Why Jason Dislikes Capital One Credit Cards

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Let me just say that I only have experience with Capital One’s credit cards and not any of their other services. But my experience with their cards has made me weary of ever looking into using them for any other financial services. Last month I received a letter in the mail telling me they doubled the limit on my platinum card with them and I would be receiving an upgrade to their no hassle rewards card. Sounds great? Well, it would be if my original limit wasn’t only 300. And it has been that way for over two years since I opened it. I have called in the past to get it raised but have been told they don’t do customer credit limit increases.

My limit with them now is literally 10 to 15 times lower than the limit other companies give me. Their reward program is also subpar but that is not the worst part. They also don’t report your real credit limits. They only report your high balance. So, for example, let’s suppose your limit was $2000 and you charged about $400 per month with $500 the highest ever balance. Every month you would have 80% utilization (400/500) instead of 20% (400/2000). This will hurt your credit score. You can get around this by making large purchases near your limit or taking advantage of a no fee BT if you’re offered one. That would make the high balance appear as your “limit.” But that seems like a hassle unless you were already going to do this. And most won’t even realize they need to do this to avoid this credit score pitfall.

I could understand this for a card with no preset limit but not for their cards with limits. The sad thing is they probably do this to keep its customers with low credit scores. This makes their customers less attractive to other credit issuers. They will then receive worse offers and be more likely to just stay. A pretty sneaky way of keeping customers. I guess this makes good business sense for them as they seem to target people with little or bad credit or who are not informed about their policy. While this makes sense for the profits of Cap1, it’s not good for customers.

Why don’t I cancel the card? Well, it is one of my older cards so I don’t really want to get rid of it. That would lower the average age of my credit history and, therefore, credit score. Also, unless it has been changed, they have no fees for oversees transaction. These can range from 1 to 3% on other cards. I guess this is the one redeemable quality of the card as long as they keep it.

{ 7 comments, please add your thoughts now! }

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7 Responses to “Why Jason Dislikes Capital One Credit Cards”

  1. eROCK says:

    I like my CapOne credit card, primarily because it has helped me build my credit from the start. However, it’s good that you point out that other cards offer a better balance and better int rates. It’s ironic that this story is written a day or two after I just talked to CapOne. They said they are issuing no CL increases, period. My limit is $6,500 (I also use this for business expenses) and my int rate is 13.9%, once my balance is paid, I think I’ll take some of the advice here and investigate a better CC company. I was also told that I can be a member of the rewards program by invitation only … my credit score is 730+ and I’ve been with CapONe for seven years, what are they waiting for!?

  2. dePriest says:

    I don’t care much for Capital One for two reasons in addition to the one above: they didn’t close one of my cards when I requested (I found this out months after I’d made the request that it was still active), and if you have a secured card, you have to ask them to refund your deposit, even after five years of perfect credit across the board. They told me when I contacted them about it that I would have to wait until the next round of returns of deposits, which was quite a bit in the future, but to their credit I received a check with interest within two weeks.

  3. fl mortgage says:

    Wow, I was not aware that they did not report the credit limit. Makes no sense why they wouldn’t do that? I need to be careful about how much I spend now. I haven’t had any issues with them though, I usually pay all my balance in full.

    I had an old cap one card that they automatically increased the credit limit and I never use that card. Weird. Add that in to the fact they turn down my request for a CL increase for my primary card.

  4. Steve says:

    Ugh… Capital One.

    They are really a bunch of boobs. Trying to rebuild my credit many years ago I had a couple of secured credit cards with insanely low limits, like a $400 credit line with a $250 deposit and $49 anuall fee. Total rapeage.

    Anyway, to thier credit, it did actually improve my credit a bit having them on there for a few years. As my bankruptcy neared its discharge date I started getting a lot of offers for high limit unsecured cards in the $5k – $15k range
    from various places like Amex, Chase and even.. Capital One.

    So I take the $5000 Capital One card with no fee. No problem, card arrives, credit line is in place and I leave it for awhile. (I rarely actually use the few cards I keep).

    After six months or so I figure theres no reason to be paying C1 $49/yr for a card with such a low limit (I now have around $20k in unsecured cards available to me), so I call up Capital One to ask them to give back my $250 security deposit and remove the annual fee.

