If you've been paying attention to your credit card statements, then you have probably been making your Capital One minimum payment. You may be surprised to find out that Capital One offers its customers a second chance at making their Capital One minimum payment each month. The program allows customers who are late in making their first payment or who have exceeded their credit card limits an opportunity to pay off their balances without increasing their debt. Unfortunately, this program comes at a cost, and for some people, the cost is too high.
To begin, the primary disadvantage of making a capital one minimum payment is that it doesn't reduce the total amount of your outstanding balance. In effect, the program does nothing to reduce the total amount of the debt, only the interest or fees on the unpaid balance. If you add up the total amount due for all of your balances, including the balance of the second chance program, you might find that the minimum payment still leaves you short. In addition, Capital One requires that the full amount of the second chance balance be repaid before any additional credit card purchases can be made.
In an effort to give borrowers another shot at saving money, Capital One has introduced two new programs that combine the first two steps of the repayment process. First, the subprime discount program offers discounts from the Capital One standard interest rate when the borrower pays off an existing balance using the card's regular credit card features. This discount will apply whether or not you've been able to make your capital one minimum payment on time. Second, Capital One has introduced the new Subprime Selector credit card feature, which allows borrowers with a poor credit history to apply for a card with a lower interest rate and still receive the same discounts offered to applicants with good credit. This option may not be available for everyone, depending on how bad your credit score is.
To be eligible for either program, borrowers need to have at least $1,500 in unsecured debt, and make at least five payments on time each month. If your debt is already more than the minimum payment requirement, you'll still qualify for the Capital One subprimeabetter program, but you won't see the savings unless you make at least six payments. You also have to pay off at least one of the existing balances to join the subprime acclaim initiative. After the first six months, however, all eligible borrowers must settle at least one of the existing cards in order to continue receiving discounts.
The second step of the repayment process is similar to the first and offers similar benefits as well. The second step involves paying off the credit card minimum payment. As long as you meet the credit card minimum payment requirement, you won't see any discounts. This allows borrowers with a low credit card balance to begin rebuilding their credit while paying off their debt. As long as they continue to make at least six monthly payments, they can pay down their outstanding balance and rebuild their credit at the same time.
The third step offers the best rewards and provides a little incentive to continue to pay down the outstanding balance. The third step offers up to a 3% cash back bonus, which is applied to your account balance every month until the full credit card minimum payment is paid off. If you meet the credit card minimum payment requirement, you'll also receive a 1% cash back bonus for every dollar of eligible purchases, which works out to a maximum of three percent.
These programs are both easy to qualify for and beneficial to the borrowers. Capital One offers an easy payment structure to get borrowers started, while the credit card companies continue to provide competitive rates to attract and keep customers. While this might seem like an easy plan, many people struggle to pay off their debts because they don't take the actions necessary to get started. Taking the time to review and consider the repayment plan before you apply can help ensure that you are taking the steps needed to improve your financial situation.
By taking the first step towards financial freedom, you can turn your current debt burden into an opportunity for improvement. Credit card companies understand that many borrowers struggle each month to make the minimal monthly minimum payment. They offer these programs in order to provide borrowers with an option to turn their financial burdens around. For many, this has proven to be an excellent option for getting out from under high monthly payments and increasing monthly disposable income.
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