Tag Archives: Capital One

Keeping You Updated

Things change pretty quickly in the world of finance, credit, money and investing. Here are some updates to things we talked about in the last few  months. You can always find the stories at yourmoneybook.com and click on the radio stories button:

A few months ago we talked about the changes for airlines and your frequent flyer miles. Well, Air Canada just did another round of cutbacks to what you’ll earn and an increase to what you’ll need to redeem. Remember to think of your reward miles like bananas. Use them up as they don’t increase in value over time! Oh, and Westjet and Air Canada now charge baggage fees – surprise! Did you think they’d just ignore the $30 to $50 million in profits that you’re now going to hand over forever?

If it makes you feel any better, the deep discount carriers in Europe and the US now charge for carryon luggage. With Spirit Air, you can pre-buy it online at $35 for a carryon. If you want until you get to the airport, it goes up to $50 and if you do it at the gate, it’s $100 for a carryon!  Oh, and you’re paying $10 to print your boarding pass.

Yikes, it’s offical: Costco is dumping American Express in Canada. You’re Amex card is no longer welcome starting January 1st. They’re now partnering with Capital One. What’s in my wallet? Not Capital One! But, it’s a good guess that they changed over for a whole lot more money from Capital One…But why go from Amex whose clients spend four times more than Visa clients to a card that targets credit challenged people? Makes no sense, even if their kick-back is way higher.

I just read two reports that show independent book stores are growing in numbers and volume of sales. Great news as I love independents. I don’t deal with Chapters – you won’t find my books with them. I’m the author of 17 books. 14 are only on my web site and three are ONLY available at a few independents, including Mosaic on Bernard. When I talk about shopping local, I actually give up a ton of sales to do so. Actions speak louder than words.

For the last month, the stock markets have gone a little nuts. Down 300 points in a day, up 200 the next. We keep talking about the dangers of buying one or two stocks. If you’ve done that, if you gambled like that, you’re probably down a ton of money. If you’ve invested in good growth mutual funds, you’re already up again. I manage a seven figure account for a relative and all the bad news last month still had a 2% return for the month with Dundee Wealth.

And if you’re a gambler, gold and silver are below 2010 prices. Bitcoin, which is an online currency is down 75% for the year. If you bet only on energy stocks, you probably lost over 40% of your money. Those one-off buys are not investing. They’re gambling – and on these and many others, it’s a big loss right now. Investing is a five year or longer time period with a mix of good growth mutual funds with a long track record. Investing is also buying a fixed amount each month. Set it and forget it.

Can You Really Sign Away Your Credit Card Rights?

Capital One made social media sites explode a few weeks ago. Their new U.S. credit card contract contains a collection clause that states they can suppress or change caller ID when calling you. In other words, they can spoof the caller ID to make it look like it’s one of your relatives so you’ll answer. It’s really easy to do, and something most scamsters already use when they try to con you.

The Capital One new agreement also states they can do personal collection visits at your work or home. I haven’t found the Canadian master agreement. If you have a brand new Capital One credit card, get in touch with me as I’d love to see a copy to find that text.

What’s in your wallet? In the U.S., at least for now, I hope it’s not a Capital One card!

Is Your Credit Card Safe?

If you have your credit card handy, here is something that really worries me, and I sure didn’t know: Call the 800 number on the back of your card, enter your credit card number, and you can click 1 or click 4 or whatever prompt to get your balance. But, with some card issuers, there may be no point in there where you need to enter your PIN number! In other words, anyone who has your credit card number can get your balance inside of ten seconds – they don’t even need your card!

The first four digits of your card number identify the bank. So if your card starts with 4535, it’s from Scotiabank. If it’s 4510, it’s the Royal Bank. And if you have a Scotia Visa card, there is no need to identify yourself to get the balance. Never mind what fraudsters can do with it, isn’t there something seriously wrong with that? By the way, American Express does make you enter your PIN number, Royal asks for the last four digits of your home phone number, and Capital One MasterCard asks for your date of birth to assure it’s really you.

I get about 10 to 20 credit card payments a month. Should I be able to access those clients’ balances? I can’t get their credit bureau report and calling their credit card issuer won’t get me anywhere. But I can get their balance? There’s something very wrong here, especially now that almost every cardholder has a chip card that does come with a PIN number already!

