Capital One credit card???

[Sparse]

Simply incorrect, quite possibly old information.

I just finished buying a new home, I have a Capital One mileage card. The high limit is on all 3 credit bureaus, as well as my current balance.

Incorrect.

Capital One charges a yearly fee on every single one of their cards, anywhere from $45 to $75, depending on which card you have. You have every reason to cancel it, and a certified mail with return receipt with a threat to sue for non-compliance usually does the trick (I've had 3 Capital One cards, they all closed with no issues).

That's not accurate either. Closing one credit card that has a perfect payment history will not have any effect on your credit score. Actually, quite the opposite.

At a certain point, if you have too many open cards with zero balance, it will start to count AGAINST you. The reason is the lender will be concerned that if they give you a large loan, like a house, that puts you right up to 50% D/I (Debt - to - Income ratio), you might later, after the loan is inked, charge up all your credit cards and put yourself into a position where you might not be able to make all your payments.

Conversely, the practice of getting a credit card, charging it to about 20% of its limit then paying it down to under 10% for about 6 months, then closing it and opening another one actually IMPROVES your score.

Closed credit accounts with a perfect payment history always increase your score and is one of the "tricks" for improving your credit.

One caveat: if you closed your card account without any other credit cards open on your file, your credit history may suffer, as you have to "have" credit to get credit. Most of the time your best score will come when you have one credit card and are only carrying 10% or less of the credit limit as a balance, a car loan, and a home loan, all with perfect payment history.

I've seen a person 2 years out of bankruptcy with a 750 score because they followed "the formula" for improving their credit; it's very easy, not rocket science at all. Takes about 6 months to a year to go from mid 500's to mid- to high 700's.

The guy asked for advice. What I have read and heard is Capital One is not a good choice. Maybe they have changed their ways but I would not have one.
I have read from more than one source that cancelling a credit card has a negative effect. I can't prove it because I have not cancelled one. The best thing anyone can do when it comes to credit cards is to use them for conveniance and pay them off every month.

 

[Lear70]

The guy asked for advice. What I have read and heard is Capital One is not a good choice. Maybe they have changed their ways but I would not have one.

Different strokes and all... I'd love to get one of the Citibank mileage cards, my friends pay for EVERYTHING with theirs and it pays for a vacation every single year.

Haven't been able to qualify for one yet, took a big hit after I was furloughed post-9/11 and it's still on my credit file (several late payments). They require a 780 or better FICO score, mine never gets much above 760 or so.

The best thing anyone can do when it comes to credit cards is to use them for conveniance and pay them off every month.

That's just about the God's honest truth. Carry a VERY small balance (pay it off and immediately put $20 bucks back on it) is what I've heard over and over again from mortgage brokers (I'm getting more and more into real estate every year).

 

[AZ Typed]

Switched to a Fidelity 529 Savings card with AMEX - 1.5% into the kid's 529 per year. So far so good.

AZT

 

[Economy101]

Let me set the record straight about Capital One. I actually used to work there in the Retention Department (it's where you'd be transfered if you wanted to close your account.)

Yes it is true that Capital One does not report your credit limit to the credit bureaus. This can be viewed a couple of different ways:

Credit scoring companies can view this as a negative because they will assume that you are using all of your available credit. If your other cards that your carry tend to not revolve balances then credit scoring companies could assume that your capital one card is not carrying anything as well. Whic would be a plus if you were sitting in a bank trying to get a loan for a house or something. Banks can't use that credit limit against your debt to income ratio. It can have both positive or negative impacts depending on the consumer.

To maximize your scores you need to revolve less than 50% of your credit limit. (i.e. 10000 credit limit with $6000 balance = 60%...bad. $4000 balance = 40%...good. The ideal situtation for everyone is to pay your balances in full and use less than 50% of your credit limit. Acutally having larger credit limits can boost your credit score as long as you are responsible (see above example).

Canceling credit cards.... This can have a couple different impacts on credit scores too. If you have several cards....5+.....you can actually help boost your score by cancelling your most recent cards. Remember longevity is a factor in your credit score. Cancel the one you've had for 1 year instead of the one you've had for 5 years. Keep a mix...Visa, M/C, AMEX, Discover. That should be plenty. If you have a card that has late payments, the logical thought is that you should cancel that card...WRONG! These cards stay on your credit report for 7 years. All the creditor will see is you had a card for 1 year (12 months) and made 2 late payments. 2/12 is late 16% of the time. Not good if you want a loan with a good interest rate. By keep that account open you are creating more on time payments even if you don't use the card. So let's say you kept the card open for another 2 years, 3 total. No more late payments, now your credit will show that you were late 2/36 which is 5% of the time. A whole lot better isn't it? Everybody makes a late payment once in awhile. And as long as it isn't over 30 days late it won't even be reported to the credit bureaus.

You should always try to use a card every so often. Even if you buy a tank of gas and then immeidately pay it off. Remember your credit score is your financial report card. The more responsibility you show the better your score.

Calling capital one to close your account is a pain in the a**! I know...I used to work there. The representative is paid to save your account from closing. The good thing about that is you can actually get better rates, higher limits, good balance transfer promotions, waiving or eliminitating your membership fee buy just keeping your account open. Just see how it compares to your other cards and you decide. 4-5 cards is plenty! You should have at least 2. If you really want it closed they are required to close it and read you a disclosure. If an associate doesn't do it properly they can lose their job. Capital One is required to meet federal requirements and all that good stuff.

Not all Capital One cards have membership fees. For people that don't have very good credit Capital One will charge you this fee to offset their risk of you not paying your bill along with higher interest rates. Some rewards cards have fees as way to help pay for the program. But let me repeat....not all capital one cards have fees! In fact there is a larger percentage that don't carrry fees. It depends on your credit. You can always ask to have it waived or eliminated if you have been doing better with your credit. Retention can do this too!

When you try to report your card stolen and ask not to have another card sent. That does not close your account!!!!!! You have to close your account via the retention department! If you report your card stolen this will show on your credit report as closing an account and reopening another account. This could hurt your score! Again...close it via retention. Ask the customer service rep to transfer you there as soon as you talk to one.

Hope all this helps! If you have any personal questions you can pm me and I'd be happy to answer them.

 

[Lear70]

Yes it is true that Capital One does not report your credit limit to the credit bureaus. This can be viewed a couple of different ways:

I'm sitting AT HOME, in my office, looking at my Experian AND Equifax credit reports.

I'm here to tell you that they ARE reporting my credit limit, and they're doing it accurately on both credit bureaus.

Evidently their policy has changed since you worked there, or I'm a fluke out of millions and millions of credit card customers.

 

[Whiskey Tango]

You have every reason to cancel it, and a certified mail with return receipt with a threat to sue for non-compliance usually does the trick (I've had 3 Capital One cards, they all closed with no issues).

That doesn'y sound like its easy to cancel.

I had one a few years ago. I didn't like the costomer service or the BS late fee they charged me. I won't do business with them

 

[Economy101]

I haven't worked there in awhile. Lots of customers did complain about not having the limit reported, so maybe they finally changed it!