Caught Capital One's hand in my pocket

[Leonidas]

I've been a credit card "freeloader" for years now - paying off the total bill each month - and that's been working well. Several of the cards jacked up my interest rates during the Great Recession, but what did I care?

Capital One miffed me a bit last year after I finally responded to their non-stop begging to "upgrade" my rewards program. The rewards program sucked before the upgrade and still sucks after, but I seldom use the card so, again, I couldn't care less. But two months after I agreed to upgrade the rewards program (we are offering this because we want you to use your Capital One card more often) they jacked my interest rate. I called customer relations (note it's not customer service) at the time and asked them why I would even want to do business with them, much less use the card more, if that was how they were treating me. I got zip, and made a mental note to get around to canceling the stupid thing sometime in the near future.

I've got one recurring charge on the card, $30 a month to a charity that I support. It seemed like a pain to get the charity to change the billing so I let Capital One slide for a few months.

Well, now is the time baby. Sayonara you pirates, thieves and con men.

August was a busy month (last minute vacations and helping oldest son get set up in his first apartment at college) and I forgot to hit the send button on e-paying the Capital One bill when I should have. The result is that the payment was two days late and I incurred a late payment and a finance charge. Okay, I deserved that, my bad, but it won't happen again, and the next bill was paid early.

Now, today, I get another bill from the pirates and I discover there is yet again another finance charge. It's only $2.17, but still, that's not right.

"Michelle" in Mumbai is the representative I get on the line with and proceed to ask my pertinent question: Michelle, sweetie, WTF?

Michelle, in her best Mumbai accented English proceeds to try and baffle me with some Capital One Algebra on interest rate calculations, daily balances, and then she drops this jewel: "The agreement stipulates that you will be charged interest until you have paid the bill on time for two consecutive billing periods. I am pleased to tell you that this will be the last month for which you will be charged interest."

My question of "I owed Capital One $30 for two days and I pay interest for two months on a bogus balance of $90?" was met with yet more Capital One Algebra. So much for Michelle.

A trip to Capital One's website reveals no such terms in the agreement, nor does a careful examination of the full page of legalese on the back of the statement. I'm really feeling the need for an explanation, so I sent them a message asking if this was some kind of scam they were pulling.

It took ten minutes to receive this reply:

October 01, 2009 10:58 AM
Subject: Re: Account terms (fees, APR, etc.)
Message: Dear [LEONIDAS],

Thanks for contacting us about your Capital One account.

Good news! We’ve credited your account for $2.17 in finance charges.
You’ll see the credit on your next monthly statement.

If you have questions, please give us a call at 1-800-955-7070. Our
Customer Service Representatives are available 24 hours a day, 7 days a
week.

Thanks for choosing Capital One.

Sincerely,
Capital One Services, LLC

No explanation, no "We're going to waive the charge because of your long history with our company", no "Ooops, our bad", or "Michelle was smoking crack when she said that". Nothing but this lame ass email that sounds like "Damn, you caught us! Okay, here's your money back."

I'm going to take a great deal of pleasure in writing the letter that will accompany my cut up Visa card that's going back to this pack of thieves.

 

[samclem]

Thanks for the fun read--and good for you.

I wonder if the new "protections" in the recent legislation concerning CCs provided any penalties for incorrect charges by the CC companies. Seems like if they had to pay a 500% fine for these "mistakes" that they'd make them less often--and folks would probably review their statements closer looking for them.

I'm gonna have to do battle soon over "cancelling" a Mastercard I never wanted and never activated but was switched into when US Air cancelled their agreement with BofA/Visa. I don't want the new card on my credit report. Should be fun.

 

[FIREd]

Yes, I had the same nasty surprise 2 years ago. It's called "double billing cycle". I had never heard of it, but Capital One swore that "every credit card company used this billing method and they always had". NOT.

When I called Capital One up on it, at first they told me that I was some kinda fool who didn't understand the math behind finance charges. But when I was able to demonstrate that they had just charged me a 400% APY on a $38 charge under the classic finance charge system, they fessed up. Lying scumbags. They were totally unrepentent though, and their answer was "tough ****, you shouldn't keep a balance on your credit card anyway". So I did the only sensible thing. I paid off the balance and I have been playing Capital One's game ever since (do everything I can to keep the account open but never ever have to pay another cent to those thieves).

