Closing a Capital One account - beware of their trickery

Riley has a Capital One account that had a balance on it only because it was at a promotional 5.99%. It was a balance transfer that we did a while back. We had just been paying the minimum on it as the interest rate was so low and we wanted to focus our efforts on the higher interest rate cards.

On the most recent statement I noticed a $39 membership fee. Clearly we do not want to be paying any of those! According to the statement, the only way out of the fee was to cancel the card and pay off the balance. So, even though I wanted the money to go towards a higher interest card, I did not want to pay the $39 and called to cancel the card today.

Mario at Capital One tried to convince me that $39 was a small price to pay for keeping the card history on my credit report. While I do agree that I hated having to cancel the card and the effect it will have on the credit score, it is not worth paying Capital One $39 for nothing. And I hate that we have clearly done so in the past and not realized it. If this was a rewards card that we used a lot, it might be worth it!

I managed to convince Mario that I still wanted to cancel the card. That is when I learned about Capital One’s “closing status” and their “closed account status.” See, apparently when you call to cancel your credit card with Capital One it is not closed for 30 days.

According to Mario, Capital One places your credit card account in “closing status” when you call to close the account. The account remains in this “closing status” for 30 days or until the balance reaches zero, whichever is longer.

While your account is in the “closing status” charges can still go through to it. So, if a charge is made against the account, the account automatically re-opens. That means if you had canceled to avoid a membership fee like me, you are automatically charged the membership when the account re-opens and you cannot get out of it at that point.

So, if you are closing a Capital One account - make sure that you do not have any recurring charges set up for the account, or you just might end up with an open account and all those extra fees after all.

image from Guru Jeff’s page of truth