Unfortunately, the Federal Privacy Commission has chosen not to respond to my SOS inquiry over the last eight days. However, this matter is worth pursuing: Next stop is the Federal Finance Minister’s office. Stay tuned…

Three Short Insights You Should Know

J.D. Power Fall 2009 Credit Card Satisfaction Survey

Each fall J.D. Powers conducts a very comprehensive credit card survey. It rates overall satisfaction, along with how happy cardholders are with their rewards, payment processing, problem resolution, customer service, and fees.

This year, American Express rated five stars, head and shoulders above other national card issuers in all categories. At the bottom of the bottom, with the worst score on customer’s satisfaction with their credit cards were Capital One, along with GE Money. GE is a surprise, as they handle the Wal Mart cards, and Wal Mart prides itself on great customer service! As to Capital One – what’s in your wallet? I hope it’s not one of their cards!

But the scary response to the survey was that 53% of us did not know the interest rate on their card, even though it is printed on every statement. Not knowing that we are paying around 20% on our credit cards is not good news!

Scotiabank can’t be happy with a bunch of national press recently. But there’s a great lesson for anyone over age 59 to learn! All banks offer seniors a no charge service banking packages, or greatly reduced service charges at various ages, but for most it’s at age 59. Barry Ashpole, a 66-year old college teacher, had the TD and Royal automatically lower his fees, because all the banks have your birth date on file. But Scotia kept charging him the full service charges for seven more years! When he discovered the huge overcharges, he hit a wall of no help to get this reversed, and fought it all the way to their Ombudsman’s office. At that point, he received a six month refund of $71. They wouldn’t refund the other six and a half years! You need to make sure you know when you are entitled to a break of the huge service charges, or you’ll get taken, as Barry Ashpole found out the VERY expensive way.

And a final update on your credit cards: Time and time again, I point out how critical it is to check your credit card statement line by line. Stuff shows up that’s not yours, merchants who accidentally, or because of a kinky staff member, charge things twice, and all kinds of errors can and do happen. But less than 10% of us look at our statement items – and that number is way lower if you get your statement on-line!

There is a phrase you need to know. It’s called post transactional marketing. You buy something from a retailer on-line, or join a web site. Often you’ll get a pop-up asking you to join a loyalty program for deals, alerts, or whatever. Be careful, because in many instances, these pages look like they come from the retailer, but they’re third parties, and deeply buried in the fine print is a note that you’re actually going to have a monthly fee charged to your credit card! And it’s not small business, but the 1-800 Flowers, Barnes & Noble, airlines, Priceline and buy.com sites!

Be careful, as these marketers have scammed people out of over $1.5 billion so far, Facebook has now been hit with a class action lawsuit, alleging that they allow, promote, or profit from these post transactional marketing, and the U.S. Congress is holding hearings on the issue.

Some New Insights You Should Know From the Past Week

You know I’m not a fan of the credit card business, but big credit goes to Capital One who recently had an insert with statements. No, not the usual mice print, but a colour flyer discussing over limit charges and how to avoid them. It also had an intelligent section on how to set up pre-authorized debit with your bank to make sure at least the minimum payments are made every month.

Payday lenders took a big hit last week. There are a bunch of class action lawsuits filed in a number of provinces about their interest rates. The industry went to the Supreme Court who just rejected their arguments to get these lawsuits dismissed.

Scotiabank just launched a rather interesting mortgage promotion. Now I have to confess I used to be a fan of Scotia. In fact, I’ve probably sent them millions of dollars of business over the years. But that was before I had a number of personal nightmares with them. But this one might be worth checking out: It’s a 1 year fixed rate mortgage offer at 3.25% and then the customer will have the option of a five year fixed rate at posted retail rates less 1.25%. Even if you don’t consider the Scotiabank it shows again that it’s pretty easy to haggle on rates and you should get 1 to 1.25% off the posted rates elsewhere, too!

The size of Canadian Banks: Sometimes you don’t have to grow to get bigger. As of right now, TD/Canada Trust is actually the 5th largest bank in the world and the Royal has also made the top 10. They didn’t really grow much but all those mega U.S. banks have shrunk a lot. Citibank used to be worth $270 billion two years ago, now it’s 2%, or $5 billion.
Last one: It was a great and VERY lengthy report from Wall Street Watch. If you ever want the insights of how we got to the current financial and housing mess we’re in it is well worth the read. Here’s the highlights:

$5 billion in political contributions bought Wall Street their total freedom from regulations and restraints in the last decade.
The report goes through a dozen deregulation steps that got us here.

