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ilovecats
United States265 Posts
On December 26 2006 21:04 j0ehoe wrote:
id like to ask some advice from the those who know a lot about credit cards
first off, let me say fuck capital one. first, ive had my card for 2+ years making over 30k a year and they havent raised me past 500$ limit.
and now, over the last two days, ive wasted about 3-4 hours of my life and still havent had my problem resolved. on dec. 24, i needed to go pick up a gift certificate to my parents favorite restaurant, this upscale italian place. my card got declined despite me paying 470$ on 12/20. this was after i used it a few times during the last two days, totaling about 200$. i go to look online to see why and it says im carring a balance of 49$ and that i have no available credit.
i sit on the phone and they first tell me that the reason was because on 12/20 i made a $270 purchase. it never happened. finally they tell me its an error and that the reason that i was declined was that they withheld 200$ of my payment. the lady said she didnt know why and couldnt get anyone else to figure out why. then they told me that a supervisor is going to call in 24 to fucking 48 hours. so im stuck longer without a card now.
id like someone to plz make sense of this situation, because i have no fucking clue what is happening.
One word, (actually three), CAPITAL ONE SUCKS.
Capital One (a.k.a. CRAP1 in the credit community) is notorious for being one of the nation's leading sub-prime lenders. They are mostly known as "once sub-prime, always sub-prime". They sure do issue "some" good cards to certain (few) people they like, but if you take a look at their overall portfolio, you will find tens of thousands of people telling the exact same story like yours.
Capital One loves to target young people as well as people with little/bad credit. Many people find their cards rather easy to get, of course with small limits such as $200, $300 and $500. The problem is, as your credit gets better and better over time and as you establish a nice on-going relationship with them, they on the other hand, are not willing to grow with you. They still see you as a sub-prime consumer even if your credit says otherwise. As a matter of fact, they are trying to do things that make your credit suffer. How?
As I explained in my previous posts, a very important factor to determine one's credit worthiness is UTILIZATION RATIO. This is calculated by comparing the balance on your credit card against its credit limit. There is individual utilization (on a single card) and there is also overall utilization(total balances against total credit limits on all cards). For example, a $400 balance on a card with $500 limit will have a utilization of 400/500 = 80%. We call this almost "maxing out" in the credit community and it's BAD BAD. An optimal utilization should be less than 10%!
See when all you have is small limit cards (we call them "toy cards" in the credit community) like Capital One, your utilization ratio is almost guaranteed to suffer because you'll easily max out your card. As a matter of fact, Capital One does not even report credit limits while most other credit card companies do. They report "high balance" as credit limit, which is the highest balance ever accumulated on one's Capital One account. In your case, your limit is so small it doesn't matter a lot because chances are you've already come close to $500 plenty of times. But imagine someone with a higher limit card let's say $5000, however the most he ever spent on that card is $1000. Capital One will then report $1000 as the credit limit. So when that same person spends $500 next month, he'll have a utilization ratio of 50% instead of 10%. Sad, isn't it?
Alright, so much for the ranting about Crap1. They have lots of other dirty tactics too such as the "holding of payments" you experienced but I'm too tired to list them all.
What should you do then?
Stop your heavy usage on Capital One, now. You better pay it off, and let it sit there. Do NOT close it because the age of the tradeline helps your credit. If you must use it, try not to spend more than $50 on it each month because you do not want your utilization to suffer any more. Give up any hope you have on Capital One even though you've been such a good customer for years. They don't like you, and they probably never will.
Get other cards from PRIME LENDERS. 3-5 to start if you can.