    Thier answer? NO F’N WAY. I tried to explain I already had another unsecured card from them with a high (for me) credit limit but they could really care less, he literally told me there was no way I could get the fee removed even when I threatned to cancel the account.

    I ended up cancelling the account and getting my $250 deposit back and shortly thereafter cancelled the $5k card too. What a bunch of idiots.

    They also are REALLY heavy into telemarketing. They called and called and called even though I asked to be removed from all telemarketing offers three separate times and told them every time they called that it was a cell phone and illegal to make marketing calls to.

    Not to mention that if you pay your bill early, within a statement period but before your bill is generated, they will still try to charge you a $50 late fee, which you will have to call and have removed every time.

    I guess I got what I needed out of them but unless you have no other choices because of a bankruptcy or other unfortunate financial situations, stay clear of these guys.

  5. Jason says:

    Heh, a little ironic that they gave me the no hassle card yet it is a hassle to get them to report your correct credit limit.

    I still don’t understand why they are so stingy with credit for certain customers. I understand the business point of view for the credit limit reporting thing but not the available credit. For example, couple years ago when I just had this card and another one I had to make about 2k of purchases for family members. Well, obviously I used the card with 2500 limit and not the 300 one. And that was a time when I sometimes kept a balance from month to month if money was tight.

  6. Al says:

    There are several reasons to dislike Capital One credit cards.
    With respect to the credit limits, a few months ago I called Capital One to get my credit limit increased. I figured with a good credit score, at least five years with no increase and a salary that had almost doubled in that time, there should be no problem with a small increase. I was wrong. The first service rep I talked to said only Cap One would initiate credit increases, and that customer requests were not granted. Finding this policy strange, I asked for her supervisor, who explained that Cap One reviews payment history, activity etc. to grant increases. When asked why my history didn’t justify an increase, she stated that I was not offered an increase because I was, in effect, costing Cap One money since I paid off my balances on time each month. Thus, apparently Cap One’s policy is to only grant an increase to those customers likely to generate more money, either through carrying a higher balance (without paying it off) or by being subject to more late fees.
    Cap One’s reward program is also subpar, in that your rewards are often less than that available from other companies. Also, Cap One has consistently reduced the rewards available over time, especially with respect to getting airline tickets.
    Lastly, Cap One refuses to give existing customers the same deals as new customers. For example, for any given card, customers must continue to pay the annual fee applicable to when they joined (subject to requesting a waiver each year), even if a new applicant may receive the card with no annual fee EVER. Check the terms for your card on their website to see if you’re subsidizing newer members.

  7. Another Jason says:

    I read on another board from a Cap1 employee that Cap1 considers itself a credit repair company first, and a lender second. That makes sense after my own experience with Cap1 and also reading numerous posts on the company as I have the last few weeks on numerous message boards.

    I was a perpetual late payer to numerous credit cards. Then had a small charge off June of 2004, plus $6500 in other CC debt all at 20%. My Equifax Beacon FICO was 586. I’ve spent the last two years systematically paying it all off (including the charge off).

    Then last year, when my Equifax Beacon was at 620, and I still had $2,000 of Discover Card outstanding, I applied for a Cap1 Platinum (unsecured, no annual fee, 8.9%). I got it, for $1,000. I’ve been perfect with it probably charging a total about $1500 (never going over the limit of course) and paying it off early most of the time. I now obsessively manage my credit. My Equifax Beacon FICO is now 710 and climbing.

    So after 13 billing cycles I called for a CL increase — no dice. Was I surprised? No. Was I frustrated? Slightly. Was I insulted? Not really. I alone sabotaged my credit with many years of juvenile behavior. It’ll take many years to fully get my credit back. Yet I’m still glad I got that Cap1 card. It has unquestionably accelerated the improvement in my score.

    I suppose I’m the prototypical Cap1 customer, just as much in need of credit repair as in credit. But now thanks to that repair, I now have leverage to shop around for credit whereas before I had none. My business with Cap1 was rewarding for both sides. And by and large I’m satisfied. If I’m not happy I can now go elsewhere.

    Sincerest Regards

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