The financial industry has almost 3,000 lobbyists in Washington. How many does Joe Average have? Right – none. So guess who has the influence on congress and the laws that are written – or not written?

High Tech Credit Cards Are On the Way

Finally, credit card issuers are coming out with technology that isn’t from the 1960s and hasn’t changed since the invention of the cards.

They’re changing from the current swipe card with a magnetic stripe to a pin number and chip-type card. For the transition it’ll still have that old magnetic stripe, but also an embedded microchip.

These new cards are already being issued. The Royal is putting them out and remember I told you about a super cool Capital One 6.9 fixed card? I got it with the microchip today. As merchants get new point-of-sale terminals you’ll insert it and use a PIN number just like your debit card. So no more slip to sign because your PIN number is your identification.

What it’ll do is to drastically reduce the $300 million in credit card fraud. Now most of the time when merchants haven’t taken the basic steps, they’re liable for the fraud charges. The rest of the time, the card issuers eat the loss. Until now, that loss hasn’t been as expensive as converting the cards.

No, they’re not doing the conversion because they have much interest in identity theft or helping you. On fraud, you’re also not liable for any of the phony charges. Never have been. They’re doing the conversion because it’s going to be cheaper for them to convert to the new cards instead of seeing the fraud amounts increasing each year.

It’s been in use in Europe for a very long time but the conversion and rollout in Canada will be slow. If you get the new cool card it’ll work exactly like your old one did until all merchants have the new point-of-sale machines where you insert the card, not swipe it. It’s just that this new card has a little chip in it.

This year, about 4.5 million of these will be in your hands. By October 2010 it’ll be fully implemented, because about 90% of all cards will have expired and replaced.

What this’ll also start is a huge wave of contact-less cards that are NFC enabled. For tech people, that’s Near Field Communication. Nokia will have it in their cell phones next year and by next summer, Rodgers will be doing their trial a trial. It’ll let you just wave it past a merchants’ scanner and pay for something. It’ll be exactly like the Esso and Shell payfast keyfobs but it’ll be your Visa or MasterCard.

In all this, you still have to remember why they’re doing it. It’s never to help you but to get you to use your card a whole lot more. And especially in the small-ticket purchases that add up to tens of billions of dollars that card issuers really want a huge piece of!

After all, we spend almost 20% more when we use a credit card instead of cash. Mark my words: Two or three years from now the percentage of small-ticket purchases on credit card will be way up. Card issuers will get richer and you’ll go further in debt so this is not a win-win arrangement, trust me.

What’s In Your Wallet?

I hope by now you know my attitude towards credit card balances: Avoid them like the plague, because they’re a huge killer of your cash-flow and rob you from being able to put that money towards savings.

But I also know that stuff happens. And if you’re going to carry a credit card balance, here’s a new card promotion that just came out:

If you got a cool looking black envelope from Capital One, it’s worth digging out and looking through. Capital One has come out with a rate of 5.65% for a three-year term. After that, it’ll go to prime plus 0.9% and the card has no annual fees – that’s a BIG bonus!

As credit cards go, that’s about the best there is. Now it’s not for everyone, because they’ll be looking for an above-average credit score. I’m guessing 720 or higher. It’s not available on-line so you need to have the junk mailer or a reservation and access code if you are on the internet, or you can call their customer service 800 number and see if they’ll let you apply. On-line you’ll get an approval back in three to five seconds. It’s purely based on your credit score.

Customer Service number to call: 800 481 3239
Ask for the Prime plus 0.9% Platinum Card
If you’re on-line: go to: www.getmycard.ca and try using:
Reservation Number: 0010396010736445
Access code: 010603

Part of the reason for this great deal is that Capital One as well as MBNA and JP Morgan Chase aren’t part of the “big five no-service banks” and so they don’t have the access to millions of bank customers to market to. They have to get customers the hard way – one at a time. OK, other than JP Morgan Chase who handles the Sears Cards.

And one more thing: Don’t think Capital One is just a little player. They’re the ones with the endless commercials on U.S. channels: “What’s in your wallet.” And their CEO, Richard Fairbanks two years ago made – are you ready: $280 million in pay for a year.

Yes, there’s big money in credit cards. Unfortunately – it’s your money.