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I know someone who wasted two years trying to use a capital one secured credit card to help rebuild their credit history. The initial card offer was a $300 secu

I know someone who wasted two years trying to use a capital one secured credit card to help rebuild their credit history. The initial card offer was a $300 secured card and they figured it was the best they could do, ho hum, and just patiently plugged away For two years, they used the card routinely, paid if off religiously...sometimes having a monthly spend three times the limit. They would periodically request either a security deposit refund or to have their credit limit raised - more security deposit or not. Constantly denied, automatically, even when trying to escalate it with customer service agents. I forget the term, but when you essentially trade in one type of card for another from the same company - tried that too. Denied. Finally, on a whim they tried another company, and got instant approval for an unsecured $3,000 limit card. They stopped using the Capital One card except for a service or two that totaled $10, maybe $20/month. 2-3 months later, Capital One did a soft pull where the new card showed up and within days of the pull, refunds the security balance and moves them to an unsecured card with $3k credit limit.

Turing_Machine 3y ago
> For two years, they used the card routinely, paid if off religiously...sometimes having a monthly spend three times the limit. While I don't know exactly what's going on in your friend's case, this makes for an unprofitable customer from the credit card company's point of view. Now, obviously they want to get paid, but for them the ideal customer is one who maxes out the card and then makes the minimum payment every month, thus incurring an interest charge, or better still, makes the minimum payment, but late, thus incurring a late fee on top of the interest. Customers who pay off the card every month don't provide any interest to the credit card company.
486sx33 3y ago
This is the strategy… someone else always wants you more than the company that’s already got you.. seems to work for telecommunications contracts as well
LeafItAlone 3y ago
That certainly sucks, but also kind of makes sense? Once they had the additional data that another company evaluated them as trustworthy, their trustworthiness to Capital One seems to have gone up. They didn’t want to be the only one bearing risk.
- ClumsyPilot 3y ago
  But that’s why competition is important, this only works if many companies are doing their own, independent risk assessment
- hombre_fatal 3y ago
  Meanwhile Discover’s secured card offering becomes unsecured in six months and they give you periodic updates on how much time is left and how you’re doing. My experience with the Capital One secured card is the same as their story. And the difference between the two companies here is the difference between them in every way. Even little stuff like when I give my info to Discover’s customer support robot before I talk to a human, the human has all the info. Meanwhile when I do the same with Capital One customer support, I usually need to give the same info to the human again.
- KennyBlanken 3y ago
  There is no additional risk if the customer offers a higher security deposit to raise their "credit" limit on a secured card. They get the interest on the deposit and lower costs (fewer transfers per month paying off the balance of the card.) They didn't care.
scarface_74 3y ago
I don’t see the harm. The secured card did its job
crazygringo 3y ago
Nothing unusual about that at all. They didn't have good credit, so the Capital One card helped them establish it. Then they got a better card with another company based on that credit. Now having two cards improves your credit further, as well as using a lesser proportion of your overall credit. So Capital One upgraded their card. Literally all of this is working as intended and it's just credit score algorithms. Your friend didn't waste two years on the Capital One card -- they built credit history with it.
tareqak 3y ago
This story parallels the stories here of people staying at their employer hoping to get raises, but then ultimately switching to another one who values their experience more than their former employer.

Turing_Machine 3y ago

> For two years, they used the card routinely, paid if off religiously...sometimes having a monthly spend three times the limit. While I don't know exactly what's going on in your friend's case, this makes for an unprofitable customer from the credit card company's point of view. Now, obviously they want to get paid, but for them the ideal customer is one who maxes out the card and then makes the minimum payment every month, thus incurring an interest charge, or better still, makes the minimum payment, but late, thus incurring a late fee on top of the interest. Customers who pay off the card every month don't provide any interest to the credit card company.

486sx33 3y ago

This is the strategy… someone else always wants you more than the company that’s already got you.. seems to work for telecommunications contracts as well

LeafItAlone 3y ago

That certainly sucks, but also kind of makes sense? Once they had the additional data that another company evaluated them as trustworthy, their trustworthiness to Capital One seems to have gone up. They didn’t want to be the only one bearing risk.

ClumsyPilot 3y ago
But that’s why competition is important, this only works if many companies are doing their own, independent risk assessment
hombre_fatal 3y ago
Meanwhile Discover’s secured card offering becomes unsecured in six months and they give you periodic updates on how much time is left and how you’re doing. My experience with the Capital One secured card is the same as their story. And the difference between the two companies here is the difference between them in every way. Even little stuff like when I give my info to Discover’s customer support robot before I talk to a human, the human has all the info. Meanwhile when I do the same with Capital One customer support, I usually need to give the same info to the human again.
KennyBlanken 3y ago
There is no additional risk if the customer offers a higher security deposit to raise their "credit" limit on a secured card. They get the interest on the deposit and lower costs (fewer transfers per month paying off the balance of the card.) They didn't care.

scarface_74 3y ago

I don’t see the harm. The secured card did its job

crazygringo 3y ago

Nothing unusual about that at all. They didn't have good credit, so the Capital One card helped them establish it. Then they got a better card with another company based on that credit. Now having two cards improves your credit further, as well as using a lesser proportion of your overall credit. So Capital One upgraded their card. Literally all of this is working as intended and it's just credit score algorithms. Your friend didn't waste two years on the Capital One card -- they built credit history with it.

tareqak 3y ago

This story parallels the stories here of people staying at their employer hoping to get raises, but then ultimately switching to another one who values their experience more than their former employer.