News out of the world of credit cards: Capital One has raised interest rates for almost 70% of its customers. Why? Because it can.
Yes, your credit card company can change your interest rate for any reason -or no reason at all. Capital One, in an effort to stay “competitive,” has decided to raise its rates and convert fixed rate cards to variable rate cards tied to the LIBOR.
I spoke with a contact at Capital One who confirmed for me that they reviewed all of their customers and somewhere between 70 and 75% of all customers have been affected by this. Notices are being mailed out. Capital One is doing this in an effort to be more competitive with other credit card companies.
Some people may notice a small change as the LIBOR is currently down. But, for most people, this is going to be an increase of 4 to 7%. And as the economy comes out of the recession, the LIBOR will go up. This means that the rates will go even higher.
If you have a Capital One card, now is the time to look around.