Can you Get Another Capital One Card if you Previously Had a Charged-Off?

Can you Get Another Capital One Card if you Previously Had a Charged-Off

If you previously had a charge-off then it will be very difficult for you to get another Capital One credit card. The thing is Capital One doesn’t depreciate any charged-off, so if you want to get a new Capital One card then you have to settle the balance on your charged-off Capital One credit account. Your charged-off account might no longer be listed on the credit bureaus but Capital One has its internal record that it checks before approving any credit application!

What is Credit Card Charge-Off?

What is Credit Card Charge-Off

If you have a credit card then you might be familiar with the term charge-off. If you don’t pay the credit card bill for 180 days (6 months) then the credit card issuing company will stop your account from making additional charges and list your account as a charge-off. The credit card company might write off your account for bad debt for tax purposes but if you don’t settle the debt then it will remain on your credit report and it will badly affect your credit score! Moreover, Charged-off doesn’t mean you’re off the hook. Though the credit card company considers a charge-off a loss but you are still responsible for paying back the debt. Another important factor about charge-off is; that it will remain on your credit report for up to seven years from the date when your missed payment was reported.

How Does Charge-Off Impact Credit Score?

When you fail to pay the credit card bill for at least 6 months or more, the credit card company reports the account as charged off to the credit bureaus. Charge-off put a derogatory mark on your credit reports. Moreover, if your debt is unsecured then the credit card issuing company can sell your charged-off account to a third-party collections agency. If it happens then the charged-off account will appear as an account in collections on your credit report! If this happens then it will badly affect your credit report and it will become more difficult for you to qualify for credit or get competitive interest rates. A charged-off account means you already have several missed payments. These missed payments are more than enough to damage your credit score because payment history is a major credit scoring factor. But, your credit score will more suffer if your account is charged-off. On the other hand, if your credit card account is in the collection then it will continuously affect your credit score because the collection agency will regularly report missed payments to the credit bureaus!

Should you Pay a Charged-off Credit Account?

Whether you should pay the charged-off credit account or not depends on quite a few things. The first thing you have to do is find out if the charged-off account is accurate. You have to verify the information before paying a charged-off account. Below are a few things that you should check before settling a charged-off account – 

  • First, you should check whether your account is sold through third-party collections agencies or not. You have to ensure that your sold account is marked “closed” and has a zero balance. Usually, the most current collection accounts are remained open.
  • Then you should check the due amount; if the outstanding balance is more than what it should be then ask the card-issuing company if any additional costs are added or make the correction of the due amount.
  • You should also verify the charge-off date of your credit account. The charge-off date must be the date of your first delinquent payment on the credit card account.

After considering the above facts if you find out that the charge-off is legit then you have to take immediate action. You have to make the payments as long as the debt is yours. But, you won’t have to pay the debt if the debt is – 

  • Paid
  • Settled, or
  • Discharged in a bankruptcy filing           

On the other hand, if the charge-off is an error then you can file a dispute on your credit report. If you file a credit report then the credit bureau will review it within 30 days of the filing date.

How to Pay a Charged-off Account?

How to Pay a Charged-off Account

There are many ways you can pay a charged-off account. If you are wondering how to pay a charged-off account then check the below information!

1. Work with the Original Lender

You have to find out whether your debt is sold to a collections agency or not. If your debt isn’t sold out then you will have the chance to work with the original lender. You can contact the original lender and try to make a payment arrangement. If you can pay off the debt then the lender will change the status of the account to “paid charge-off” and finally update the balance to zero.

2. Settle the Debt

You can try to settle the debt with the original lender or the collections agency. If you settle the debt then you will be able to pay less money than the original debt. However, you should keep in mind that if you settle the debt then it will appear on your credit reports as a “settled” charge-off. It still will affect your credit score but not as much as a charged-off account. 

3. Pay the Collections Agency

If your charged-off account is sold by the original lender to a collection agency then you can pay the collection agency. However, before paying a collection agency check valid proof that the agency legally owns the account. Once you have paid off the debt, the charged-off account will appear on your reports as “paid collection.” This is much better than an unpaid account.

7 Best Credit Card Options with an Old Charge-Off

Best Credit Card Options with an Old Charge-Off

1. Capital One Platinum Secured Credit Card

  • No annual or hidden fees
  • A refundable security deposit starts at $49 and you will get a $200 credit
  • Increase your credit limit within 6 months without an additional deposit
  • $0 Fraud Liability

2. Surge MasterCard

  • You can get a credit limit of $1000
  • You can increase the credit limit within 6 months and make it to $2000
  • You will have free access to Vantage 3.0 score From Experian
  • Monthly report to three major credit bureaus

3. Reflex MasterCard

  • Pre-qualification process without impacting the credit score
  • You will have an initial credit limit of $300 – $1,000
  • Monthly report to three major credit bureaus

4. Indigo Unsecured MasterCard

  • Pre-qualification process without impacting the credit score
  • You can qualify for this credit card with a moderate credit score
  • Fraud protection available for stolen or lost cards
  • Monthly report to three major credit bureaus

5. Bank of America Customized Cash Rewards Secured Credit Card

  • You will require a $300 security cash deposit to get this card
  • Unlimited 1% cashback on various purchases
  • 3% cashback in the following category:
  • Free monthly Fico credit score update
  • $0 annual fee

6. Capital One Platinum Credit Card

  • Fraud protection available for stolen or lost cards
  • You can apply for a higher credit limit within 6 months
  • No annual or hidden fees
  • Monthly report to three major credit bureaus

7. Capital One QuicksilverOne Cash Rewards Credit Card

  • Unlimited 1.5% cashback on all types of purchase
  • You don’t have to sign up for rotating categories to earn cash rewards
  • $0 fraud liability if your card is lost or stolen
  • $39 annual fee

FAQs about Can you Get Another Capital One Card if you Previously Had a Charged-Off

Will Capital One reopen a closed credit card?

Yes, Capital One can reopen a closed credit card but it totally depends on how long the account was closed. If the account has not been closed for a year or more then Capital One can reopen that account.

Can you get another card after charge-off?

Yes, you can get another credit card after charge-off but you might have to pay higher interest rates and fees.

Can Capital One Collections Sue Me?

Yes, Capital One collections can sue you but they can’t have you arrested. If you lost the lawsuit then you have to repay the full debt.

Can a charge-off be removed?

Yes, you can remove a charge-off only if you repay the full debt amount or settle the debt. If your credit account is still active then you can negotiate with the creditor to remove the charge-off from your credit account.  

References:

https://www.capitalone.com/learn-grow/money-management/credit-card-charge-off/
https://www.cardrates.com/advice/credit-card-approval-with-old-charge-off/

Last Updated on August 7, 2022 by Ana S. Sutterfield

Scroll to Top