Sunday, February 14, 2010

My Capital Rewards

I’ve been on a mission to get clean: paid off my overdraft protection last year and just last month paid off both credit cards. It felt great. And Capital One even granted a reward!

To itself.

On the next statement following the $0 balance they raised my interest rate by 8%. They thought they’d squeeze me a little before Feb. 22 when the new law goes into effect. I called to cancel. The customer service rep asked me why. I explained. She sighed: big breath exhalation. I’m guessing her sigh meant she had heard customers tell the same tale more than once already today.

Meanwhile, Capital One seems to be on a mission of its own—to discover whether there really is a need for small business loans. I don’t mean the kind where you take your hat in hand and sit down with a banker to go over your balance sheet and pay an interest rate a few points above the bank’s cost. I’m talking about the modern kind where they intice your small business to sign up for a credit card to get by and hopefully you fall behind on payments.

Last month I got three promos for such a card in one day, all addressed to a business name I haven’t used for 15 years.  They’re wasting a lot of marketing funds on dumb mailings like that. Wonder how they’re working out. It probably works with desperate little businesses.

Soon all they will have left is desperate business customers to go along with their desperate consumer customers. That doesn’t bode well for anybody, not even Captial One and its investors, not in the long term.

Ask your members of congress where they stand on the proposed Consumer Financial Protection Agency.