I wish I could tell you which cards you would qualify for. But I have zero knowledge about your credit profile. How old is your credit? Besides Capital One what other tradelines do you have? Do you have ANY degrotary items on your report such as "lates" and "collections"? If I were you, I'd order copies of your credit reports with FICO scores from http://www.myfico.com. Note that there are hundreds of websites out there providing reports and fake scores (we call them FAKO), but myfico.com is the only place you can get real FICO scores from all 3 credit bureaus. But it does cost money (about $39 with discount code CPPSAVINGS) and it's okay if you don't want to spend it. If you think you don't have any degrotary information on your reports because you were never late on any account and never owed some company money, you might have decent credit already. Wait a month for your credit reports to reflect the updated low balance on your Capital One card and try out for a few cards from the PRIME lenders I listed in my post above in response to Rekrul. Note that if you are a college student, you might wanna try the "college student cards" from AMEX, Citi and Boa/MBNA as they are usually easier to get. You may not get high limits initially (of course if you are lucky you might do, it depends on your credit). But if you can get in the door with the prime lenders I mentioned, they'll grow with you as you grow with them. They might give you automatic credit limit increases, or you might ask them for perioadic guideline increases. There are a LOT of strategies to get higher credit limits and it's impossible to cover them all in this post.
One thing to keep in mind though, is that a credit inquiry (hard inquiry) is placed on your credit report every time you apply for credit. Lots of recent inquiries can hurt your score as it's a sign of someone desperately applying for credit.You might want to start slow. Try a couple cards first and if you get declined, study the reasons. If there are problems with your credit and you know that you are not likely to be approved till you fix them, do NOT go on a mad application spree and hoping to be approved randomly. It will hurt your credit even more.
if you want higher credit limit, ask them, or apply for a different card, noones gonna increase it for u.
This is not true. While some lenders do not give automatic increases, some do. Citi for example, has been known to give good increases. Chase also gives automatic increases if they like you, and US Bank is another bank that has been known to give $1500 increases every six months automatically with good credit performance. There are many banks out there and situations vary. Generally, to get nice credit limit increases one should keep their credit in top notch performance by always paying on time and keeping the utilization (again!) low. Lots of lenders such as AMEX are generous with credit limit increases while some are not. Some will give increases if you ask them, without pulling a hard inquiry on your credit reports while some insists a hard inquiry. Your mileage may always vary. But the bottom line is if you have good credit,know the tricks and play the games right, it's not difficult to get good credit limit increases from good prime lenders.
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Permit me to ask a very dumb question. Why is it so important (to them) that you keep your utilization low? So that they won't have to bother with you a lot?
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ive had citi for about 3 years now, my credit line is still the same. my last 2 credit cards had a link on the online accoutn management page "request credit limit increase". but u seem more knowledgeable on the subject.
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ilovecats
United States265 Posts
On December 26 2006 22:46 MarcX wrote:
Permit me to ask a very dumb question. Why is it so important (to them) that you keep your utilization low? So that they won't have to bother with you a lot?
Because utilization is an important factor in credit score. High utilization = low score = high risk. From a creditor's point of view, when your utilization is high, it means you are using up a lot of your available credit. They are concerned that you are running up your credit cards because you are in financial trouble. When your utilization is low, on the other hand, you give them the better feeling that you still have a lot more room to spare.
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ilovecats
United States265 Posts
On December 26 2006 22:47 collegeBored wrote:
ive had citi for about 3 years now, my credit line is still the same. my last 2 credit cards had a link on the online accoutn management page "request credit limit increase". but u seem more knowledgeable on the subject.
Yeah not everyone gets auto credit limit increases. Some always have to ask. What kind of cards are those? Did you ever call and ask? There is a "request credit limit increase" link on Citi's online management. If you are already pre-approved for any increase, it will tell you right when you click it. Otherwise it will show you a form to fill out. If you fill out that form, they'll pull your report. If your overall credit is good and you dont have many recent inquiries/new accounts, it doesn't hurt to fill out the form and try. And another good secret about Citi is that they are good on reconsideration. If you are ever denied for new credit or a credit limit increase, you can always shoot them a letter from http://www.planetfeedback.com. It's okay to include personal information in this letter. Someone from the excecutive office will review your letter and reconsider your request.
