Tuesday, February 17, 2009

Capital One charge off rates increase

Capital One, is still a walking zombie that pretends it isn't, and the charge off rates on their cards continues to go up. January's charge off rate was 7.82%, up from 7.71% in December.

Capital One has been jacking up card rates, and then only belatedly, recognizing income they have accrued as unearned.

At least that way, they can try and manage their fictitious honey pot! Especially if the card rates go up, the pot size increases! From today's SEC filing:

When we do not expect full payment of finance charges and fees, we do not accrue the estimated uncollectible portion as income. The estimated uncollectible portion of finance charges and fees is adjusted quarterly.

One Capital one's Septemebr 30, we had this line item.

Income statement adjustments for the three months ended September 30, 2008 reclassify the net of finance charges of $1,369.0 million, past due fees of $240.8 million, other interest income of $(35.3) million and interest expense of $491.8 million; and net charge-offs of $711.4 million to non-interest income from net interest income and provision for loan and lease losses, respectively.

For 2007, we had this:

Income statement adjustments for the year ended December 31, 2007 reclassify the net of finance charges of $6,334.8 million, past due fees of $1,004.1 million, other interest income of $(167.3) million and interest expense of $2,681.7 million; and net charge-offs of $2,201.5 million to non-interest income from net interest income and provision for loan losses, respectively.

At least Capital One has one area with growth!


Anonymous said...

Here's how the common cardholder is taking the brunt of Capitol ones bad management. Mailing to many cardholders, Quote"Due to extraordinary changes in the economic enviroment, we're reviewing our existing credit card accounts. Having considered these economic conditions, your account's current Purchase rate,(which is 9.9% my insert not in letter)and the lenght of time you've had this rate and account (ten years) we will be increasing your Purchase rate" the rate is going to be 17.9%. Each customer has the right to decline these changes by closing the account to more purchases and paying off the account at the past rate, which I have opted to do and so will anyone with a brain. Other companies are happy to offer better deals. Capital one do you think your going to stay in business treating what customers you have left this way?

Anonymous said...

I would encourage anyone to write their congressperson and tell them not to bail out anymore of these companies. They are obviously going under anyway. Aren't enough of your interest charges going to them...now they want your taxes too? Feel free to copy my letter and send it to your congressperson:

"I have officially moved from the position of letting congress decide what is the best way to handle this economic crisis to saying I do not want my tax dollars going to bail out any of these banks.

I pay all my credit card bills on time but was greeted this morning with a notice from Capital One that my rate will be going up from 10% to 17.9%. Never been late or had any default. Now, my tax money has to go to help them out of their troubles? Aren't they already getting more than enough?

It is a ridiculous concept in the first place that I can sign a contract that agrees to borrow money at one rate and have them decide that original contract is null and void then proceed to raise my rate for purchases I have already made. A retailer can't call me up and say 'we think you should pay more for the TV you just bought, you now owe us $100 more.'

I think it should be legal to tell me that any future use of the card will result in a higher rate for those future purchases but not on something I have already borrowed at a rate that was suppodedly agreed upon.

I have decided that 2006's tax rate was too high, the government now owes me $2400. I hope you can detect my sarcasm.

Thanks for your time and please don't give Capital One any more of my money."

You can find your representative here: https://writerep.house.gov/writerep/welcome.shtml

Your senator here: http://www.senate.gov/general/contact_information/senators_cfm.cfm

Anonymous said...


That's the senators' link.

Anonymous said...


Sorry, don't know why it cut those off.

Anonymous said...

I received the same upsetting letter today from CapitalOne. What I thought was hysterical was that I also received balance transfer checks with a 0% finance charge for 12 months. Hopefully CapitalOne will feel the pain of the good customers zeroing their balances!

Anonymous said...

Yesterday I received notice from Capital One of the rate increase from 7.9% for purchases/transfers to 17.9% & 24.9% respectively. Card member for 9+ years with a high credit limit, paid off monthly, and a significant Direct Banking savings account to boot. Couldn't close my account quick enough despite all their pleadings and reasonings in the phone call.

They are hurting their best customers with the one-size-fits-all-defaults rationalization. Good riddance Capital One. I will now be closing all my accounts with you after this zinger.

The new credit card bill is too little to late and it is giving the credit card industry plenty of time to change the rules of the game so they continue to hurt the consumers who can least afford it.

Anonymous said...

I just received a notice that my rate is going from a wonderful 7.9 to 17.9. This is just their way of "getting the increase in" before they pass the new credit card bill, and frankly, I think it's bull. I WILL be switching cards!

Anonymous said...

Beneficial content! Will you follow up on this particular matter?

Anonymous said...

This bank is an example of pure greed and evil...I believe in Karma and it will surely find itself in desparate shape and shut every one of its offices due to the way it treats people, people who are working hard just to stay in shelter and have food.