual charge (Cap1: don't even think about it!) it would be a change to the T&C's and they would have to give notice in writing, etc.

PS. Roastduck: a Direct Debit might be a good idea.

missile

I don't understand this one, maybe happens if you do not clear balance?

I have a Capital 1 card and always pay full balance every month. Never been charged in advance or had any other charges levied on my account.

If you do not clear the balance better to forgoe the 4% cash back and get a card with lower interest rate.

mrmajika

I too clear in full each month and I too have never been charged.

roastduck

thank you for all the discussion so far ....

no no no ... this was what happened - i have paid my 1st month (October 07) capital one bank statement in full by direct debit, but what i didn't realise at the time was that there was a " recommended date of payment " and " date by the which payment needs to be settled by " printed at the bottom of the page ... i only saw the the latter date, so i paid on the eve before the last date of payment ( i am not stupid , i didn't want to pay on the last day but every time i phone capital one, the phone line is forever on hold , sometimes i hold up to 30 minutes and i still didn't get to speak to anyone from customer service until the the night before the last date of payment) and i only received the statement on the 5th anyway.... so i've paid on the 11th rather than on the "5th - the recommended date " thinking that direct debit means money gets transfer from my direct debit account straight away and i would be fine.... little did i know that Capital One's direct debit method is SO different , they would only get the money debited from my account 3 working days later ... so last month i've already had a penalty of £12 for late payment and i got upset about this ....

....but nevermind, that was a lesson to be learned i told myself and just forget about it ... then what happened next was even worst ... they didn't issue me a November statement so i called customer service one again this week, this time , i paid in advance and asked why i didn't get my november statement. anyway, i asked the guy to direct debit whateven i own them from my debit account so that the credit will be ZERO and ask for a statement .

... ok, last night i received the statement in the post , this time i saw on the statement (December 2007) a column of twenty odd pounds for purchase interest !!!! what the hell is this? i 've made sure i pay back everything in full already , why was i being charged ? and can someone out there please help to explan what purchase interest is? ... the customer service guy explained to me in a very complicated way that it meant if this time i pay in full, i would get this purchase interest back ... this amount was charge in advance ..... i have never come across such rules .... how can capital one charge me something that i have not spent yet? .... and it sounds like i am the only out there experiencing this penalty ... what's going on? i still don't understand what this hidden charge is about?

how should i go about fixing this issue?

please advice.

roastduck.

YorkshireBoy

roastduck, it seems like you're mixing up direct debit payments with debit card payments.

The reason you've incurred purchase interest is that you didn't settle your bill in full by the due date. You'll continue to incur interest until either a) you've paid 2 consecutive statements IN FULL, or b) you overpay to create a small positive balance on the account.

Apologies if I've got it wrong but it is a little difficult to decipher exactly what went wrong from what you've written.

wishiwasarichgirl

I've had the capital one card since they started doing the 4% cashback and not had any charges, with any credit card, when I am on the phone to them to activate the card I set up the direct debit for payment in full there and then so I know I can't forget to pay it.

just had a look at my past statements, under the list of transactions it does say:

[FONT=Arial, Helvetica, sans-serif]The interest you're paying this month is based on the following monthly interest rates[/FONT]
[FONT=Arial, Helvetica, sans-serif]Purchase Interest 1.240%[/FONT]
[FONT=Arial, Helvetica, sans-serif]Your estimated interest payable next month, if your minimum payment has cleared by 05 November, is £9.01[/FONT]

I read this as meaning if you only pay the minimum payment you'll be charged, I have not had any charges added to any of my statements as they have been paid in full.

I think roastduck's charges must be down to him not giving enough time for the transaction to clear, the recommended payment dates are a good few days before the final payment date, and they are printed fairly clearly on the statement.

missile

It is a bit clearer what went "wrong"

I would suggest OP sets up a direct debit so that this never happens again. Alternatively OP can pay his account via online banking. Much easier than by telephone.

KiKi

roastduck wrote: »

little did i know that Capital One's direct debit method is SO different , they would only get the money debited from my account 3 working days later ... so last month i've already had a penalty of £12 for late payment and i got upset about this ....

Their direct debit method is NO different. ANY transfer between banks / credit cards / debit cards to make payments takes 4 working days. Capital One recommend you leave 5 working days to make absolutely sure they receive your payment. They make the dates very clear on the statement.

Perhaps you should sign up for their online banking service, so that you can check your statement at any time?


KiKi