Money Tips: Reasons for Lack of Credit Line Increases with Capital One Credit Cards?

Posted On: September 19, 2006

Guest: jlrdc909
Credit Expert (100+ Posts)
Post subject: Reasons for Lack of Credit Line Increases with Capital One Credit Cards?
Posted: Tue Sep 19, 2006 1:59 pm

You could get on your knees, bark like a dog and balance a ball on your nose like a seal, and guess what, NO CREDIT LIMIT INCREASE
If you ask, they answer will always be NO!!!!!!!!!!!!!!!!!!!!!!
If they grant you an increase its a different story.
basically “Dont call us, we’ll call you” is the attitude!

Guest: usmsci
Credit Expert (100+ Posts)
Posted: Tue Sep 19, 2006 3:42 pm

jlrdc909 wrote:
You could get on your knees, bark like a dog and balance a ball on your nose like a seal, and guess what, NO CREDIT LIMIT INCREASE
If you ask, they answer will always be NO!!!!!!!!!!!!!!!!!!!!!!
If they grant you an increase its a different story.
basically “Dont call us, we’ll call you” is the attitude!

the real question is why does Crappy 1 not offer CLI’s and everyone else does? BOA/MBNA and chase seem to be the best about this. i have found that Providian/Wash Mutual and HSBC wont budge unless they are about to offer you a BT rate good for 6 months, at least thats been my experience.

so why does everyone else do it, and not them?

from a washington post article here:

Quote:
Why would a card issuer do such a thing? McLean-based Capital One Financial Corp., one of the largest issuers in the country, heavily markets its cards to young consumers and individuals with imperfect or thin credit histories. It says it does not report any customers’ limits because “we consider [limits] proprietary” information, and “because we do not think it would be appropriate to impact the individual’s Fair Isaac score — positively or negatively — by reporting them.”

the problem that makes that reason fall flat on its face is that the impact that they talk about could NEVER be positive..always negative.. so thats hiding under sheep skin if you ask me.

Guest: Bikshu
Posted: Wed Sep 20, 2006 1:08 am

That you-know what about not wanting to impact people’s FICO is not the real reason. I have detailed in another post two very likely reasons that they do this. I’ll repost them so you don’t have to go searching for it:

Reason 1: As you have seen, not reporting your line hurts your utilization ratio, thus artificially deflating your FICO. This in turn means their cardholders will receive fewer offers and fewer approvals from competitors than they otherwise might have. It typically won’t destroy your FICO or anything, but even a 5-20 point drop does work in Capital One’s favor. This is very important to Cap One seeing as how they are very set on charging annual fees, yet very shady when it comes to generous credit lines, features, benefits, rewards, etc. So it is definitely in their best interest to limit your exposure to better offers as you are then more likely to stay with their cruddy cards. The Washington Post did that excellent ground-breaking article referenced above on this exact topic a couple of years ago…

Reason 2: This reason is not as widely documented, and is really known only by industry insiders. All the same, it is perhaps even more powerful than Reason 1 when you really start to analyze them. Historically Capital One, Providian, and MBNA have always been archrivals. This was because they were the three largest independent single-line banks in the country for many years. Single-line meaning that all three issued credit cards, and only credit cards (no checking, savings, mortgages, etc.) Of course all of that has changed within the past two years, as MBNA is now BOA, Providian is now WaMu, and Cap One is buying up real banks such as Hibernia like its their job. But again, historically the three were in a rivalry as heated as OSU vs. Michigan. Now MBNA developed the interesting habit many years ago of reviewing people’s credit reports and account activity more often than most other issuers. They look at what your credit lines are on your other accounts, and then try to leap-frog them with an automatic CLI. This is done purely as a marketing strategy, as most people consider it prestigous to have a larger credit line. MBNA understands this fact very well, and therefore hopes that by surpassing your credit line on your non-MBNA accounts, it might tip the scales in their favor and you’ll switch to using their card instead. It took Cap One a few years to catch on to MBNA’s ruse, but eventually they did come to learn of this ingenious MBNA marketing strategy. Additionally, as we all know Capital One is perhaps the stingiest of the major credit issuers in terms of limit-size. Therefore, they did not take kindly to the prospect of engaging in a CLI war with MBNA. The easiest solution? Stop reporting all credit lines immediately and permanently. Thus, MBNA can’t find out what your Cap One line is and therefore can’t leap frog it.

Typically when you ask a Capital One representative why they don’t report credit lines, their answer will be “Its proprietary knowledge.” This is what one of their CSR’s and one of their Credit Analysts both gave me as the answer when I asked. This is also the documented reason that the company spokesman gave when the above mentioned Washington Post reporter asked him this question. And “proprietary knowledge” tends to be reserved for marketing and business strategies. So this answer, given by Capital One itself, supports both of the above reasons.

Guest: mouse
SENIOR MEMBER (Member for 2 yrs.+)
Posted: Wed Sep 20, 2006 1:15 am

jlrdc909 wrote:
You could get on your knees, bark like a dog and balance a ball on your nose like a seal, and guess what, NO CREDIT LIMIT INCREASE
If you ask, they answer will always be NO!!!!!!!!!!!!!!!!!!!!!!
If they grant you an increase its a different story.
basically “Dont call us, we’ll call you” is the attitude!

BUT CAPITAL ONE HAS ONLY BEEN 3+ YEARS WITH NO CLI

MBNA HAS BEEN 11+ YEARS WITH NO CLI

Guest: spjoink
Credit Expert (100+ Posts)
Posted: Wed Sep 20, 2006 1:51 am

cancel your mbna card then < stop crying
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