By the way I caught American Express doing the same thing. I dropped them too after banking with them for 10 years.

 

[walkinwood]

Wow!
You should send your note to a few newspapers and tv stations too. That's the only cost-effective way we have left to fight back against these crooks.

 

[Delawaredave5]

Great read. You are obviously very "financially conscious". Even then, understanding this is hard.

Can you imagine the other vast majority of the population that is "financially unconscious" ? They do not have a prayer of understanding this.

I know the economic world needs a banking industry for efficient and effective capital allocation -- but I think three quarters of the banking industry is supported by parasitic fees, credit policies, and mumbo jumbo.

We need Walmart to get into banking and take out all the cr_p in the system.

 

[samclem]

Surely there's got to be some creative way to be a PITA to companies like this?

Maybe leave the account open, never charge anything, pay (via paper bill and check) two cents every month. Be sure to turn on the paper bills so they have to send a statement every month Don't enclose the entire bill, maybe just a sticky note hooked onto the check and, in crayon "hear iz mor of the muney I owe, I will pay mor soon" and let them figure out which account to credit.

Yes, it costs a stamp and some time, but might be worth the satisfaction of throwing grit into the machine.

 

[LOL!]

I like CapOne. They have always done great things for me. The first week I got it, I took out a 0%-interest no-fee loan for the full credit line. Little did I know that my spouse also tried the new card out, so we were over the limit. I called and asked why they didn't deny my spouse's charge since it was over the limit? Anyways, they reimbursed me for all the extra charges even though I had a history of less than 7 days with the company.

A few years later, I forget why they put finance charges on my bill. I already knew that there would be finance charges on the unpaid finance charges the next month, so I asked Mr Ramachandran to make sure to reimburse me for those as well. He couldn't do it, but when I called back the next month, Ms Gupta was more than happy to reimburse those charges.

There is no reason to be intimidated by credit card companies. They are there to serve you.

 

[Texas Proud]

I got caught up in this at Chase... and started to use Capital One more...

From this article... it is history when the new rules come into effect...

Here is the definition...

Double Billing Cycle Finance Charges Revealed

How Creditors Charge Interest on Paid Balances

By LaToya Irby, About.com

One of the ways creditors compute finance charges is the double billing cycle method. This is one of the most costly ways your finance charge can be calculated.


How it Works

To calculate your finance charge, the creditor uses your average daily balance for the current and previous billing cycles.
Let’s assume you have a balance of $500 with an APR of 11.9%. If you make a $200 payment at the end of the month, using the average daily balance method, your finance charge would be calculated like this:
(Average Daily Balance * APR * Days In Billing Cycle) / Days In Year
$500 * .119 * 25 / 365 = $4.08

The double billing cycle, or two-cycle average daily balance, method of calculating finance charges will also consider your previous month’s balance. If your previous month’s starting balance was $1,000, your two-cycle average daily balance would be $750. Your finance charge under this method is:
(Two-Cycle Average Daily Balance * APR * Days In Billing Cycle) / Days In Year
$750 * .119 * 25 / 365 = $6.11

The Effect

If you only carry a balance sometimes, you pay much more in interest if your credit card uses the double billing cycle method of calculating finance charges. This way you pay more interest and take more time to pay off your balance.
Cardholders with revolving balances aren’t affected as much by the double billing cycle as long as their balance doesn’t significantly increase or decrease from one month to the next.
What You Can Do

To find out if your creditor uses the double billing cycle method, read the back of your credit card statement. Look for a section labeled “Finance Charges.” There you can read how your finance charge is calculated.
You may not be affected by the double billing cycle method if your credit card balance doesn’t change much from one month to the next. However, if your balance fluctuates significantly, you would be better served with a credit card that uses the average daily balance method.
If the double billing cycle method is costing you, pay off the balance and stop using or close the credit card.
After July 1, 2010, new credit card rules will go into effect prohibiting credit card issuers from using the double billing cycle method of calculating finance charges. (I changed color)...

