Capital One: 43 Cents And The Straw That Broke The Camel's Back

Earlier in the month I published a piece regarding Capital One charging me a membership fee ($49) and how, after being a loyal customer (7 years) and receiving zero – ZERO – benefits, perks, etc I was contemplating cutting the cord.
I wish I could tell you the story ended there but it doesn’t.

Today, I logged into Mint because I received an email notification saying I was being charged a fee. Curious, I log in and see Capital One was charging me a Late Fee of $15 on a balance of .43 (that’s, cents, mind you)

Yup.

Here’s how this breaks down:

When I was charged the $49, I was also being charged a flat fee for “Payment Protection” of .43. Well, Capital One waived the membership fee, but they failed to waive the .43 (don’t get me started on how this could happen – just know that it did happen). So essentially I had a balance of .43, which no one informed me about when I had the membership fee waived. So unbeknownst to me, I had a balance of .43.

There is a small fraction of ignorance on my part as I should’ve known about this balance. I am usually very cognizant of the balances I owe (especially on the cards I use). This specific account of Capital One (and the .43 balance) slipped through the cracks – mostly because I do not use this card; it sits in my dresser, collecting dust inbetween my widowed socks (socks that no longer have a matching partner) and a TI-83 (don’t ask).

So I called Capital One this morning; furious, I had to call twice to calm myself down. At this point, my concern is my credit score (which I have worked hard to protect and get to a respectable/competitive number). After talking to three people and using expletives I haven’t used since the Military, I finally get a senior account rep:

AR: Sorry Mr. Smith for the inconvenience. But we usually don’t waive the membership fee and we only did that because you had such a long history with us –

ME [interrupting]: Stop. Stop acting like you did me a [expletive] favor. Fact of the matter is, I’ve been a customer of yours for 7 years – 7 YEARS – and ZERO activity has happened on my account (credit limit increase, APR decrease). And not only did you have the AUDACITY of charging me a membership fee like your card is some exclusive credit card, but then you charge me .43 on a balance that YOU waived. And NOW you want to charge me a late fee? You do realize that this doesn’t make sense, correct?

AR: Yes, Mr. Smith and we greatly apologize for the inconvenience. This was an accident (error) on our part -

ME [interrupting, again]: Save your speech for someone else. I’m in no [expletive] mood to hear this [expletive]. I am on the edge ready to jump and I know you can’t do anything about it to keep me as a customer. You cannot increase my limit, nor can you lower my rate, offer benefits and/or some type of reimbursement for this inconvenience. Cancel my account. Better yet, cancel my account and send me paperwork that specifically states that I cancelled this account and it has a zero balance.

AR: Yes, Sir.

ME: Will any of this (late fee, outstanding balance of .43) be on my credit report?

AR: No, Sir.

ME: It better not be. If it is, come hell or high-water, I will find a way to short your company.

I know what you’re thinking: “Will, was that language necessary?”

My answer is: “Absolutely.”

I have been patient with them. They took advantage of the customer. I highly doubt this was an “accident” as the account rep was informing me over the phone. Being charged .43 after a $49 fee is waived doesn’t sound like an accident, it sounds like ignorance. It’s hard for me to believe that someone just “failed” to waive this .43. It just seems too ridiculous to be true.

Afterwards, I felt good, refreshed. My relationship with Capital One is finally over.

When I get home, I’ll open my drawer, move my widowed socks, grab the card, cut it and then put it in my safe.

This should’ve been done a long time ago...

…as my widowed socks didn't enjoy its company either.

The Gold Standard

I've been giving gold a lot of thought lately. Mostly because I don't own it (I do think it's extremely speculative right now), but yet, I am fascinated by its value (perceived or otherwise). I have reached out to two friends (Shawn, Brad) to help better understand The Gold Standard. Thankfully, NPR's Planet Money has two AWESOME podcasts regarding the topic. To understand the Gold Standard, you need to understand both sides of the argument coin (pun intended).


Part 1

On today's show, we visit the charming curmudgeon and respected finance writer James Grant. He says we should go back on the gold standard.

His basic argument: Under the gold standard, money holds its value. Central banks can't create (or destroy) money at a whim.

Part 2

Franklin Delano Roosevelt ignores the advice of America's big-name economists — and listens instead to a guy who helped take care of the trees on his estate.

Montagu Norman, head of the Bank of England, gets a coded message at a critical moment — and completely misunderstands what it means.

On today's Planet Money: The gold standard and the Great Depression.

Double-Dip Recession

There's been some talk about a double-dip recession. Paddy Hirsh whiteboards a double-dip recession and equates it to surfing.

Brilliant!

