Capital One Changing Interest Rate DRASTICALLY.

HughG wrote: ↑Ive had a Capital One MasterCard ever since they came to Canada a while back.

Ive been one of those lucky people who enjoyed Prime +0.9% interest and always been prompt with my payments.

I just got a letter in the mail saying starting this June, they are changing my terms of agreement and interest rate is going to be prime +7.14 which is essentially 10%.

Now I know 10% isn't all that bad but still.

Are they allowed to change the rate just like that ? Aren't there any rules and regulations.

If I don't accept they said basically I will have to pay the balance at the current rate until paid off and they will close my account. (Which im sure will hurt my credit if I close since this has been my primary card past 10 years or so, or does it ? )

Any advice from you wise people will be appreciated.


I do have a good credit over 820 as well if that helps with the advice.

Damn, I have a CapOne World Aspire MC and I get charged 19.80%... although I dont carry a balance but still, would be nice to have access to such a low interest rate on a CC.

HughG wrote: ↑Ive had a Capital One MasterCard ever since they came to Canada a while back.

Ive been one of those lucky people who enjoyed Prime +0.9% interest and always been prompt with my payments.

I just got a letter in the mail saying starting this June, they are changing my terms of agreement and interest rate is going to be prime +7.14 which is essentially 10%.

Now I know 10% isn't all that bad but still.

Are they allowed to change the rate just like that ? Aren't there any rules and regulations.

If I don't accept they said basically I will have to pay the balance at the current rate until paid off and they will close my account. (Which im sure will hurt my credit if I close since this has been my primary card past 10 years or so, or does it ? )

Any advice from you wise people will be appreciated.


I do have a good credit over 820 as well if that helps with the advice.

They can change the interest rate they charge on a revolving credit product at any time.

Same thing applies to a bank Line of Credit. The pricing is made up of a Base Rate, which includes Prime and a Percentage Rate set by the bank. The bank can change the Percentage Rate at any time; ergo, they can charge you whatever they want.

HughG wrote: ↑Ive had a Capital One MasterCard ever since they came to Canada a while back.

Ive been one of those lucky people who enjoyed Prime +0.9% interest and always been prompt with my payments.

I just got a letter in the mail saying starting this June, they are changing my terms of agreement and interest rate is going to be prime +7.14 which is essentially 10%.

Now I know 10% isn't all that bad but still.

Are they allowed to change the rate just like that ? Aren't there any rules and regulations.

If I don't accept they said basically I will have to pay the balance at the current rate until paid off and they will close my account. (Which im sure will hurt my credit if I close since this has been my primary card past 10 years or so, or does it ? )

Any advice from you wise people will be appreciated.


I do have a good credit over 820 as well if that helps with the advice.

Damn, I also have that same credit card. I transferred my remaining car loan 7K last fall from Scotia bank (5.65%) to this card thinking that I'll save on the interest. And I did save money on interest so far but now if Capital One is sending this letter to everyone, then I'm screwed! I've never missed a payment with any credit card for that matter. This really sucks.

Cerium398 wrote: ↑They can change the interest rate they charge on a revolving credit product at any time.

Same thing applies to a bank Line of Credit. The pricing is made up of a Base Rate, which includes Prime and a Percentage Rate set by the bank. The bank can change the Percentage Rate at any time; ergo, they can charge you whatever they want.

Just sucks cause its not like I have been late or anything like that and for them to change it all of a sudden is a pissoff after 10 years. I know 10% no fee credit card is still good but still.
Do you think its open to negotiations or it is what it is ?

Thanks again

HughG wrote: ↑Just sucks cause its not like I have been late or anything like that and for them to change it all of a sudden is a pissoff after 10 years. I know 10% no fee credit card is still good but still.
Do you think its open to negotiations or it is what it is ?

Thanks again

I couldn't say; you can always call and ask. But if the phone agents at Capital One can't increase your credit limit, I highly doubt they can do anything about the interest rate either.

Start by reading your card member agreement where you'll find that rates are subject to change, given they provide you with a notice, who has they have.

On the bright side, at least it's not 20%+

That's pretty low of Cap1. Get you to have a balance and then do that kind of rate increase.

If you can pay your balance, do that. If not, don't accept the change and continue to pay at the lower rate. Who cares if they cancel the card at the end. Your score won't be hurt that much. The credit history is still there, doesn't disappear just because the card is canceled.

Definitely do not start paying 10% on the balance.

Got the same letter. I will keep the prime + 0.9 and pay off my balance. Sad it's ending

don242 wrote: ↑That's pretty low of Cap1.

Low but not surprising. They seem to be cleaning house a lot lately, one card at a time. I wonder what this is a sign of.....

cap1 is the best as long as I have their 1.5percent no-fee Cashback card

The best advice for these kinds of things is to sign up early and enjoy the ride as long as it lasts, always being aware of any changes but not complaining when it finally ends. Any sense of "unfairness" was addressed in the agreement you clicked on and probably didn't read when you signed up for it. It's just unfortunate you signed up just as the beer ran out and the lights are being turned off.

