I've been giving it a lot of thought and compared Cap 1's tactics to what every other creditor does and I've come to the conclusion that Cap 1 probably hurts you, overall, more then it helps you. Now I will say that if you are trying to get some decent trade lines on your report and can't go prime, then Cap1 is not a bad idea. For the average consumer whose credit is fine, though, I think they have the potential to hurt you. Here's why I think this: 1) From the start, Cap 1 is the only credit card company I know of who pulls a hard on all 3 credit bureaus when you apply. They know that hards are bad for your score and will make you less desirable to other creditors. The argument could be made that they pull from all 3 to make sure that they know your entire financial picture. The flaw in that is that when they do an account review (i.e. soft), they only pull from one bureau. I've had Cap 1 for over 2 years and they have only done AR's on EQ. If I had an unpaid lien on my TU report posted after I opened the account, they would never know it. 2) Cap 1 will not tell you your line of credit until you open the account. Who here has not received mail from Cap 1 touting a card with a huge credit line but in small print the minimum credit line is much smaller? You take the bait, open the card and wam, you get the minimum credit line. If you think they didn't know ahead of time what your credit line would be, you're sadly mistaken. Of course, now you have a trade line on your reports that will drag down the average age of your accounts and reset the clock on the newest account opened. I fell for this little trick back in February and on my EQ report, FICO tells me that I'm getting dinged because my "newest" account was opened 8 months ago. It was open for all of 5 minutes but the damage is done. 3) Cap 1 will not let you combine two cards for a bigger LOC. Every other cc company will let you do this, generally, but not Cap 1. We all know that there is an optimal number of cards to have. For the sake of argument, if that number is 3 and you have two Cap 1 cards, then you have two choices: get 4 (or more) cards and hurt your score or take just 1 other card. Either way, it's a bad choice. 4) My biggest reason of all, without a doubt, is the lack of reporting your CL. This one hurts in multiple ways and here's why. Let's take Joe Consumer who has a $4,000 CL with them but only charges $300-$400 and pays it off every month. He will always be at 75-100% of utilization on his report even though this is truly not the case and that, as we all know, is a score killer. What's worse is that when he applies for a new card at some other bank, they will think he's maxed out and not extend him credit. Citibank specifically told me that they look at your overall utilization as well as each TL. They want them all to be at 48% or less. Even if Citi does give you a card, they're going to think that you only have a $400 CL. Do you think that they're going to give you a $10,000 CL if Cap 1 only gave you $400? Furthermore, and I have no proof on this at all, but I would be willing to bet that FICO also looks at your average CL and your total CL in your score. Think about it: who is less risky, someone with $2,000 or someone with $20,000? $2,000 is small which implies that no one is willing to stick out their neck to far. $20,000 is a lot which means that the bank(s) feel that this person is a lower risk. To add insult to injury, this situation only makes it harder for you to get a CL increase from them. Why? All 3 CB have shut off Cap 1 (and others doing the same thing) from seeing what your LOC is with your other CC's. You could have $5,000 with Citi and only $2,000 with Cap 1 but they don't know that. They do an AR on your report to look for bad things, not good things because they really can't see much. If they knew that Citi gave you $5,000, they might raise your limit to compete. They don't know that though, so they have no incentive to raise you. Again, when I had crappy credit and would jump at anything, Cap 1 was fine. Now that I'm getting prime offers, though, I think it's time to say bye-bye to them. If you have good credit, I think they're a terrible choice regardless of how good the interest rate may be. Cap 1 is known in the industry as having the most sophisticated computer systems. Surely they must pull thousands of credit reports every day (with scores). Feed all of these reports and scores into a computer and you would have a pretty good idea of how FICO works and then turn that system to your advantage.
Two reasons: 1) None of their competitors can see what CL you've been given and try and steal you away with a better offer 2) As noted in my original post, in many situations, this can kill your score which will make you less desirable. While other creditors may offer you credit, they will offer you lousy terms because of your lower score. Frankly, I think the 3 CB's need to step up to the plate and tell Cap 1 to either play by the rules or we'll shut you off. Considering that Cap 1 is one of the largest CC lenders, how many scores are needlessly lower because of their tactics?
pretty good observations AG, I'll admit Cap1 might not be for "prime" customers, but for some of us trying to re-build -- they have been more than fair, just as long as you pay on-time & more than the minimum.
I agree with you on them not reporting the CL's, but they will let you combine cards. I combined four cards into one platinum with the combined CL of all four cards. L
ef, I totally agree that for building credit, you don't have many options and Cap 1 is probably the best one to go with. Over time though as your report improves, I think they become less and less desirable.
I tried and tried to get them to combine two cards and they wouldn't let me. Maybe it just depends on the situation.
Excuse me for being blunt, but please don't be so quick to brand Cap 1 as a bad company. As far as the customer service goes I cannot give them higher reviews (although I will say I've only delbt with Mr. Cooke). This company gave me credit when NONE of the others would - after less then a year I went from a secured card to an unsecured gold with a $3000 limit. Mr. Cooke gave BIG limit increases and NEVER pulled a hard inquiry ever. He was very decent in his attitude and basically said they could care less about what happened to your credit in the past, they are only concerned with the present and future (this has proven to be true with them) As far as them not posting your true limit - so what, all you need to do is charge up to limit at the end of your billing cycle, then pay it off, It will then show your HIGH LIMIT on your reports. From then on you can charge $1 a month and pay it off each month, but it will still always show the HIGHEST LIMIT you previously charged up. One other thing, you don't get all those other rediculous fees you see from some of those other subprime issuers like Bank of marin or First Premier. I honestly would keep one of they're cards no matter how spectacular my credit becomes. -Sal