YAY Capital One!!!!

“Good News: Because of your on-time payment history, some or all of your Annual Percentage Rates (APRs) have been returned to your Non-Introductory Rate.” (23.5% down to 14.8%)

Someone finally gets it! If you raise your interest rates and fees on your good customers in bad economic times, you will lose them. You will then put yourself at risk by not being able to cover the high defaults by your current customers with reasonable fees from your loyal customers. What the credit industry has tried to do to good consumers lately has been nothing short of irresponsible and the worst business decision ever.

How? First for those good customers who have had their rates jacked to almost 30%, credit limits reduced and fees increased for absolutely no reason other than they can, the strategy is simple. Pay off the balance and close the account. Protest the unfair practices that have become commonplace in this faltering economy of massive default buy paying off these banks and dropping them. Second, if you have to have a credit card, and in order to maximize your credit scores you need at least two, go to the companies that will reward responsible behavior. As you can see Capital One has. Go to your local Credit Unions who have not yet jacked any fees or interest rates. Ditch companies like Chase, Bank of America, and Discover who have generated countless horror stories from good consumers. Get rid of anyone who messes with your interest rate, your credit limit and your fees. Soon these companies will be facing the massive default debt with little income from legitimate fees to counteract the losses. Then and only then will the consumer be back in the drivers seat with their own credit and those who want to remain in business will stop messing with the consumer.

The above reduction in rates actually happened this evening. A client was previously told by Capital One that a review of their account would take place on the July statement, and verified with their customer service rep that indeed their interest rate did drop from the default rate (they missed a payment June 2008 by one day) of 23.5% to the new interest rate of 14.8% for the next billing cycle. The new statement verified it also. So there you have it. Capital One is true to its word and at least in this case was a responsible company to work with. My client was also assured that the next review, if my client kept the account in good standing, the company might raise the credit available, eliminate yearly membership fees and allow balance transfer specials. Now whether these offers are good for a consumer to take is a debate for another time but here is a situation where the opposite to the credit card company trend of squeezing the consumer actually happened and has the opportunity to happen for other responsible consumers.

This does not suggest that you run out and try to qualify for an account with Capital One. Credit is still very tight. But for those of you with Capital One cards, call them and ask them what they can and will do for you. Let's make a statement to the likes of Chase, Bank of American and countless others that we won't be at their mercy by taking our credit business elsewhere. We don't have to settle for less.