Time after time alot of these programs are introduced and are great at the beginning and then after word gets around (a la RFD) and people start figuring out the loopholes and start doing things that were probably never anticipated by the the original bean counters. They then do the math when they suddenly see that things aren't working out as was expected and so they pare it down or eliminate it altogether.

Just have to adapt and move on to the next new thing as customer loyalty nowadays is basically non-existent and big businesses don't care if you leave as there is always another customer who will take your place when they start the cycle again with something new.

The agreement, as stated above, would have said that the rates can change "at any time". Is it fair? No. But you signed off on it. (Because every company does this, avoiding this isn't really possible.)

I don't get some of these complaints though. Do most people actually get charged finance charges on their credit card? I've got two, one with just an email alert, and the other with a PAD for my debit card so unless I hit some kind of emergency I will always be able to pay my bill before the due date.

yupkime wrote: ↑customer loyalty nowadays is basically non-existent and big businesses don't care if you leave as there is always another customer who will take your place when they start the cycle again with something new.

This is very true. Not just with Capital One, but most credit card issuers.

Cerium398 wrote: ↑They can change the interest rate they charge on a revolving credit product at any time.

Same thing applies to a bank Line of Credit. The pricing is made up of a Base Rate, which includes Prime and a Percentage Rate set by the bank. The bank can change the Percentage Rate at any time; ergo, they can charge you whatever they want.

Can they? Then what's stopping a bank from giving out HELOC at 0% and then charge 10% a month later? It would cost the home owner a lot to move banks. Or does this only apply to unsecured LOCs?

rj2wells wrote: ↑Worst advice ever. He can't refuse to accept the rate change. If he stops paying it will DESTROY his credit.

Go back and read the op's options before you claim my advice is bad. He can refuse the change and continue to pay at the current rate but when it is paid off they will cancel the card.

Archanfel wrote: ↑Can they? Then what's stopping a bank from giving out HELOC at 0% and then charge 10% a month later? It would cost the home owner a lot to move banks. Or does this only apply to unsecured LOCs?

I know some HELOCs are fixed rate. I'm not sure if that means the rate will never change, but I sure hope so. Anyone care to share your agreements? (With personal info removed, of course.) I don't have a HELOC, but I do know my credit card and TFSA rates are not set in stone and can be changed with little notice.

The example is a little over-the-top. A 0% HELOC is too good to be true. It's essentially money that never needs to be paid back, since there's no penalty for not doing so. However, I suspect a person carrying a balance could be caught off guard by a sudden rate increase that they can't match. I would hope the company should give notice a month ahead of time, but there's probably nothing forcing them to do that.

The OP was talking about a credit card though. Unless there's an emergency you never need to pay a penny of interest. I got a credit card last year that gave me the option of a fee and lower interest, or higher interest and no fee. I chose the latter since I know I will never pay a fee (barring an emergency).

End of an era. I remember picking this card up in 2008(?) as part of a BzzCampaign. I recall there were somewhat strict requirements at the time.

Prime + 7% is still a good deal for a no-fee card, but Prime + 0.9% was crazy good for those who enjoy a little arbitrage.

Unsecured loans and most, if not all credit cards are subject to rate creep. This is a known policy of most lending institutions. I had a unsecured LOC
at the TD bank at "their" prime + 2.5% and at that time the rate total was 5.5% I had a 5k balance that I paid faithfully every month and never less
than the minimum payment. I have a 780 FICO score and yet 2 years after I received my LOC they hiked the rate up to "their" prime + 5.5%. Never
missed a payment on the account. I called them and asked them why did they raise my rate. Their answer was that too many others were not paying
their debts and like car insurance everyone has to contribute. I guess my rate was increased to help cover their losses on others. I had the cash so I
paid off the balance, sent them in my agreement and told them not to contact me again. By the way, I am a senior collecting both pensions plus my
Ontario Hydro pension which is a DB pension after 35 years of employment, so TD really has no basis to penalize me except to fund their bad debts.
I received another offer from them for an unsecured LOC several weeks ago with the same terms of "their" prime + 2.5 I told them to hit the road.
Summing up what I know about most again if not all financial institutions is that "RATE CREEP" is a way of life with them. Be Careful.

quanta wrote: ↑End of an era. I remember picking this card up in 2008(?) as part of a BzzCampaign. I recall there were somewhat strict requirements at the time.

Prime + 7% is still a good deal for a no-fee card, but Prime + 0.9% was crazy good for those who enjoy a little arbitrage.

hm.. it's the only reason I kept the card... Hadn't used it for over a year or two now. I was keeping it for "emergency" and it's my oldest card..