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Capital One Jacks Up Interest Rates

Written by Nickel - 34 Comments

In case you haven’t heard, Capital One has recently been increasing credit card interest rates for their cardholders. While it’s not unheard of for card issuers to raise rates if you engage in risky financial activities (universal default, anyone?), Capital One appears to be jacking up their rates across the board. In some cases, this involves turning cards that formally offered 4.99% fixed rates into variable rate cards that charge nearly triple that amount in interest.

Remember… Credit card issuers can and do change the rules from time to time. “Fixed” rates are often only fixed until they change the rules (typically with 30 days notice), so be sure to read any correspondence that you receive from your credit card issuer(s).

And if you’re currently carrying a balance on a Capital One card, you might want to check into this. If it turns out that you’re facing an uptick in interest rates, then you need to think about finding a credit card that offers low APR balance transfers.

[Source: The Consumerist]

Published on August 6th, 2007 - 34 Comments
Filed under: Credit Cards, Debt Reduction

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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34 Responses to “Capital One Jacks Up Interest Rates”

  1. 1
    RateLadder Says:

    CCs are always jerking you around… You must pay them every month or risk financial ruin… Over drastic?

  2. 2
    MoneyNing Says:

    If capital one is like any other credit card company, I bet you can call them up and ask for your rate to be lowered.

  3. 3
    Cheryl Says:

    I got something in the mail from C1, it stated that the overlimit fees, latepayment fees, and returned check fees were going up…it stated nothing about my interest rate…?

  4. 4
    Minimum Wage Says:

    New advertising campaign:

    WHO’S IN YOUR WALLET?

  5. 5
    ted Says:

    I have never heard of that. i don’t know why I’m surprized. I thought we were the ones who keep them in business… so much for customer service!

  6. 6
    Jim Says:

    I know it’s simple,just whip out that credit card.How about,just paying for it when you want or can afford it.It’s such a novel idea .why didn’t i think of that before! credit card companies will be suing for your business!

  7. 7
    Cynthia Says:

    1. Rec’d note that my 14% C1 card was increasing to 19%. I called. I have perfect credit history with them. They kept it at 14%

    2. Rec’d note that my 4.9% C1 card was increasing fees — but not APR.

    C1 could not say why the difference.

    What I would like to do is switch my 14% C1 card to a lower interest C1 card. Appears that they only way I can do that is to transfer the 1200 owed to my hsbc card which has zero balance. Then cancel my 14% C1 card. And then reopen another C1 card at capital one.

    I like c1..have always had great relationship with them. But, sheesh, that looks like a ridiculous option/way to handle the change.

    But meanwhile, I don’t want to do anything that will reduce my credit score. My mortgage is paid off and I have no car debt. My lack of debt hurts my Fico score.

    So I need card accounts with long histories.

    Ideas?

  8. 8
    Steve "The Debt Settlement Man" B Says:

    Capital One are the biggest loan sharks out there. They notoriously utilize universal default to get consumers interest rates well over 25%, which just kills peoples finances.

  9. 9
    pablo Says:

    They raised my rate from 4.9 ‘fixed’ to 13.4. I called them and they lowered it to 9.9 variable. Debt ruins lives.

  10. 10
    Mark Graybill Says:

    I transfered the balance of another card to Capital One and was assured I’d have an APR of 4.99 until the balance was paid off. I’ve just come to find that they raised my rate to over 13%!

    I’m taking out a home equity loan at 6% and paying off the card tomorrow!

    I’ll never do business with Capital One again. I’ve never been late with a payment and I have almost PERFECT credit. As far as I am concerned, Capital One engages in consumer FRAUD.

  11. 11
    Dean Says:

    Capital One does suck. I have two cards with them, one is a $3 a month card that I’ve had for more than 12 years. Yeah, can you believe it, they charge me $3 a month. In the past they’ve waived the fee; later on they would only give me 1.50 credit. Now they won’t even waive the fee. They said they just had a meeting and can’t do that anymore.
    My other card with them has like 12.9. This $3/month card has two fixed rate transfers, one at 2.9 and one at 9.9(with 8.9 after one year fixed) and i noticed that it jumped from 12.9 to 19.8 since my last statement (may 08 to june 08) I called today and asked them to have it lowered. Put on hold for 15 seconds. Came back and said I was not eligible for any lowering of my APR. I told them that I would be transferring my $$ from that card immediately.
    ALSO, someone else I saw somplace had a similar situation. I wanted to get rid of this $3/month card and they wanted me to consolidate the two cards into one toget the lower rate. What a joke!
    KEEP A WATCH ON YOUR APR on these people. Capital One sucks. What’s in your wallet? Hidden APR hikes!

