Tuesday, July 11, 2006

Capital One: No Hassle ... And No Limit Reporting



One of the credit cards I used to carry regularly was a Capital One card. I still have the account, but rarely use it, since several other cards are perfectly willing to rebate me anywhere from 1 to 5 percent of my purchases. Capital One, stingy kids that they are, hasn't seen fit to launch a decent cash rewards card. Maybe they're spending too much money on barbarian commercials? I dunno.

Anyhow, until today, I was unaware that Capital One was one of the few card companies who do not report credit limits to the credit bureaus. And since a hefty chunk of your credit score is based upon "utilization" — that'd be your total balances taken as a percentage of your available credit limits — this has the potential to sway the FICO scores of some people a fair bit. (Young folks and credit-world newcomers would be most susceptible to this.)

In lieu of credit limits, the "No Hassle" crowd chooses to report your Highest Balance carried on the card. So, for example, if your Capital One credit limit were $5,000, but the highest balance you'd ever reached was $1,000, then a current balance of $700 gives you a 70 percent utilization ratio — rather than the 14 percent utilization it would normally be. In the world of credit scoring, that 70-percent mark is too high. And your score will suffer.

Just some plastic food for thought. The previous information was brought to my attention by an article in the August 2006 issue of Kiplinger's Personal Finance magazine, as well as this 2004 article from the Washington Post.

— Posted by Michael @ 11:10 PM








3 Comments:
 

Capital One is ONE, but who else lurks?

I have read this too and I' m weary about this; I currently have a U.S. Bank card and ALMOST signed up for a Capital One Flight Miles card, but strayed once I read the Washington Post article; I have googled for over an hour now, but with no luck; Are there any other credit card/lending companies that do this? I will be in the market for my first home in about 1 year or so and it would be helpful to know who I should stay away from because of the sneaky tactic; Please, if anyone knows of anything post a link or reference.

Thanks

Anonymous Anonymous
, at 9:08 PM, July 18, 2006  
 

"Capital One" Nothing but HUGE B.S. HASSLE to redeem your so-called "free flight"!

After collecting 32,000 "points" and believing that one would get one "free flight" on the west coast...and have "no hassle and no blackout dates" etc, etc, etc.......this company is nothing but full of bald face, 100% pure, B.S.!

FIRST ATTEMPT to redeem points: Called 11/12/06 for a flight from Washington state to S. California from my airport in eastern Washington state. "Mr. Moore the lowest fare is $658.00 and you will have to pay everything above $320."

My response: $#%^^&%%$#@!^**(!!!!!

"Mr Moore, if you want to redeem these points for the amount of credit you have we will need a 21 day notice."

My response: ^&&%%$#@88%$!!!!!

SECOND ATTEMPT to redeem points: calling back on 11/12/06 for a trip from my airport to S. California on Dec. 7th to Dec 11th (21 day notice and not blackout dates which they say are no problem in all their advertising).

"Mr. Moore, I have checked all flights and the total cost will be $485.00 and you will need to pay the balance over $320.00."

My response: "In all your 'NO HASSLE' advertising I was led to believe that I would earn a free flight on the west coast after I had put $25,000 through your card. Now you tell me that somewhere in the small print it really does not 'reward' me with a free 'no hassel' airline ticket without me paying considerably extra for the flight? This is total CapitalOne fraud, lies and 100% hassle!!!!!!"

ALL capitalOne ADVERTISING leads one to believe that after earning 25,000 points there will be a 'no hassle ticket' issued...and 'blackout dates' are 'no problem'!!!!

Well, huge piles of sticky B. S. on you and the horse you rode in on and everyone that works for you including the one who cleans out your toilet bowls!!!!!!!!

In my opinion, this is nothing but consumer fraud!!!

Pox on you...CapitalOne!

 

I'm not saying i disagree with the amount of B.S. that is (cause that still is B.S.).. but had the trip been planned 6-months prior it might have been completely free..

also some thoughts... if you get a $5000 limit, and at some point have the money for a major purchase (say $3000 for a computer), you use your card, pay it off in full at next statement.. doesnt that A) look incredibaly good? (or atleast "good"?) and B) doesnt that mean that from then on your max amount is $3000, and if you then always keep it below $1000 your golden?

I have absolutely no credit.. I'm trying to work a plan to build credit fast and easy.. i got a few no-credit low-limit cards and will have plenty $ to pay in full always..

anyways, glad I read this - I dont expect them to approve a big amount - but I will use this information to my advantage.. some how..

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