I Am Struggling to Pay My Capital One Debt Consolidation and Other Credit Card Debts. What Options do I Have?
Thank you for your question about your Capital One credit card debt and the best solution for your debt problems. Capital one offers credit cards, home loans and auto loans. Capital One is best known for their credit cards which they aggressively market (What’s in Your Wallet? and Alec Baldwin commercials for double-mileage awards). The majority of the people who are looking for debt consolidation options for their Capital One debt are seeking help with their credit card debt.
When you are working to solve a debt problem, there are steps that you can take on your own. At times, problems may be so severe that they require professional assistance to get the best results.
Contact Your Creditors
Contact your creditor in advance, before you miss any payments. This does not guarantee that they will waive a late fee, not hike your interest rate, or be flexible with you, but maintaining open communication is a smart choice. Find out if they offer a financial hardship program. That may give you some temporary relief. Ask for an interest rate reduction or permission to make a smaller than normal minimum payment.
If your credit is in good standing and you have balances on your any debts you are carrying a balance transfer is another possible capital one debt consolidation loan solution. Make sure you understand the fees that come with the balance transfer and how long the low introductory rate lasts.
Capital One Debt Consolidation Loan Options
Capital One does not offer unsecured personal loans or personal lines of credit. If you have strong credit, you may be able to find a debt consolidation loan from another provider, such as a bank, credit union, or a peer-to-peer lender.
If Capital One or your other creditors are not willing to work with you, your best debt relief solution may be to work with a professional debt relief organization. Look into both credit counseling and debt settlement. Before you choose the right way to solve your debt problem, it can be very important to understand how your specific creditors work with their customers. That way, you can plan the most effective strategy for getting out of debt.
Bills.com’s editorial staff has done extensive research to provide you with some specific facts about Capital One and how it deals with accounts enrolled in debt relief programs.
Capital One Credit Cards & Credit Counseling
If you enroll a Capital One account in a credit counseling’s debt management program, you should expect:
- A monthly payment that is 2.00% of your account balance
- A minimum monthly payment of $15
- An interest rate of 6%. If your rate is at or below 6%, not only is there is no reduction, but your rate will be increased to the 6%. If you have a card with an interest rate below the one the DMP will put in place, you can try keeping the card out of the program, but most DMPs require you to place all of your cards into their program.
Capital One & Debt Settlement
Consider debt settlement to resolve your debt, if you are in a serious financial hardship. Debt settlement is an aggressive form of debt relief that’s designed to get you out of debt in 24-48 months. For a debt settlement program to succeed, you need to make a monthly program payment, which is usually significantly smaller than your required minimum monthly payments.
Bills.com reviewed hundreds of settlements reached by professional debt settlement negotiators for the client’s Capital One accounts. The average settlement negotiated was less than 50% of the balance that the clients enrolled in the settlement program.
You are free to negotiate directly with your creditors, if you feel you can do so successfully. However if you are not confident that you have the skills, nerve, and time to handle back and forth negotiations with debt collectors, consider hiring a reputable and experienced settlement company. Only hire a settlement firm that doesn’t charge up-front fees. Bills.com recommends choosing a debt settlement firm that is a member of the AFCC (American Fair Credit Council) and has debt consultants that are accredited by the IAPDA International Association of Professional Debt Arbitrators).
If you default on any of your Capital One accounts, or with any of your other creditors, and you are unable to work out a solution with them, you will end up in collections. Not every creditor treats all their delinquent accounts. Even the same creditor may treat individual customers differently. However, there are some basic strategies and practices that Capital One and other creditors use when collecting on delinquent accounts.
General Collections Practices
- Most creditors first attempt to collect a debt internally. If not successful, they refer the account to an outside collection agency or a law office for collections.
- Some creditors have in-house legal departments to collect on the debt, though that is becoming less common.
- In general, accounts are referred for legal collections after they are somewhere between six and nine months delinquent, depending on the creditor.
- Your recent activity on your account can affect the collection process. Some creditors pay close attention to your specific account activity, when deciding whether to pursue legal collections. For instance, large recent purchases may cause a creditor to pursue collections more aggressively.
- Eventually, your account may be sold to a debt collector. Creditors that are unable to collect anything after your capital one debt consolidation program has been contracted to a law office usually sell the debt to a debt purchasing collection agency. This frequently happens approximately 18 to 24 months into the collection process.