  12. 12
    Joe Says:

    After having been a customer of capitalone for ten years, I am finished with their inept and unethical business ways. Once I pay this card off, I’ll never do business with these crooked bastards again.

  13. 13
    Dude229 Says:

    did u know that someone’s suing C1? about time in my opinion!

  14. 14
    PissedAndMovin'On Says:

    I agree Capital 1 sucks. My family and I have 3 C1 cards. My wife and I have an above 800 credit score and two 4.99 fixed interest cards. Her and I just got notices that the rates on mine are going up to 13.9( I haven’t used mine in over 2 years) and hers will stay the same until April 2010 and she just paid her balance off in Jan. 08( we both have perfect payment histories) My son has a limited credit history( because of age) and his interest rate is 16.9 and his notice says his rate will stay the same. (all of the rates previously mentioned changing to “variable”) I made several calls to Capital 1 asking why such changes were taking place and why there are such differences in the rates. I got the same excuse every time ” it’s a business decision”. This is very unacceptable treatment to loyal “ontime” paying customers! It’s time to move on, we all can do better than this kind of treatment.

  15. 15
    JabaSubprime Says:

    Capital One is doing the same thing to me. I’ve had a fixed rate at 6% for I don’t know how long, and I just got a notice that they are raising it to LIBOR plus something variable rate (think that puts it at ~19% right now) due to no fault on my part. I must say I’ve never had a CC company do that to me before, so I was a little upset/insulted at first.

    Luckily since a couple of years ago I’ve started using my AMEX Starwood points card exclusively where AMEX is accepted and the Capitol One VISA only as a backup. I’ve just realized that the C1 No Hassle points card is actually pretty crappy. If you want to trade them for cash, products, etc. you are lucky to get 1/2% of your miles, which is terrible. If you can hit the flight cost just right with their flight reimbursement ranges you can get max 1%. With my AMEX Starwood card I can redeem for starwood hotel rooms and consistently get 3-5%. If you like Starwood hotels it’s a great card. Alas, this is not a plug for starwood.

    In closing, I find it a bit humorous how insulted people get when CC companies do seemingly unethical practices. I honestly had that emotion too, but there are so many options you have to transfer balances and what not. Unfortunately, I suppose some people w/ high balances and not the means to pay them off might could get locked in. I’m sure that’s what Capital One is “banking” on. It’s unfortunate for those folks.

  16. 16
    Steve and Upset Says:

    I have been a Capital-One card holder for ten-years plus. I have always carried a balance and have always paid my CC payments on time. I have a 7.9 credit rating and intend to keep this score. Today I received a notice that Capital-One will be raising my interest rate from the 7.9fixed to somewhere around 22-29 percent. This practice should be illegal, I will complete the transactions pending with CAPITAL-ONE AND THEN I WILL BURN THE CARD. I just wonder if Capital-One is getting BAIL-OUT MONEY, along with raping the consumer. I’ve had it!!!!!

  17. 17
    Moven-On Too Says:

    Last week I got a little booklet from C1 saying that my 14.9 rate would be raised to 22.9% as of April 17, 2009. If I decline this “offer” I must close my account before that date, and can then pay off the balance at the current interest rate, which has already increased 3-4 times in the past several years in spite of a perfect payment record.

    Talk about the last straw. I am now looking for a good balance transfer card.

    C1 must know this huge jump in interest rates and talk of closing accounts will scare card holders into paying their balances off and going elsewhere. C1 must need the cash badly to force good longterm customers out so they can make a quick buck….

  18. 18
    Bog Says:

    You think your rate is bad, I just got a note that these usurious people want to raise my rate to over 30%. They going to make it a venerable rate based on prime plus 27%. My old rate was 9%. Never made a late payment. Not that it will affect me, I usually pay off in full every month. But its the insult if the thing. I also have a high limit card with them. Gee, I change 35k a year, which is A LOT in merchant fees. and I pay in full every month. Not the kind of customer they want to displease.

