Capital One Raising Interest Rates. Are They in Trouble?

N.Stormy Milam Malone

As a content producer with Associated Content, at nearly 150,000 page views, I try to be responsible with my mini-bully pulpit. Today, however, I'm going to come out with guns blazing and aimed at Capital One. I thought in advance I might call Capital One and warn them of the impending verbal slaughter headed their way, but, nah, what the heck. I'll just let 'em have it.

Since the first of the year (2009) Capital One has graced me with 7 pretty tasty offers. 7 offers on one account in 2 months and 11 days. They really must love me over there because my rates held steady for years and my payments were always above minimum and always, always on time. And my credit report and FICO score are the envy of many. Yes, I have debt from a past life but always good credit and several years of steady pay down.

But what really sold me on Capital One as my go-to card was this stalwart blurb, printed over and over on all their materials to me.

HOW YOUR ACTIONS COULD AFFECT YOUR APR

"UNLIKE SOME COMPANIES, WE WON'T INCREASE YOUR APR SIMPLY BECAUSE:
YOU PAY LATE ONLY ONCE (Never happened, nada.)
YOU GO OVER YOUR CREDIT LINE (Like I'm that stupid.)
YOUR CREDIT RECORD CHANGES WITH ANOTHER LENDER (yeah, to the upside.)

After a decade of seeing the "we got your back" reassurance from Capital One, it eerily disappeared from it's customary box about a month ago, to be replaced by the following:

HOW YOUR ACTIONS COULD AFFECT YOUR APR

IF YOU, AT ANY TIME, PAY LATE TWICE IN 12 BILLING PERIODS, WE MAY INCREASE YOUR APR ON THIS OFFER

Two weeks later, here's what my trusted financial bed-fellow, Capital One has the balls to say:

Due to extraordinary changes in the economic environment, we're reviewing our existing credit card accounts (on the down-low, natch). Having considered these economic conditions (when I failed to run up my debt with those special offers), your accounts current purchase rate (13%)and the amount of time you've had this rate and account, we will be increasing your purchase rate.

The following will be effective, blah blah, after April 17, 2009: (Cut to the quick)17.99 percentage.

I know changes are coming down the pike with the predatory credit card policies, but it takes a lot of cheek to raise rates on people who are paying lots of taxes to bail out financial institutions.

In the spirit of fairness, my other credit cards have dropped rates.

My only conclusion - Capital One must be in real trouble. They've been flying under the radar, but I think they've just popped on the screen as a bogey.

Question - should you sell Capital One stock now? Taking language from my erstwhile financial parter, Capital One, I have this advice, which is my lame opinion and nothing more:

Due to extraordinary changes in the economic environment, I've reviewed Capital One's existing actions. I can only conclude that it is time to jump off their sinking ship with all the other respectable rats and SELL, SELL, SELL.

And if you're in tough economic times and have a choice to make, to pay either Capital One or American Express, I'd go with American Express and send that Capital One statement right through the shredder.

*-+`* And here is the rest of it.

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