A few weeks ago I received a change in terms notice by Capital One Canada. Verbatim it said:
Interest calculation change
"As of your May statement, we're changing the way we calculate your interest if you don't pay your balance in full by the due date. Here are the answers to some questions you may have about this change:If you don't pay off the balance from your previous statement the way we calculate your interest will not change for Account Access Cheques, new and undated charges What's new is that we'll begin charging you interest on all unpaid charges from your previous statement from the date the transaction occured.
We'll ensure your statement will display the proper rate to calculate the finance charges if you don't pay off you balance during the grace period. When rates change over statements, we'll use a weighted average calculation to determine the effective interest rate."
I read this over and over and thought what does this mean? Well it turns out after contacting the company and asking very pointed questions, Capital One Canada is taking out the grace period from the credit card. Not just mine by the way but all customers across Canada. I thought is this even legal and why are they doing this? The response I got from Capital One was - it's the economy. Now I know that Capital One is based in the US and doing something like that there wouldn't be surprising but here in Canada when the economic climate here isn't as severe? Capital One Canada considers itself independent of Capital One in the US so something didn't add up. Well I did some digging and contacted the Federal Government agency that oversees financial institutions and they said that Capital One at present is the only company in Canada that is doing this and it is possible that they are basing their decision on what happened in the US which isn't right. The Agency said I need to write to the company Ombudsman and if nothing happens to contact the Ombudsman of the government agency overseeing the banks and financial institutions. I again contacted Capital One to find out more information and was passed on to a supervisor who tried to convince me that this decision would benefit customers when in fact it wouldn't. I told her I would be contacting the ombudsman and because I've been with the card company for three years and never received any incentives I assured her that I would no longer use Capital One and as soon as I paid off what was owed I would close the account. (I've since cut the credit card thank God)
This notice is to anyone else who may be using Capital One's credit card services in Canada. Buyer beware. Get out as fast as you can because this move will only indebt customers further and pad the pockets of Capital One. If I find out anything more I will keep you posted. for Capital One customers check your statement and see if it says the same convoluted, message as the one I received stated above. If you have it, contact Capital One's ombudsman. What they are doing is not only unethical but illegal.
Dee in toronto