Capital One raising my interest rate

“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.”

It’s a good thing I put almost nothing on my Capital One credit card, because that’s how the text reads in a pamphlet mailed to me this week.

I’ve never missed a payment and I always either pay it in full or pay at least half of the balance when I do use it for a larger purchase. And that’s rare.

I’ve had the account for six years, and the rate went from fixed to variable a year or two ago. I didn’t fret because like I said, I hardly use it. The only things on there are charges for our newspaper delivery and EZPass replenishment charges. The interest rate, while variable, hasn’t gone above 10.9%, which is where it’s at now.

But that’s all about to change.

I had to re-read this thing a number of times because I finally understood, through the gibberish, that my current rate of 10.9% will stay as is through January 2010. Then it says, “Beginning within two billing periods after that, a variable rate equal to 17.9% as of 1/28/2010. This APR may vary monthly and will be determined by adding 14.65% to the Prime rate.” Huh?

My FICO score hovers around 800 and right now my balance is paid in full; the credit line is a paltry $5,000. So what gives? Apparently, I’m not the only one facing an insane rate increase. According to, many Capital One customers are appalled at the situation. The article goes on to state that the company is likely pulling this shit now because “After June 2010, they won’t be able to do so under new rules adopted by the Federal Reserve.”

Who knows what shape the economy will be in a year from now? This is putting the cart before the horse. The only recourse is to decline the changes, resulting in the account being closed. I won’t be doing that.

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