 

[kyounge1956]

Life is too short to spend poring over credit card statements and then have the hassle of getting the wrong charges reimbursed. I refuse to put up with that garbage. You guys have made me glad all over again that I paid off my credit card many years ago and have never gotten another except to take advantage of a "new account" discount at Sears. I used it once to buy a stacking washer and dryer, then paid it off and closed the account.

Good riddance to all of them!

 

[W2R]

Life is too short to spend poring over credit card statements and then have the hassle of getting the wrong charges reimbursed. I refuse to put up with that garbage. You guys have made me glad all over again that I paid off my credit card many years ago and have never gotten another except to take advantage of a "new account" discount at Sears. I used it once to buy a stacking washer and dryer, then paid it off and closed the account.

Good riddance to all of them!

I couldn't agree more. Even though I am missing out on any rewards, somehow I just don't mind a bit. This is one simplification that has truly enhanced my quality of life. YMMV and for most others it obviously does.

 

[ERD50]

Life is too short to spend poring over credit card statements and then have the hassle of getting the wrong charges reimbursed. I refuse to put up with that garbage.

Let's not forget that this was all started by not paying the bill on time. I agree that the double charges are insane, but if you pay your bill on time you won't be exposed to these shenanigans.

I'm set up with an auto payment larger than my typical bill. I go in and edit it before the due date, but if I forget, no big deal. Really no effort at all, and I've received THOUSANDS of dollars in rewards over the years, and never paid a fee. Wish I could find more 'garbage' like that.

-ERD50

 

[REWahoo]

YMMV and for most others it obviously does.

Yep. Through September I have received just over $300 in cash from my PenFed CC. No fees, no interest (auto pay the balance in full each month) and very convenient.

Lets see, 10 minutes per month to review the CC statement = $33 per month in cash. That works out to about $200 per hour for my time. To me it is definitely worth it.

 

[hankster]

Dave Ramsey calls the CC companies "snakes". I believe this is an insult to the scaly, slithering creatures that inhabit our world. Perhaps "vermin" is more appropriate.

We have one CC with Bank of America, and we also "freeload" which seems to annoy them to no end. They send statements with sudden changes in the due date. I guess they hope we're not paying attention to the bills. Wrong!

In August, they sent no statement. I called the toll free number and confirmed the pay off balance. I believe they were hoping to trip us up and set up the double cycle interest charges. I'm so distrustful of them that I will only make the payment at a local branch several weeks before the due date. This gives me a dated payment receipt in hand. I usually pay in cash. No one is going to conveniently "lose or misplace" a mailed payment. I prefer not to do online payments to them.

If it were not for a few advantages the CC has over the debit card for some purchases, we would wash our hands of all of the *!@#?%*

 

[W2R]

YMMV and for most others it obviously does.

Yep. Through September I have received just over $300 in cash from my PenFed CC. No fees, no interest (auto pay the balance in full each month) and very convenient.

Lets see, 10 minutes per month to review the CC statement = $33 per month in cash. That works out to about $200 per hour for my time. To me it is definitely worth it.

In a forum where something like 95% (? I forgot but it was a huge majority) of members have and use a credit card (representing a huge, population-wide victory by Madison Avenue, IMO) it is unlikely that much of anyone would be interested in the advantages of not having one.

However I have also noticed certain people on the board (not you, REWahoo) are vocally, and loudly IMO, incredulous when others say they live/lived on less than $20K/year. That is a lot of money. I think that simplification is tremendously helpful in lowering one's expenses. I think that the more you spend, the more cash you get back from your CC. I think that Pavlov was a pretty smart guy.

 

[ERD50]

In a forum where something like 95% (? I forgot but it was a huge majority) of members have and use a credit card (representing a huge, population-wide victory by Madison Avenue, IMO) ...

How is that a victory for Madison Avenue?

I use a credit card, but NOT because some ad agency made some enticing advert. I use it because I get rewards $, I get float, I get convenience. Those are solid, logical, financial sound reasons, not some Madison Avenue seduction. If I have some unexpected spending, the float allows me some time to choose the best place to draw those funds from, or where to replenish the emergency fund from.

