Today’s Voodoo Hex of the Moment goes out to Capital One Financial on behalf of the honest, hard-working card holders out there being flogged by rising interest rates on their Capital One credit card’s annual percentage rates (APR) for no other reason than an apparent bail out over their failed mortgage unit on the backs of their lowest risk customers.
If you are considering carrying a Capital One credit card, please read this story and do a little research before making a decision to apply. You'll thank me later.
So, yesterday my wife calls and she is absolutely furious. She rarely gets so pissed off that she can hardly put a few words together and form coherent thoughts, but yesterday my unflappable wife was "en fuego."
Understand that my wife’s part in the following conversation must be read in the context of anger and frustration. My part should be read with mild and soothing tones- the kind of voice you might use while trying to calm a pack of rabid dogs that have you backed into a corner:
She called, I answered the phone.
Wife: She blurted out, “Those rotten bastards!”
El Scott: “What’s wrong, Honey?”
Wife: “Those assholes!”
El Scott: “Who?”
Wife: “Capital One.”
El Scott: “What’s wrong with Capital One, Darlin’?”
Wife: “They jacked my credit card interest rate to 19.9%!”
El Scott: “Huh? Why did they do that? Did you miss a payment?”
Wife: “Scott. I haven’t missed a payment in over a decade.”
El Scott: “Then why…”
Wife: “They just did and offered no explanation other than to say interest rates are rising and this is a company wide move. They’re raising interest rates on everyone.”
El Scott: “Did you call them and ask for a lower rate?”
Wife: “That’s why I am so furious! They didn’t give a rat’s ass about me, they wouldn’t let me speak to a supervisor, refused to take into account that I have been a customer for over 15 years, never missed a payment, never been over my limit and they simply acted like they don’t care. There is NOTHING I can do, their decision has been made.”
El Scott: “Wow, I’m really sorry to hear that.”
Wife: “You just don’t understand. You’d be really pissed off too and be blogging about it before you even got off of the phone with those bastards. You’d unleash voodoo hexes and call the CEO of Capital One Financial (Rich D. Fairbank) at home tomorrow morning at 6 a.m. What am I going to do?”
“I have been a customer of theirs for probably 15 years and THEY DON’T CARE. The customer service rep said that I could close my account with them if I did not like the new rate. I asked her how it was even possible for a rate to go up 10% without any derogatory credit history… how that was remotely in-line with the rising interest rates. Bad Credit repair can help you better your financial future.She had no answer except to say something to the effect that it was happening across the board to all Capital One card holders and that there was nothing to be done about it.”
“It pisses me off that I can work hard and have an almost perfect credit score (we take our credit scores very seriously) and be a loyal customer for almost 15 years then they would just shit on me like this. This was my first credit card!”
El Scott: “Are you carrying a balance with them?”
Wife: “Maybe a hundred dollars. I’m gonna close my account! “F” those people they’ll get what they deserve in the end when their customers start cutting up their credit cards.”
El Scott: “I just can’t believe that they are doing that after this huge advertising splurge with the “What’s in your wallet?” campaign. I wonder if any of this has to do with the fact that the Capital One Mortgage division is being shuttered and they’re having to sac a bunch of employees.”
Wife: “Serves them right; they were probably predatory lenders writing subprime mortgages for people who bought way more house than they could afford. But why the hell should their bad decisions and a bunch of people defaulting on Capital One home loans have to affect me and my credit card APR? That’s bullshit. Once again I am having to “feed the dolphins” (I’ll explain the euphemism later) and taking it in the ass to subsidize the rest of these morons.”
El Scott: “Sooooo, are we going to the Yacht Club tonight?”
Wife: “I told you that you wouldn’t understand.”
Click. She hung up.
Please understand, my wife is a genteel Southern woman and a consummate business professional who would prefer to use “Bless their heart.” rather than “Those Assholes!” so you can kind of get an idea of the fury she was in over being dumped on by “C1.”
The reality here is that my wife rarely carries a balance on her credit card; while she is a low risk customer, she is not a valuable customer. Credit card companies earn income off of the interest rates they are charging and they are making almost nothing on my wife’s account. Since there are real costs associated with servicing and maintaining the account, paper billing, administration, customer service calls, postage, etc., they are probably losing money on my wife and hundreds of thousands of their other lowest risk customers. Raising the APR on these customers, then taking an indifferent attitude towards the resulting account closures is probably a good financial move, though no one really wants to hear that when we all expect to be treated like royalty after years of loyalty and being a “good customer.”
This is where I lose all respect for Capital One.
If this is their strategy (“put up or shut up,” really) then why don’t they have the balls to just come out and close unprofitable accounts altogether like Sprint Wireless did a few months ago and then admit it?
I have more respect for those companies that make fiscally correct, but immensely unpopular, decisions and say, “Yeah, so what?” than those that hide behind a clearly thin and implausible pretext being espoused by customer service reps reading from a script.
The truth may be that they cannot close these accounts because they would be adversely affecting the credit ratings of its ex-customers; length of account history is a very important factor in the algorithm used to compute credit scores. I know that if Capital One closed my wife’s account without cause and her credit rating was negatively affected as a result that there would be hell to pay.
What if it happened to a hundred thousand customers?
Can you say Class Action lawsuit?
Things are not going to go well here in any event; for a taste of the general disgust of many many many other Capital One Credit Card customers out there who find themselves in the same situation all you need to do is Google “capital one credit cards raising rates” and you will definitely get an eye-full.
It is for them that I curse Capital One with this Voodoo hex, but most especially I hex them for my wife:
Voodoo on you Capital One Financial, Voodoo on you Rich Fairbank and Voodoo on you too Capital One Board of Directors for plying bait and switch games with your “fixed rates;” for raising my wife’s 9.9% fixed interest rate to a variable rate of 19.9% with no regard to her 15 years of loyalty and stellar credit rating and lastly, for hiding behind the pretext of “nationally rising interest rates.”
Voodoo, VooDOO, VOODOOOO!
I am going to throwing in an extra heaping of Voodoo on you for insulating yourselves from your genuinely upset (and vocal) customers by putting those poor customer service representatives in the line of fire. They honestly do not get paid enough to have to endure the abuse that you are bringing upon them. You all should get in touch with your customer’s growing resentment and answer the phones personally; perhaps you would rethink your current APR debacle if you couldn’t hide behind those poor souls.
VOODOO!
I hexpect that corporate greed will be laid bare when the Fed lowers interest rates and Capital One does not follow.
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