Capital One hikes credit card interest rate by 5%Provider now has no cards below 19.9% APR
07 June 2010
Capital One has increased the standard interest rate (APR) for purchases on its Plus MasterCard by 5%, from 14.9% to 19.9% for new customers.
The increase means that none of Capital One's four credit cards offers an APR below 19.9% - the Plus MasterCard and World MasterCard both charge 19.9%, while the Progress and Classic cards both charge 34.9%.
Which? credit card expert Martyn Saville commented: 'It's incredible that at a time when Bank of England base rate is still at a historic low of 0.5%, Capital One can hike its rates in this way, taking the APR up to a massive 40 times base rate on even its cheapest credit card. There are far better cards available for borrowing.
'Furthermore, the Plus MasterCard offers no 0% balance transfer deal and only offers 0% on purchases until 1 October 2010. This 0% period of less than four months is no way near the 12-month deals available elsewhere.
'The only card from Capital One that is currently worth considering is the Capital One World MasterCard, and only if you clear your credit card bill in full every month. The World MasterCard offers an attractive 1% cashback on all spending with no maximum on the amount that can be earned. The card also offers a bonus cashback payment of £10 every January. However, the annual fee of £18 makes this cashback card most suitable for big spenders. You'd have to spend £800 a year on the card just to cover the net fee of £8 (the annual fee of £18 less the bonus cashback of £10). For all other types of credit card, I'd recommend looking elsewhere.'
Which? Best Buy credit cards
If you need advice to choose the best credit card for your needs, read the free Which? guide to choosing a credit card. And if customer service is important to you, make sure you check our Which? Recommended Providers before choosing a card.
Once you know the best type of card for you, check out Which? Best Rate credit cards to find the most competitive deal available today, whether it's a cashback card, a card offering 0% on purchases or the longest 0% deal on balance transfers.
Which? Money when you need it
You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.
Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.
Or for money-saving tips, and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast
For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.