I think that the more you spend, the more cash you get back from your CC. I think that Pavlov was a pretty smart guy.

I don't spend a penny more because of a credit card. I buy what I decide to buy, regardless of the payment method. The rewards $ are a bonus, not a "reason". That may be true for some, but if you want to refer to most of the members of this forum, I think you'd find that to also be the majority view.

You seem to be stretching for rationalizations for your personal choices. Whether I spend $20K/year or $200K/year, I would choose to get 1% or more back on every purchase I can make with a CC. It makes a lot of sense. Personally, I'm surprised that any LBYM person would willingly give up a 1% sale on just about everything. But to each their own.

edit - missed this one:

it is unlikely that much of anyone would be interested in the advantages of not having one.

Actually, I am very interested in hearing this. I know you have said you just don't want one (fine), but I don't recall what the advantages were and how they would apply to others. Please enlighten.

-ERD50

 

[Texas Proud]

Actually, I am very interested in hearing this. I know you have said you just don't want one (fine), but I don't recall what the advantages were and how they would apply to others. Please enlighten.

-ERD50

I agree with your post... and I get 5% back on gas, food and drugs... and 1.25% on everything else.... so we are talking about some good money here...

But to your last sentence... and I do not think this applies to you (or me), but they have done studies that people who have a CC spend more money than if they did not have a CC... it seems the vast majority of the people do not see how much something really costs when they can swipe the card... but when they have to count out the green... it hurts... (I would put my wife in that group... but really, I think she just likes to buy stuff and maybe it would not matter)...

 

[REWahoo]

I think that simplification is tremendously helpful in lowering one's expenses. I think that the more you spend, the more cash you get back from your CC. I think that Pavlov was a pretty smart guy.

No arguement here. A credit card in the wrong hands is almost as dangerous as a loaded gun.

However, for those of us who spend carefully and who understand that a plastic dollar is the same as a paper dollar which is the same as an electronic dollar, CC cash back programs offer real benefits with very little risk.

 

[ERD50]

I agree with your post... and I get 5% back on gas, food and drugs... and 1.25% on everything else.... so we are talking about some good money here...

But to your last sentence... and I do not think this applies to you (or me), but they have done studies that people who have a CC spend more money than if they did not have a CC... it seems the vast majority of the people do not see how much something really costs when they can swipe the card... but when they have to count out the green... it hurts... (I would put my wife in that group... but really, I think she just likes to buy stuff and maybe it would not matter)...

Agreed, many people misuse CCs. But W2R's post was specific to the people on this forum, and she said they would not be interested in hearing of the advantages of not owning a CC. I'm all ears.

I also suspect that those who misuse CCs would just find another thing to misuse if CCs were not available to them (payday loans, loan sharks, HELOCs, even lay-away is just giving away free use of your money). A CC is just a tool, and tools are used or misused. Just like woodworking, the end product usually reflects the skill of the tool user, not the tool itself.

-ERD50

 

[W2R]

No arguement here. A credit card in the wrong hands is almost as dangerous as a loaded gun.

However, for those of us who spend carefully and who understand that a plastic dollar is the same as a paper dollar which is the same as an electronic dollar, CC cash back programs offer real benefits with very little risk.

Just as long as those using them are aware of what they are exposing themselves to, and are completely happy with the outcome and their own LBYM and peace of mind.

 

[REWahoo]

Just as long as those using them are aware of what they are exposing themselves to...

Ya mean like what those of us who post on internet forums are exposing themselves to?

 

[ERD50]

Just as long as those using them are aware of what they are exposing themselves to,...

Such as? Again, kept in context of those who pay their bills in full and on time, which is very easy to do with on-line banking.

-ERD50

 

[W2R]

Ya mean like what those of us who post on internet forums are exposing themselves to?

Yeah, well there is that, REWahoo....

REWahoo, I meant that they are exposing themselves to constant positive reinforcement for spending that they probably don't think about much. If someone thinks that LBYM to the extent reported by Khan, Shawn, or Aaron is something they could not possibly do (for any one of a number of reasons or excuses), and if they use a credit card a lot, then I think they might benefit by thinking about what/who they are exposing themselves to. Sometimes these are SO predictable.