  19. 19
    sdgirl1 Says:

    I canceled my card today. I have excellent payment history no late payments. They are rasing my card interest rate from 9.9 to 17.00. They can take the card and shove it. I have been an excellent customer for years. What are they trying to do go out of business? Who’s running that bank? My guess is they are trying to get rid of people that are not using their credit so that will clear credit for others to use. They want people to use their cards. That’s how they make money. Not just holding on to it in your wallet. Plus, the law is changing July 1, 2010 regarding credit card rules. The new rules are going to “curb some of the credit card industry’s most egregious practices, particularly the ability of issuers to raise rates on existing balances.” They are raising rates now because they know it will be harder for them later.

  20. 20
    Brian Says:

    I have been a Capital One customer for many years. I’ve always kept my account in good standing. Today I got a letter stating that effective July 2, 2009 my APR will be increased from 8.3% to 17.9%. I called to complain and talked to some lame supervisor who gave me the same excuses that were in the letter. The increase was due to “the challenging economic environment”. I was told my only two options were to suck it up and live with the increased APR or opt out which means closing my account, locking in my current lower APR and paying off the balance. Is Capital One brain dead? Are they living on some other planet? Don’t they know that everyone is facing “the challenging economic environment”? Increasing the APR only serves to put more people into more unwanted debt any prolongs paying down account balances. If you received this same letter send Capital One a message and opt out. What’s in my wallet? Definitely not Capital One. Their greed is shameful.

  21. 21
    Joely Says:

    Same thing that happened to Brian has happened to me too with Capital One. I’m an excellent customer with above 740 credit score (I happen to know since I’m in the middle of refinance so recently did a credit check). I’ve never been late with payment. Usually pay more than minimum. I used to like the card b/c they usually don’t charge transfer fee for balance transfer. I had recently paid off big chunk of what I owed them on a low interest balance transfer balance. Then, they sent me a flyer that says that they are raising my rate from current 8.53% to 17.9% (this equates to more than 13% above primate rate) effectively in August. Pay off or opt out. I’m so incensed that I don’t think I’ll even bother calling them to complain. I’m going to pay it off and close it down since I only have $200 on this card. I’m never doing business with Capital One ever again. I’ve learned my lesson. This is a predatory company.

  22. 22
    Georgianna LaRocque-Price Says:

    I, too received word today that Capital One will raise our interest rate 5 points as of April 2010. A few years back, before the economic crisis, our two Cap One cards were both raised to 9.9% — one was 4.9 and one 7.9, both were FIXED rates… So what was the reason as I have excellent credit rating, never late, and pay 3 to 4 times the minimum? “It was an executive decision accross the board” was the reason I was given. I was able to get them to settle at 8.9% but now they want to raise it to 14.9???? What the heck? Just because they can? I know that some states’ Attorney Generals did charge a class action suit. New York did not. I plan on calling my Senators and the White House tomorrow…. This is highway robbery against people who are struggling to stay afloat in terrible economic times while the government is bailing out the company and the President of the company takes a 6 figure salary…. Not fair. Totally unjust…. No reason for this! Call your Attorney Generals, Senators, and call the White House comment line — 202-456-1111. In 5 years, our interest on these FIXED accounts has gone from 4.9% and 7.9% to 14.9%! And, we have never been late, and we pay much more than the minimum. This is wrong….. Call! Demand that this be stopped. Hell, take the bail outs from these companies and give them to us, the little guys, who don’t make a 6 figure salary, so we can continue to pay off the increasingly obscene interest rates!

  23. 23
    Georgianna LaRocque-Price Says:

    It’s worse than I thought. They will raise the rate to 17.9 as of April 2010….. What the hell is that all about? Does Cap One really think this will help their cause?

  24. 24
    Joye Says:

    Capital One raised my rate from 8.5% to 17.9% . I called Capital One they told me I was a good customer, so watch out with all your credit cards. I called President Obama’s comment line at the White House , I talked to a really nice person , she told me to call my Ohio Representative Bob Latta. I called his office and they told me to send a letter with my account information to them. Also President Obama signed a credit card bill last week but it will not go into effect for another nine months and we don’t even know if it will help this problem .