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wow, i never really understood the utilization process youre talking about, thanks. i should have good credit, no lates or anything. i always pay my stuff off, but yea, ill let it creep up to 400's sometimes. does paying my card when i use something like 150$ reflect better credit?
also, i got a ton of pre-approved cards in the mail but never applied for them. i was actually considering filling out for an approved amex i got a few weeks back. i was just unsure because i know their payment schedule is different than a regular card. tonite after work im probably going to apply to chase, as per my mothers reccomendation (weve got a few cards thru them).
as for closing out the account with cap1, you suggest just minimizing my utilization for a month and then closing it? i gotta go to work, ill reread your stuff there and edit this. thank you very much again
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On December 26 2006 21:29 collegeBored wrote:
shit happens. your problem isnt a bad credit card company or bad customer support, nor even the fact they havent raised the limit past 500. i mean an issue in a 2+ year period with a company who proceses millions of transactions a day? how could it possibly happen.
if u rely on a single card (or single anythign else really) ure a moron and are bound to get fucked over at some point. get another card, keep multiple cards in your wallet, use a checkbook, pay cash. not like a credit card from capital one is the only possible solution.
if you want higher credit limit, ask them, or apply for a different card, noones gonna increase it for u.
i have a checkbook and i paid cash dipshit, its the fact that its embarrassing to get declined at a place that people know you. and most companies will automatically increase, not that it matters because i asked several times, so clearly, you dont have a clue waht youre talking about. try not being such a fucking smartass when you post.
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you came like, just in time for this thread ilovecats.
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ilovecats
United States265 Posts
On December 27 2006 05:21 j0ehoe wrote:
wow, i never really understood the utilization process youre talking about, thanks. i should have good credit, no lates or anything. i always pay my stuff off, but yea, ill let it creep up to 400's sometimes. does paying my card when i use something like 150$ reflect better credit?
also, i got a ton of pre-approved cards in the mail but never applied for them. i was actually considering filling out for an approved amex i got a few weeks back. i was just unsure because i know their payment schedule is different than a regular card. tonite after work im probably going to apply to chase, as per my mothers reccomendation (weve got a few cards thru them).
as for closing out the account with cap1, you suggest just minimizing my utilization for a month and then closing it? i gotta go to work, ill reread your stuff there and edit this. thank you very much again
Regarding Captial One, NONO don't close it. The age and history of that account helps your credit a lot because it's your only credit card. Just minimize the usage. Yes whenever you run up that card it helps if you pay it down immediately so that high balance doesn't get reported to the credit bureaus.
Okay now I see you get quite a few pre-approved offers. It means your credit could be pretty good. But be careful, pre-approved does not mean approved. The creditor will still check your credit report and evaluate your application when you fill out those forms and mail them back (or respond online). However pre-approval does increase your chance for approval and in American Express' case, pre-approvals *usually* turn into real approvals.
Here's how AMEX works. AMEX has two types of cards, charge card and credit card. A charge card works like a credit card, but the important difference is that you have to always pay in full every month when the statement cuts. Green, Gold, Platinum and One cards from AMEX are all charge cards. AMEX charge cards come with pretty hefty annual fees and they traditionally targeted those with higher than average spendings, otherwise the rewards will not offset the annual fees. For now you should stay away from charge cards because another important drawback of charge cards is that they do not report credit limits. As a matter of fact they do not have a clear "pre-set" credit limit. This can hurt your score with your current credit portfolio. Actually chances are you'll never need a charge cards these days because they are simply no longer what they used to be. Credit cards are a a lot more flexible because you have the option to carry a balance, and their rewards are just as good, if not better than charge cards.
The rest of the AMEX family are all credit cards. This includes Blue, Clear, Optima and a bunch of airline/hotel partner cards such as Delta and Hilton. If you have pre-approvals for these cards, select one that suits your needs the most (best with no annual fee) and send it in. Here are some hints you should keep in mind with AMEX. AMEX was tradionally an exclusive charge card issuer. They didnt introduce their first credit card, Optima, till 1987. Since charge cards were "pay in full" cards, AMEX's credit card operation kind of inherited a bit of such tradition. That is, even though they allow you to carry a balance just like every other credit card, deep in their soul they like to see "pay in full".They tend to highly reward those who use their card a lot and pay in full each month. Of course there are exceptions, but what I'm trying to tell you is that when you have a AMEX credit card, it's best to pay in full when possible. Avoid carrying a balance on AMEX over an extended period of time.
