Capital One account changes

By Mark Price
This item appears on page 14 of the October 2012 issue.

As someone who takes advantage of the Capital One no-foreign-transaction-fee credit card, I was excited to read from many sources in the September ’12 issue (page 38) that Capital One had a high-yield money market account with a debit/ATM card with no foreign transaction fee.

I went online but could find no way to apply for such an account, so I called Capital One and was informed that Capital One had purchased ING a couple of months previously, and Capital One no longer offers such an online account.

Customers are directed to the ING website to open an online account and receive a debit/ATM card. Unfortunately, ING charges foreign transaction fees.

Wynnewood, PA

Editor’s note: ITN contacted Capital One regarding the recent changes and was provided the following information.

Capital One acquired ING DIRECT USA in February.

Regarding debit cards, current Capital One Direct Bank customers, including those with money market accounts, continue to incur no foreign transaction fees on international transactions, whether ATM withdrawals or debit card purchases.

These accounts have not changed with Capital One’s purchase of ING DIRECT; however, new bank customers wanting an online-only account are directed to ING DIRECT. ING DIRECT charges a 2% international transaction fee on debit card purchases and on international ATM withdrawals. Accounts are not charged an ATM-usage fee in any case, whether using an All-Point network ATM or an out-of-network ATM in the US or internationally.

For customers who live near a Capital One Bank branch, a Capital One High Yield Free Checking account incurs NO international transaction fees on debit card purchases nor on ATM withdrawals, and it reimburses any ATM fees charged by other banks up to $15 per month.

A High Yield Free Checking account can be opened with a balance of $500. Its interest rate is five times higher than the national average. Customers must maintain a combined balance (checking, savings, money market, CD and/or brokerage) of $5,000 or have a home loan in good standing. There are no fees associated with this account; however, customers who do not maintain the balance of $5,000 for an extended period of time “will be moved to a more suitable checking account.”

Regarding credit cards, all Capital One credit cards incur no foreign transaction fees. Capital One does not pass on the 1% fee assessed by Visa and Mastercard on credit card purchases. Capital One absorbs it and does not assess a fee of its own.

A cardholder can use a Capital One credit card to withdraw cash from an ATM outside the US. However, a “cash advance” fee would apply regardless of whether cash is withdrawn domestically or abroad. The standard fee on most Capital One cards is either $10 or 3% of the amount of each cash advance, whichever is greater.