Capitol One Credit Card News

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An incident which was blamed on ‘a systems error’ by Capitol One credit cards, have sparkled off a series of debates over hidden interests and fees charged by credit cards. In January, Olathe resident John Wittenborn was shocked to receive late penalty fees and raised interest charges, even though he had made his payments on time. Fortunately he was able to support his claim with evidence. Capitol One received his payment on January fourth but did not register it till January 11. Even though Capitol One termed it as ‘a systems error’ and left it at that, consumer groups and Congress members have latched onto it.

In the last few years, the nation’s debt has soared to a whopping $750 billion, and a significant chunk of that includes unexpected penalty fees and interests. This has led many agencies to question the practices employed by credit card companies. Ed Mierzwinski, the director of consumer section, US Public Interest Research Group, believes that the industry is more concerned with enhancing profit than reducing risk factors.

In May, Senator Carl Levin introduced a legislation to contain the interest hiking maneuvers of credit card companies. However some believe that exposure of credit card regulations will be more effective than prohibiting certain practices. This will give the customers a chance of managing their expenses. According to the managing director of American Bankers Association, Ken Clayton, “…people should be aware of fees that will be charged. And they can adjust their actions in ways that best work for them.” Congress, however, feels that this is not enough. The “Stop Unfair Practices in Credit Cards Act” would address the following issues-

• Retroactive Interest Charges
• Unjustified Interest Rate Increases
• Repeat Over-Limit Fees
• Fees for Paying a Bill
• Double Cycle Billing

According to the Congress, this Act would bring some much needed relief to the average, middle-class Americans stooping under heavy credit card debts.

In other news, the Capitol One credit cards recently got entangled in identity theft issues when Judith Washington reported an unaccounted transfer of $12,000 from two Capitol One credit cards to her JCPenney Master Card. Since she had no Capitol One credit card, it became a matter of grave concern for her. The card issuer, however, assured her that this was not a case of identity theft, but a result of fraudulent activity.