Capital One Says, “Create Your Own Credit Card”

By Curtis Arnold, Founder of CardRatings.com


Capital One just came out with Card Lab, a do-it-yourself site, where you can design a credit card that floats your boat. For starters, you have to indicate what your "credit level" is. Then you can pick and choose among basic and additional rewards, interest rates on new purchases and balance transfers, as well as whether or not you want an annual fee.

Your credit level choices are: excellent, above average, needs improvement, and limited history. Capital One defines these categories more generously than I would, but for purposes of coming up with an example I can share with you, I chose "above average," which Capital One defines as:

• I have had a loan or credit card for three years or more
• I have had a credit card with a limit above $5,000
• I have not been more than 60 days late on any credit card, medical bill, or loan payment in the last year

Once you choose your level, you are given an array of choices. Under Basic Rewards, you have to decide if you want 1% or 1.25% back on all purchases -- or would you prefer points or miles on each dollar you charge? Once you make a choice on the basic rewards, various other options change. For example, if you choose 2 miles per dollar charged, many possible additional features immediately disappear. There’s no longer a choice of an introductory APR on new purchases, and you are no longer entitled to choose among additional rewards. Plus, your only option as far as the interest rate is concerned is 16.9% and you must pay a $39 annual fee.

Not too appealing? Fortunately, it’s really easy to start over and see what happens if you make another choice. Choose one mile per dollar charged instead, and you still have lots of other possible benefits to choose – for example, how about a 25% annual bonus? That would entitle you to receive 25% more miles a year, so if you’ve racked up 4,000 miles, you would get an additional 1,000 miles. The card would come with a 0% APR on new purchases until August, 2008, with no annual fee and your choice of a variable rate of 14.9% or 16.9%. (Who would choose 16.9%?!)

It’s easy to play around with the basic and additional rewards options, and you can quickly see what happens if you choose one or another of them, be it double rewards on gas and groceries, double rewards on travel and entertainment, double rewards on all purchases for a year, bonus rewards with every purchase (10 miles, 10 points, or a dime on every purchase), or the 25% bonus I mentioned earlier.

Once you’ve settled on a rewards card, you can choose how it will look. You can go with the original Capital One logo, or you can choose something different – an eagle, flag, tropical sunset, roses, a mountain scene, and more. Once you make that choice, Capital One shows you all your choices and then makes it easy for you to read the fine print.

The Better Your Credit, the More Choices You Have
Say you have excellent credit, which Capital One describes as:

• I have had a loan or credit card for at least 5 years
• I have a credit card with a limit greater than $10,000
• I have NEVER been more than 60 days late on a credit card, medical bill or loan payment
• I have never declared bankruptcy

In this circumstance, you can choose a 0% APR on balance transfers, with a fee ranging from 0 to 2% or 3%. Or perhaps you’d like 6.9% for life on any balance you transfer now.

There are many choices, and looking at what happens when you make one or two of them is fascinating! Take a spin over to Capital One’s Card Lab, and check it out for yourself. Please let us know what you think!

This article was originally published on CreditBloggers.com by Curtis Arnold, a nationally recognized consumer educator and advocate. Curtis has been educating consumers about credit cards since 1998. He is regularly interviewed and quoted by respected members of the national press regarding consumer credit issues. Curtis is currently working on publishing a book about credit card usage with Pearson/Prentice Hall- more details forthcoming!

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