Another thing with AMEX is that they have recently "tightened up" their operations a little bit. You want to start slow with them. Don't apply for multiple cards from them in a short period of time or they might bug you with some financial statement stuff. Get one for now, use it wisely for at least 6 months and you'll start to build a good relationship with them. Once AMEX likes you, they can be very very generous with credit limits. After a year you'll be able to get pretty much any AMEX card you want with nice limits. But I suggest that you do not have more than 3 AMEX cards. Defintely not in the first year. Oh AMEX has a "luv button" on their online management website. It's basically a link to get credit limit increase. Upon activation of your card you might want to click that link and see if you can get a incresae. If not wait 6 months and try again. AMEX is generally very generous with limit increases once you establish a relationship with them.. Don't click it too often though.
Oh by the way, AMEX signed some deals in the recent years with other banks such as Citi and Bank of America/MBNA. You can see these "co-branded" AMEX cards issued by these banks. Remember these cards run on AMEX's network and are accepted where AMEX's are accepted. Other than that, they are not related to AMEX. They are issued and maintained by those individual banks accordingly.
Now let's talk about Chase. Chase has been a controversial bank in the past decade. Many people hate them because they are known to "rate jack". That is taking disciplinary actions on your accounts for no obvious reason by suddenly increasing your APR to a sky high figure, like 29.9%. This combined with some other questionable tactics of them screwed a lot of people up. However Chase does treat some customers right, including me and a few people I know. It's hard to figure out exactly what they like and don't like. One thing for sure is that they don't like to see a lot of new accounts and they don't like to see high utilization ratios.
If you read my post on the previous page in response to Rekrul, you'll see that I named quite a few prime lenders in this country. For example Citi is rated far ahead of Chase and is considered one of the best credit card issuers. Defintely get a couple cards from Citi if you can. Again use them wisely and establish a strong relationship with them. That will surely be rewarding in the long run. Credit union cards can be very nice too. They usually have very competitive rates and low fees compared to bank credit cards. So you might wanna check those out.
Finally when applying for credit cards, for now you want to try to stay away from two types of cards: "Visa Signature" and "World Mastercard". These are considered premium credit cards but they do not report credit limits, which is not good for you at your current stage. When your credit portfolio gets stronger and you have higher overall limits, you may consider these cards. There are a lot to learn about credit cards and over time you'll begin to realize which offers are good and which are not. Read the terms and conditions of each card. Stay away from those cards with various fees such as "annual fee, application fee, enrollment fee, participation fee and program fee". Use your cards wisely and soon you'll have a pretty shiny wallet. 
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cats, thanks you very very much man. that gave me a ton of information. just wondering, do you work for a credit card company or have experience in that field?
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ilovecats
United States265 Posts
Glad to be of help. No I don't work for a credit card company. There was a time I had troubles with credit cards and I worked hard to fix it. Then I kind of made it a hobby to learn things about credit and enjoyed having good credit ever since.
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good decision ;p. well thank you again and welcome to tl.net 
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Aotearoa39261 Posts
wow o.o
this thread is perfect... i recently got my first credit card and i had no idea about any of this stuff... ilovecats you are amazing! thanks so much
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ilovecats
United States265 Posts
On December 27 2006 06:52 Plexa wrote:
wow o.o
this thread is perfect... i recently got my first credit card and i had no idea about any of this stuff... ilovecats you are amazing! thanks so much
I'm not knowledable on credit systems outside the U.S. so some of my statements may not be true in your country. But there is one thing I believe that's universal. Time. Credit is all about performance over time and building good credit definitely takes time. It's quite easy to pay on time for 3 months. But to keep doing so for 30 years is not. Keep time in mind when you start out on credit. Be patient and don't try to advance too fast. Let your existing accounts age for a while before trying to get new ones. Good luck.
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Credit cards can be incredibly powerful tools. I highly recommend Fatwallet Finance for credit card information:
Fatwallet Finance
There's a lot of really good credit sign up bonuses and balance transfer options posted on there from time to time. Some of the recent highlights are the $150 bonus for the Chase Sony card and the $250 American Express Business sign up bonus.
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EPT