The Hidden Demons of High Achievers

I've been reassessing my personal and long-term career goals. In doing so, I have realized that I am very impatient and I seem to pile a plethora of projects in addition to my regular workload. The impatience, projects, interests, passion, anxiety it all can lead to an extreme amount of frustration and it can sabotage my career. So when I heard The Hidden Demons of High Achievers from Harvard's Ideacast, I realized that I am a high achiever but I need to realize that I cannot do everything.

Thank God for this podcast because I thought I was going crazy.

When It’s Time To Cut The Credit Card Cord

I logged into Mint.com today (I love me some Mint) and I saw that one of my credit cards, of which I have a zero balance and have owned for 7, years has decided to charge me a $50 “membership fee”. My credit limit is…$500.

They are charging me 10% for essentially, nothing. They offer me no services, rewards, points, laxatives, hookers, etc…nothing.

Naw, playa.

The sheer audacity of this company, Capital One, to charge me this membership fee is ridiculous on many levels. Mainly because they haven’t treated me like a valued customer; they haven’t increased my rate in 7 years (yes, I have asked). Frankly, a $500 credit limit is a drop in the bucket to the credit cards I carry on a daily basis (AMEX Starwood, Chase Freedom).

I’ve heard not to cancel your oldest credit cards -- it shows more credit history. But I believe alleviating the hassle of holding onto this card, and straight-up insulting nature of Capital One’s membership fee, far outweighs the slight ding on my credit score. It's time to separate fact from fiction. George Mannes wrote

The most important point made by [FICO] spokesman Craig Watts is that it's a myth that if you close a credit-card account, all trace of it disappears from your credit score. In fact, he says, the credit agencies from which FICO draws information used to calculate your score hold on to payment history for years -- the positive stuff for about a decade and the negative stuff usually for seven years.

You've read -- perhaps from well-meaning people on FICO's own message boards -- that you should never close your oldest credit card because your length-of-credit-history measurement will immediately plummet? Again, that's a myth, says Watts. (Dropping it might affect your credit score a decade from now, he grants, but the impact will be small potatoes compared to that of your credit-related behavior in the interim.)

Like all things, there must be a strategy involved and credit cards are no different.

If your credit card rate, balance aren’t in your long-term plans,

1. Prepare an Exit Strategy – if you do cancel this card, what happens next? Will you still have a respectable line of credit? Are you still able to get credit? Checking your credit score may be a good idea at this point so you can understand your leverage


2. Contact the credit issuer and see what can be arranged. NOTE-any limit request increase and/or APR decrease will affect your credit score in the short term(because they will judge this by conducting a hard inquiry against your credit score)


3. Evaluate its usage – How often are you using this card? If not very often you may have to conduct the standard cost-benefit analysis


4. Cost-Benefit Analysis – Everything has a cost and a benefit. Some benefits range from superb customer service to balance, APR and cash back. Evaluate these and prioritize them -- keep in mind there may be a cost (fees, protection, etc)


5. Cut the Cord – after all measures mentioned above are exhausted, and the cost outweighs the benefit, it may be time to walk away.

You should be selective about what type of credit cards you receive (try to cut back on the store cards). Your expectations should be met throughout the duration of the relationship and you set these expectations.

No Tags

After (almost) 6 months, I'm back. I've decided to incorporate more "life" things in this blog instead of finance and economics all day, everyday. I have discovered that these two topics can be uninteresting to people...go figure.

I had an appointment to see an apartment today. I was walking down Taylor Street and I had just crossed Racine as I see a khaki colored blur running on the other side of the street. This blur was going fast; full speed. I look behind it and I saw nothing. This blur was a dog and its owner was nowhere. As I look back at the dog, I see it dart out into the street.

I see the SUV.

I see the dog.

SUV.
Dog.

BAM!

The SUV comes to a halt. A crowd gathered at the intersection. I walk to see the dog hoping for a miracle. It was still alive. Blood coming out of its nose and mouth. Its leg was twitching.

Still breathing.

A man, his wife and son come to see the dog. It's not theirs. The dog was severely hurt.

Suffering.

I tell the man we have to put the dog out of its misery. We couldn't let it suffer. I mentioned His son kept his distance. The man picked up the dog and we carried it to the sidewalk. Blood still coming out of its nose.

Still breathing.

We didn't know what to do.

The driver came -- she's frantic and upset. We look at the dog's collar - no tags. Damn. The stranger and myself are petting the dog, doing what we can. I look at his son, he had his hand over his mouth, with his brow raised, looking sad.

Down the street we see a policeman's SUV. Perhaps they would know what to do.

I look back at the dog... nothing.

No leg twitching. No breathing.

No tags.