Capital One $50 Bonus for its Cash Back Credit Card
Jul 16, 2007 - 9:02 AM by Ken Tumin
In addition to the 1% cash back, you can earn an extra 25% on the cash you've earned at the end of the year. So this can make it into a 1.25% cash back. Few other nice features of the cash back include: no limit on the cash back, it won't expire for the life of your account, and you can request the cash-back reward whenever you want. The one downside is that CapOne does a hard credit pull from all three credit bureaus (according to a few people in this FW thread).
For those in Central Texas, Capital One still has a good deal on a free checking account with a guaranteed 5% APY for 1 year (see post).
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Justin (anonymous) - #1, Monday, July 16, 2007 - 6:10 PM
Also, Capital One does not report your credit limit to credit bureaus. That actually hurt your credit scores. If there's no predefined credit limit, FICO will calculate your score based on the highest balance you've ever had with this account. So... generally your account will look like always at high percentage of the balance/limit ratio and that makes your score goes down.
Banking Guy (anonymous) - #2, Monday, July 16, 2007 - 7:49 PM
Thanks for the info. So if someone does signup for this CapOne card, would it be better to avoid large purchases on this card to reduce the impact to their FICO score?
Anonymous - #3, Monday, July 16, 2007 - 9:59 PM
No, it would be better to make one huge purchase and pay it off. That way your "high credit" will be a large number and your ordinary usage will be a small fraction of it.
Alternatively, take out a large balance transfer for almost all of your credit limit and quickly pay it down to less than 90% of your credit limit.
Avoiding large purchases will make your high credit amount small which will make your usage ratio very high most of the time.
Anonymous - #4, Tuesday, July 17, 2007 - 10:50 AM
What if I make one small purchase just to get the $50 bonus, pay off the card right away, and then retain the card with a zero balance? Will this show up as a favorable balance/limit ratio then?
Anonymous - #5, Tuesday, July 17, 2007 - 1:52 PM
The objective is to have a low balance/limit ratio. Zero is as low as it can go.
If you pay off the card and stop using it, then you will have a zero ratio which is the best you can get.
But the FICO score looks at both the balance/limit ratios on individual cards and balance/limit ratio on all of your cards combined. If you can make your limit appear higher on the Capital One card, it will make the latter ratio look even better.
In other words, if you make a small purchase and pay it off immediately, both balance/limit ratios will be no worse than if you had never applied for the card. If you make a large purchase and pay it off, the overall balance/limit ratio will look better than if you had never applied for the card.
Anonymous - #6, Tuesday, July 17, 2007 - 2:17 PM
I have 3 credit cards with combined limit of $30000, $10000 limit on each one. Normally, i use only one of the card actively. Generally, no transaction on other cards. Does my FICO score will be better if i use all three of them with small purchase instead of one ? Does all cards are required to be used for favorable balance/limit ratio ?
Fawaz (anonymous) - #7, Saturday, August 18, 2007 - 1:38 PM
Well I got the card under this offer and instead of receiving a $50 "bonus" after first use, they have "charged" the card $50. I googled and found someone else had the same experience. This is nuts - now I have to waste a few hours of my already stretched time battling the Capital One phone maze to get this thing sorted.
Exploring (anonymous) - #8, Sunday, October 7, 2007 - 2:09 AM
Capital One is now reporting available credit. :) The linked Washington Post article goes into more detail.
http://tinyurl.com/29vag2
The advice in the prior comments was excellent when Capital One was not reporting the available credit. However, the advice is no longer applicable and could lower your FICO score.
Boby (anonymous) - #9, Friday, July 25, 2008 - 8:17 AM
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