  25. 25
    Joye Says:

    I called Capital One on June 4 2009 and talked to a representative I told him about my interest rate going from 8.5% to 17.9% . He was very nice and said he was transferring my call to his general manager the manager looked at my account and lowered my interest rate to 7.99% for nine months. He said after nine months they would see were the interest rates are , hopefully better, and review my account. He said I was a good customer and didn’t want to lose my account. Joye

  26. 26
    Thomas Says:

    Same boat as many of you. Credit score is higher than 750, customer for five years, no defaults, etc. and my fixed rate went from 7.9% to a variable 17.9%. The CSR blamed it on economy and said more than 40 million customers are affected by the change. They did the same “temporary interest rate reduction” but I am canceling anyway.

    The credit card companies are experimenting to see if you, the customer, will tolerate a variable promotional style interest rate. Fight it now or live with it forever.

  27. 27
    Gigi Says:

    Thomas, don’t cancel your card as that adversely affects your credit rating. Just pay it off and leave it open…. That’s worse for them. I called again seeing you all got a rate reduction and was told that I didn’t qualify for it…. I just paid it off with a credit union line of credit, 5.5% interest rate, and shredded the capital ones…. Done, they lost my business after about ten years…. I hope they go belly up and no one bails them out! Enough is enough! Legalized mafia is what it is…..

  28. 28
    fightback Says:

    They stink. I have been a good paying customer for many years paying on time. I called up and they will not lower my interest rate. They are going to loose… all good paying customers. I am one. I am paying them off and cutting my card up. They LOOSE. Discover has 0% for 12 months EVERYBODY. Pay them off and cut your cards up. Let them close down. They will not get another hight interest rate payment from me again. I hope they don’t get a another bail out again either!!!! Shame on them.

  29. 29
    fightback Says:

    They stink. I have been a good paying customer for many years paying on time. I called up and they will not lower my interest rate. They are going to loose… all good paying customers. I am one. I am paying them off and cutting my card up. They LOOSE. Discover has 0% for 12 months EVERYBODY. Pay them off and cut your cards up. Let them close down. They will not get another hight interest rate payment from me again. I hope they don’t get a another bail out again either!!!! Shame on them.

  30. 30
    fightback Says:

    NOTE>>>OH! by the way everybody! When you pay off capital one or any other credit cards…DO NOT CLOSE ACCOUNTS. That is bad for your credit score. So cut it up and keep it for a reference. Whatever you want to do with it, just DON’t close your account. Which I think is so stupid.
    BUT we will play by the rules of CREDIT CARDS!
    CAPITAL ONE DOES NOT WORK WITH THE PEOPLE!

  31. 31
    C1sucks Says:

    I am on permenent disabilty with a very high balance (nearly 5k due to medical bills) and have paid every monthly bill since 1999. Today I learned my APR was being raised from 10.9% to 17.9%!!! The minimum was even more than I could afford now. I called and they said they could return my APR to 10.9% for 6 months, but I dont think that’s going to lower my minimum. Pretty much screwed now. Any advice? I don’t think I’d be able to transfer to another card unless it had no transfer fees, and I doubt I could get approved for another card with such limited income. Blah. These guys are crooks.

  32. 32
    John Carbon Says:

    Well I just cancelled my two cards from them. I know my score will take a hit but they just instituted a 5 dollar per month “membership fee” for both cards, which equals to 120 bucks a year. Even if I pay down to zero balance I am still paying! So heck with them. They wouldn’t budge and said they would rather lose a customer than budge on my “membership fee”. they said it’s to cover the cost. So my interest rates plus merchants fees can’t cover your cost? that is just poor business and I don’t want to be associated a business who runs their ship poorly.

  33. 33
    John Carbon Says:

    fightback, in general I agree but when they charge an annual fee that they won’t remove (even though my original agreement was for no annual fee on both my cards).

    I WILL NOT pay them 120 dollars just to “keep” their card in my wallet. THAT is just CRAZY !

  34. 34
    Maria Says:

    I got rid of Capital One years ago. They threatened me with raising my rate to 27% or some ridiculous charge. I paid the card off quickly and closed them. I guess they thought I was broke when I just was taking my time paying them off. I was not late, I was not over limit and had plenty of room to use. They now are trying to get me back. Stay away from Capital One. I’ve also had problems with American Express but I keep their card. Capital One has always been a problem. Close your cards!

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