Saturday, February 7, 2009

Capital One jacks up credit card rates to 29.4%

Anyone with "spotty" credit history will have to face these new terms with Capital One:

22.9% Variable Rate
24.9% Cash advance rate
29.4% Default rate

Why would Capital One increase these rates to such an exorbitant level in this economy? Because Capital One books this interest, even though it isn't paid as revenue.

Just like Washington Mutual did with all their pay option loans.

They booked the "deferred interest" as revenue, until they went into bankruptcy.

This way, they could massage their numbers.

Capital One is now doing the same. They now are pretending that they are going to collect 29.4% interest on Credit cards that are going into default, and booking this as income!

Capital One needed another source of "unearned income" that wasn't earned, that they could show on their sheets.

I guess the hundreds of millions of uncollected past due fees wasn't enough!

So now we have more noncollectable phantom income.

What's in your wallet?

What's in your portfolio? Not Capital One. Capital One started their shenanigans in November of 2007, when they cancelled their purchase of NetSpend.

A year later, we saw that credit cards were a $900 billion problem.

And now, what is plainly apparent, is that Capital One's problems are getting worse.

But they need to pretend they're not!


Anonymous said...

Wow. I just got the notice. Isn't 30% considered "usury"??

I have always paid in time, I periodicaly pay it off completely, I have under a $1000 balance, and the only spot on my history is a ten-year-old bankruptcy.

Maybe I shouldn't take it personally?

Palmoni said...

Looks like Capital One thinks the whole world is now a credit risk so I wouldn't take it personally!

Anonymous said...

For Capital One I think it is only just a strategy for them. I know many consumer got problems on that company. Try to read some issues here about Capital One.

Pay off Debt said...

In the current scenario this hike seems to be something out of the blue. Maybe Capital One has different plans than Washington Mutual.

Anonymous said...

Hi : )
Buying on line or in-store? which do you go for? just wondering lol.. i like in-store since i hate waiting for it to come!