Capital One Payment Plans

If you’re looking to work out a payment plan with Capital One, chances are you’ve already fallen behind with them. Whether your delinquency is due to suddenly higher interest rates, an emergency of some sort (that you didn’t have an emergency fund saved up to cover), or they suddenly raised your credit limit by over 300% and you took it as an invitation to go on a shopping spree (as was what happened in my case), that debt will NOT go away unless you are proactive about it. You might be so far behind on your payments that they’ve sent your account to a collection agency. If that’s the case, what follows are some helpful tips on digging your way out. I know from experience, as this is the path that I went down with dear old Capital One.

1. Answer the phone!

Nothing will get solved when you ignore the problem. If a collection agency is calling you on a daily basis and you aren’t answering the phone or returning their calls, they will continue to call you on a daily basis. Several times a day. To no end. One of Capital One’s favorite collection agencies is Global Credit & Collection. They will show up on your caller ID as either their 800 number, or simply “416.” I’ve always found the 416 peculiar, but at least that way I knew straight off who was calling, as it was much easier to remember than an 800 number out of many calling for various purposes.

Global typically leaves real live messages on your voicemail, with the usual urgency about an “important matter” that you would get from any other collection agency. The good news is that their agents are for the most part pretty friendly. I’ve dealt with at least four different people there, all of whom have been quite pleasant to talk to. I have seen reports elsewhere on the web, however, of experiences on the other side of the spectrum. Even if you do get stuck with, well, a total prick, it will be much quicker and easier for you to just get it over with already and work something out.

2. Set a monthly payment

The initial monthly payment will probably be much lower than what it would normally be if your account with CapOne were still open. That’s kind of the point – if you couldn’t pay that much before, you probably can’t pay that much now, either. It might not even cover the interest accruing on your account, but that’s okay. As long as you’re giving them something, you can both work from there in the future.

For example, my first monthly payments via Global were $100, whereas at the time my account was accruing $102 in interest every month. Thus, my balance essentially remained level, which kept the interest charges from growing larger and larger. Your initial agreement will probably be for six months, and they’ll insist on your checking account information so that they can withdraw the payment automatically. That doesn’t sound too appealing for some, but for all I know it might be the only payment option (I didn’t ask). It certainly is the easiest, though, as you don’t have to send any checks in the mail.

3. Follow through

Throughout the course of your payment plan, you obviously need to pay attention to your checking account balance, to make sure it doesn’t overdraft. My payment generally posts to my account 3 or 4 days after the agreed upon payment date, but don’t bet on that. Also, don’t bother looking for it in your “holds.” It won’t show up there.

4. Follow up

Expect the agency to come calling again in about 5 months. Answer the phone! Obviously, they want to extend your payment plan by another six months. That’s fine, but it gets better. They might tell you right off the bat that they want to cut your interest rate to zero. Sounds fishy and probably too good to be true, but they’re not lying. Of course, they’ll want you to increase your monthly payments in return for such a good deal. I doubled my monthly payment from $100 to $200 to take advantage of this – it’s well worth it! Not only will you eliminate your debt faster with the larger payments alone, but you’ll also save yourself thousands of dollars in interest charges.

5. Follow up… again

I recently got a few voicemails from the agency’s “finalization department.” It’s well before this current six month term runs out, but I’m looking forward to hear what they have to say when I finally get back to them, and will update this post accordingly when that time comes.

6. Important things to remember

Don’t forget that this is your debt. You borrowed their money, and you have to pay them back somehow. As much as people hate dealing with collection agencies, they’re probably your best bet to get yourself back on track. Throughout all these dealings, you will not get any statements from neither Capital One nor Global Credit & Collections. If you want to keep track of your balance, you can do so in a special area of CapOne’s website at http://solutions.capitalone.com. If you are as fortunate as I am to get the 0% interest, you’ll get a letter in the mail from Capital One confirming it. It’ll take about a week for your account to stop accruing interest on a daily basis, from what I observed with my own account balance, so don’t freak out right away. But above all else, keep in mind these four simple words: YOU CAN DO THIS!

7. The road to payoff

A full year after making my first payment arrangements with Global, I got another call from them. This was to make my payment plan permanent until the debt is completely paid off. At my current payment of $200/mo, and a balance of about $6,500 (down from it’s high of over $8,000), this will result in a payoff in 33 months. That’s much faster than you’d get that card paid off just making minimum payments with a high interest rate on top of it! However, you can make that glorious day come even faster by making extra payments through the aforementioned website. In any case, if the payment plan has been going well for the past year, you should be just fine accepting this agreement. You’re well on the road to recovery from the scourge known as Capital One at this point. Congratulations!

If you’d like to share your story dealing with Capital One, Global, or any other CapOne collection agency, please do so in the comments, I’d love to hear about it, as will future readers. Also, feel free to subscribe to my blog via your favorite RSS reader to follow my journey out of debt.

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