I received an "Important Notice" from Capital One "of a change in terms" regarding my account.
The notice stated that "due to extraordinary changes in the economic environment, we're reviewing our existing credit card accounts. Having considered these economic conditions, your account's current Purchase Rate and the length of time you've had this rate and account, we will be changing your Purchase and Balance Transfer Rate" - "However, you will not be assessed the higher Purchase Rate listed below until next year."
Capital One is increasing my Purchase APR from 4.99% to 13.9% and the Cash Advance APR will increase from 9.9% to 24.9%.
1. I have had this Capital One account for over three and a half years
2. My account has always been in good standing
3. There has been no material change in my FICO score
The only purpose for the increased interest rate is to try and pump up their income and generate profits.
Now I do have the "choice" to not accept these new terms, but then Capital One will close my account and I can pay off any outstanding balance on the original terms and conditions. However, by closing the account my credit report will indicate a decreased amount of total available credit which will in turn impact negatively on my FICO score.
The only sensible thing for me to do is therefore ensure I keep my account open and maintain a zero balance.
I believe Capital One is acting in bad faith and would be interested to hear other experiences with the Bank.
Keep in mind that Capital One received over $3.5 Billion of Bailout Funds in December 2008 - the purpose of which is to make credit more readily available. It is clear that they're doing the opposite by making it more expensive for consumers to borrow. Isn't this a violation of the terms of receiving Bailout Funds?
Congress needs to act now to prevent banks from putting the screws on already cash-strapped consumers.