 

[ERD50]

Yeah, well there is that....

I meant that they are exposing themselves to constant positive reinforcement for spending that they probably don't think about much.

Sorry, but I'm far to logical for that kind of thinking. No way would I look at something and think " Geez, that thing is $100, but I don't really need it, but heck, I'm gonna get $1 back in rewards, so I'm gonna go for it!". Nuh-uh.

If someone thinks that LBYM to the extent reported by Khan, Shawn, or Aaron is something they could not possibly do (for any one of a number of reasons or excuses), and if they use a credit card a lot, then I think they might benefit by thinking about what/who they are exposing themselves to. Sometimes these are SO predictable.

IIRC, one of those people sat through sweltering heat rather than turn on the AC. Hey, if that's OK with them that's fine. But each of us have different needs/wants. I think it is a real stretch to say that is influenced by responsible CC usage.

It seems the opposite is true. As I said, if you spend $20K/year, and you could put half of it on a 1% CC, that would be $100 each year. You could buy a nice something with that, or give it to charity. Why not?

You lost me with the "predictable" comment.

-ERD50

 

[kyounge1956]

(snip)You seem to be stretching for rationalizations for your personal choices. Whether I spend $20K/year or $200K/year, I would choose to get 1% or more back on every purchase I can make with a CC. It makes a lot of sense. Personally, I'm surprised that any LBYM person would willingly give up a 1% sale on just about everything. But to each their own.

edit - missed this one:


Actually, I am very interested in hearing this. I know you have said you just don't want one (fine), but I don't recall what the advantages were and how they would apply to others. Please enlighten.

-ERD50

I would put the benefits under two general headings: eliminating unnecessary sources of aggravation, and avoiding doing business with people, or businesses, I don't trust. We probably each vary in the amount of money we think is an adequate recompense for a given quantity of aggravation. I happen to have a low tolerance for aggravation, and a pretty high tolerance for doing without money that's not actually necessary for immediate needs. I used to be in a supervisory position at my job. I was miserable at it, in every sense of the word. Eventually, I had the opportunity to make a transfer to a non-supervisory position, which involved a pay cut of (IIRC) 20%, but it might have been closer to 25%. I consider taking that transfer and the accompanying pay cut to be one of the smarter things I've done in my life, and I have definitely been happier afterward than I was before. If eliminating aggravation is worth knocking 20% off the top of my only source of income, it's certainly worth more than the piddling one or two or five percent I'd get back on the lesser amount I might charge on a credit card.

That's heading number one. As for heading number two, I have mistrusted credit card companies ever since the bad old early 80's when I was making barely enough to live on, and getting credit card offers in the mail one after the other. At the time I only thought "anybody who would loan money to someone as broke as I am right now must be out of their ever-lovin' mind!" Having heard somewhat more about the credit card industry since those days, I now suspect they were crazy like a fox, looking for someone who wouldn't be able to pay in full every month, or even better, would only be able to make the minimum payments. Why would I want anything to do with businesses that profit by targeting the vulnerable, and benefit when their customers get in debt over their heads? I've heard it said that tobacco products etc are the only thing it's legal to sell that harms the consumer when used as intended by the seller, but I think credit cards deserve at least a nomination to that hall of shame. I have no desire to do any business at all with companies that, if this thread is any indication, have no qualms about overcharging, sneaking extra amounts onto the bill, changing the payment due date, generally fleecing their customers any way they think they can get away with and then lying about it afterwards; I don't want "rewards" that come out of the profits they make by use of such practices; and I don't believe in knowingly dealing with dishonest businesses. They don't deserve the favor of my custom, or anyone else's either. If every episode of the sort of shady business practices described in this thread was followed by a mass exodus of customers, the companies that use them would either clean up their act or have to shut down. Whichever it was, we'd all be better off as a result.

 

[Maurice]

... it is unlikely that much of anyone would be interested in the advantages of not having one.

I'm interested.

Not having a credit card would make travel quite difficult and renting a car nearly impossible.