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Capital One Just Raised My Interest Rate by 5%. Should I Close My Account? – Lori

“Dear Steve,

Capital one just raised my interest rate by 5%. I have never even been late with a payment.

Should I close the account and pay off at old interest rate, or just accept the new terms?


I asked my friend Susan Nilon to answer your question for you. I wanted to make sure you got an answer as quickly as possible as I’m a bit backed up at the moment. I’ll be watching the comments on this question and be around to help if you need me.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Hi Lori,

Without knowing all of your circumstances, I can only give you my initial reaction. 5% interest rate is not too bad of a rate hike. It is not unusual for a credit card company to raise their rates these days. I have seen people with a 7% interest rate end up having it adjusted to at 25% and 37% interest rate…with no option other than to accept it or close it.

That being said, my best advice to you is to put the numbers in front of you to see what it all will mean. Ask yourself these questions:

  1. How does the new interest rate compare to the old one in regard to making the monthly payments?
  2. Do you have the ability to pay down the debt at a faster pace?
  3. If you opted out of the new interest rate and closed the account, you will have a debt to pay. How will that impact your budget when you no longer have that credit card to use?
  4. Do you have another credit card to use?
  5. Can you transfer the balance to a card with a lower interest rate and keep this one open?

If you close the account, it will affect your credit score. But how much it will affect it is depending on what your score is. If you have a really good score, then it might not make much of a difference. But if you have a mediocre to poor score, it could have quite an affect on your rating and future plans.

In the meantime, call the credit card company and see if they are willing to keep the interest rate at the original rate. If your account is in good standing, then they might be willing to work with you.

If you would like to send me more information in the comments section about your credit and monthly bills, I can give you more detailed advice on what to do. In the meantime, being an advocate for your self is your best plan of action.



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About the author

Susan Nilon

Susan Nilon is someone who knows what it’s like to be unemployed and on government assistance. Even with two University degrees, she knows that life can turn on a dime. Starting with no capital, Susan took the first check she received from her client and put it right back into her business. Within a few years, her business grossed over a half a million dollars. Specializing in advice for small business owners and single parents, Susan can offer caring advice from the perspective of someone who has been there and done that.

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