Capital One Credit Card Lawsuits

There is an interesting article over at ProPulica today about Capital One and the number of collection lawsuits it files. The article is titled Easy Credit and Abundant Lawsuits. The facts seem pretty solid, but it is interesting in that it really depends on how you look at the information about how and where the bad guys are.

Capital One Credit Cards for Low Credit or No Credit

No matter where you search on the internet, if you find a reputable credit card rating website or credit card information forum, you’ll eventually find people seeking an answer to the following questions

  • Which credit cards are best for people with low credit
  • Which credit cards are best for people with no credit
  • Which credit cards are best for people with bankruptcy on their credit report

The answer in most of these cases comes down to just one fact, which credit card can you get with bad credit, no credit, or bankruptcy. In almost every case the answer is the same: Capital One.

As it turns out, Capital One is more willing than other banks and credit card issuers to issue cards to people on the lower end of the credit score spectrum. This is not necessarily good or bad, nor is it necessarily a better or worse business model.

capital one credit card lawsuits

However, it isn’t hard to imagine that as the credit card company offering the most credit cards to people with the lowest credit that Capital One has the most defaults, that is, people who stop paying. When you don’t pay your credit card bills, the credit card company will start by reporting your account as late on your credit report, and then delinquent. Eventually, the credit card company will either sue you to collect, or sell your debt to a debt collector. It is a matter of opinion on which of these is actually worse. Debt collectors tend to have very questionable, and often unethical business practices beyond what most banks do.

Other credit card companies are well known for NOT offering cards to people with low credit scores or a bankruptcy. American Express, for example, requires pretty good credit before you can get a card. Chase is known for requiring good scores as well. As you probably guess, they file far fewer lawsuits over credit card collections, likely because they have far fewer customers who stop paying.

Before everyone grabs their pitchforks and heads down to Capital One’s offices, it is important to look at the flip side of this equation. Many financial tasks in America these days are difficult, if not impossible, without a credit card. Travel is especially difficult. Renting a car, checking into a hotel, booking reservations, and more all require either a credit card, or jumping through some hoops.

Since a low credit score or bankruptcy means that you can’t get an American Express card, or some sort of Citibank rewards card, many people would be stuck with no access to a credit card account without a company like Capital One offering cards to them. Many people recommend a Capital One card for people rebuilding their credit after a bankruptcy. If you handle it responsibly, you can even qualify for a lower tier or Capital One rewards.

So, if you are someone working on rebuilding your credit, or building it in the first place, Capital One is probably your best financial ally, as long as you keep paying your bill.

As always, the issue is the same. Collections are rough and unpleasant, and no one likes them. Even the banks don’t like it. It costs money and time to collect debts. Fortunately, avoiding collections is easy. Pay your bills and don’t use your credit card to buy things you can’t afford. Otherwise, you’ll be on the unpleasant side of the personal finance world.

 

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