Capital One Interest Rate Cut To Zero!

Remember that “IW option” we were all wondering about? Well, it turns out it was a deal to cut my interest rate down to zero in exchange for making larger monthly payments. Got a call from the good old “416″ on my cell phone while at work (apparently they learned not to call me in the morning as obviously I’m sleeping). Luckily I was close enough to the door (a good 50 feet) to actually recieve the call, so I ran outside and answered gleefully. Remember, this is the collection company that I tried to ask one of the reps out on a date. Anyway, it turns out that my rate was actually 16%, not 23.15% as I had previously thought.

While she didn’t say as much, it was pretty obvious by her asking if I could make larger payments right after telling me they could kill the interest rate that that was the catch. However, I was perfectly fine with this – I wanted to make bigger payments anyway, remember? I also told her as much, and offered to make $200 payments, which she readily accepted. So now, I’ll be paying that through December, at which point I expect them to start calling a month or so beforehand again asking if I can make larger payments. Not sure what else they could have up their sleeve to make it more appealing to me now that they’ve done what they did (maybe offer to knock my balance down a couple thousand?). I’m sure they’ll educate me on how much faster I can pay off the debt with larger payments.

All this really makes me curious to know who actually owns the debt now. Capital One, or Global Credit & Collection? I suspect that latter. For one, I highly doubt that if CapOne still owned the debt, that they would allow such an interest rate cut. A collection agency buying the debt for pennies on the dollar is making plenty of money as it is without any pesky interest rates, and they probably just keep the interest accruing long enough to make offers like the one I accepted, for the sake of bringing in larger payments.

I’m aware that if I were to manage to be able to save up a good percentage of the debt, say half ($4,000), I might be able to settle it. However, the chances of me making payments on the debt and being able to save up such a large amount of money are slim. Well okay, not really, but it would take quite a long time. However, just on moral grounds (if you want to call it that), I’m just fine with paying the full amount. I spent that money and I’ve got the big screen LCD TV to prove it (among other things). Nobody owes me anything, I did it to myself, and that’s that.

The change in terms results in CapOne being paid off 3 months sooner, everything coming before it in the payoff schedule being paid off a month or 3 later, and an overall payoff of 2 months sooner (currently showing February 2014). I now have a long night ahead of me retooling my budget to make these larger payments right away, instead of delaying them as I had planned.

P.S. Last week’s post entitled A Firm Goal (Finally!) was featured in the Carnival of Debt Reduction. As an added bonus, I’ll be hosting the carnival right here on Debt Sucks on June 1st – my very first carnival, so let’s hope I don’t screw it up too much!

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Related posts:

1. Payment Reversed, Interest Rate Lowered
2. Today’s New Plan
3. Payment Plan Worked Out With Capital One
4. Capital One is Awfully Uncooperative
5. Capital One Year-End Summary

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