Capital One has long offered great deals on credit cards. However, most consumer advocates and credit experts have shunned their products because of an extremely damaging credit reporting policy.
Capital One has refused to correctly report credit limits to the credit bureaus for years. Instead of your actual credit limit, they reported your highest balance to the credit bureaus. This would damage your credit score by making it appear that your account had a low limit and a high utilization rate. Capital One claims to have done it for their cardholder’s "privacy" but it was likely just to hide the real value of their users from other credit card companies. We talked about this issue in an article called "The Case of the Disappearing Credit Limits."
On Friday, Capital One announced that they would change their policy and start reporting credit limits. Hooray! Almost everyone with a Capital One card could see an increase in their credit scores when this change takes affect. Capital One has finally decided to do the right thing for their consumers.
Or have they? ConsumerAffairs has reported that this policy shift is being paired with a dramatic interest rate increase for some of their borrowers. Some cardholders have seen their rates increase 5% or more without making any late payments or account changes.
Is this a case of two steps forward, one step backward for Capital One?
Emily Davidson
is editor of CreditBloggers.com and a former credit expert for the
credit bureau, TransUnion. She writes about credit and personal finance
topics.
{ 5 comments… add a comment }
I’m so tired of companies that don’t protect the consummer. I just spent countless hours of the phone today with a reputable electronics company who have no concept of customer service. It is a shame that major companies don’t protect those who keep it going financially? Is there any company that cares about its people?
I got my rate increase notice in early August. I have had a fixed rate of 12.9% since opening the card ten years ago. (I now realize I was being ripped off, as others have had 9.9% or lower.) In that time, my credit score has gone up above 740 and I have never made a late payment. They even sent me a credit line increase notice in July and told me what a good customer I am. I use the card frequently and pay more than the minimums. Their current offer is 19.9%. My only other option is to close the account and pay the current balance at 12.9%. I don’t want to do that since it is my oldest account and it was the only account to speak of for the first few years out of college. So I will pay it off before the switch over date and never use it again. Such a shame that a once-good company could screw their loyal customers this way.
I still will never ever get a Capital One credit card. They try to act like they care about the consumer with their non-stop “No Hassle Credit Cards” commercials, but they obviously don’t.
I still will never ever get a Capital One credit card. They try to act like they care about the consumer with their non-stop “No Hassle Credit Cards” commercials, but they obviously don’t.
Could you increase the credit line please,thanks.