Did you open a new credit account only to find that your new Capital One credit card is restricted?
There are a number of reasons this could have occurred, and in many cases, there are easy steps you can take to ensure you can use your card.
Let's take a closer look at the reasons why your card might be restricted and some common solutions that could help you regain access to your credit account.
Getting a new credit card can be exciting, but seeing that your card is restricted can be quite concerning. When it says that your account is restricted it means that it is suspended.
Before you start to panic, it's important to recognize that a suspended or restricted account doesn't mean that your account is closed. It just means that you won't be able to use the card or account until the restriction is lifted.
Are you thinking about applying for a new credit card? Make sure you look at our posts about getting a credit card before applying for a home loan and how a new card impacts your credit score.
Credit card restriction or suspension isn't something that just happens with Capital One cards. It can happen with any credit card issuer.
Some of the most common reasons for a restricted card include:
If you haven't used your card at all yet, though, none of these should apply to you. In that case, it might be that your account isn't yet activated or that there is a technical problem happening on Capital One's side of things.
If your Capital One card is brand new and your account is restricted, there's a good chance that this is simply because your card is new.
Capital One can restrict accounts until new credit cards are activated as a way to protect your account from fraudulent activity. For example, if someone else got a hold of the card Capital One sent you in the mail, without restricting your account it's possible that an identity thief could start making charges to your account.
If you just recently received your Capital One credit card and you haven't yet activated it, there's a good chance that activating the card will remove the restricted status from your account. If you activate the card and it is still restricted, you'll want to contact Capital One customer service.
Another possible explanation for a new Capital One card that is restricted could be that Capital One is dealing with a system error or a network outage. If you are sure that your account is in good standing and that there shouldn't be any signs of suspicious activity, there's a chance it's just a problem on Capital One's end.
Before trying to troubleshoot other issues, you can give Capital One a call and try and determine if they are dealing with technical problems. It's possible that solving the problem is just a matter of waiting for them to resolve the issue.
Is Capital One showing up on your credit report and you're not sure why? Check out our guide to what COAF means on your credit report.
If you've been using your new card for some time and all of a sudden, your account is restricted, another possible explanation is that Capital One has flagged purchases that they find suspicious. Suspicious activity can include purchasing activity that isn't in sync with your normal spending patterns.
For example, if there are several unusual transactions on your account in a short period of time, a very high-dollar amount purchase, or a purchase overseas, Capital One might restrict your account out of concern that your credit card information has been obtained by a fraudster.
If you're traveling abroad and your card is restricted all of a sudden, it might be that Capital One is concerned that someone has gained possession of your card or your information. You'll want to contact them to let them know that you're traveling and that the purchases are being made by you so you can regain access to your account. A particularly prudent move would be to call them before you leave town so you can give them a head's up that you'll be traveling.
Have you missed payments, made late payments, or gone way over the credit limit of your new card since you've been using it? If so, it's possible that these repeated violations of the credit card's terms have resulted in your account being restricted.
There are a number of different ways you can violate the terms of your agreement, but regardless of the cause, you'll want to try and determine the specific cause and rectify it right away. If you've missed a bunch of payments, for example, Capital One could eventually charge off your account. This means that the account is closed and passed off to a debt collector, both of which are going to be harmful to your credit.
When it comes to spending more money than your credit limit, it's worth noting that many card issuers will let you spend a certain amount more than your limit and maybe charge you a fee when this occurs. If you do this over and over again, they might restrict your account.
Have you been dealing with financial problems that led to less than ideal credit? Start cleaning up your credit report with our guides to removing collections, evictions, hard inquiries, and charge offs from your credit report.
Whether or not you can reactivate a restricted card or a suspended card depends on the credit card company, the circumstances that led to the restriction or suspension, and other factors.
You might want to take a look at your credit report to take a look at the status of your account and what's been reported. You can receive free copies of your credit reports through AnnualCreditReport.com, which is the site created by Experian, Equifax, and TransUnion and authorized by Federal law.
What should you do if your account is restricted? Here are the steps you'll want to take.
If your card is literally brand new and you haven't used it yet or even activated it, try to activate your card using the information on the sticker on your card. If you haven't received your card yet, you'll need to wait until you receive it to activate it. After all, you wouldn't want your activated card out there in the mail before it's in your possession.
If your card is already activated or activating it doesn't seem to help, the next step is to call Capital One customer service.
The customer service number for Capital One is 1-800-CAPITAL (1-800-227-4825). A representative will be able to inform you as to why your account has a restricted status and what steps you need to take to remove the restriction.
Once you give the customer service agent your information and verify your identity, they will be able to give you more information about your specific account. Make sure you confirm with them the actions you'll need to take in order to have your account restored before getting off the phone.
For example, if the restriction is due to having a balance that is over the credit limit, they might state that you need to pay off enough of the card so that what you owe is less than your total credit limit. Once you do that, your account will likely no longer be restricted.
If the restriction was caused by late payments, you might be able to make a specific minimum payment in order to have the restriction removed. No matter what the reason behind the restriction is, ask the representative about the time frame regarding when your account will be back to normal.
Dealing with a restricted card can be pretty frustrating, particularly if you're trying to make a purchase. Luckily, there are a number of things you can do to reduce the likelihood of ever having to deal with an account restriction.
If you end up spending more money than you are allowed via your credit limit, it could result in your account becoming restricted.
To avoid this outcome, make sure you regularly monitor your credit card spending as well as your balance. You can easily see how much money you have left before reaching your credit limit.
If you expect that you're going to need to spend more than the credit limit and you have had a good history with your issuer, you might consider asking for a credit limit increase. This can result in a slight ding to your credit if they run a hard inquiry to make sure you meet the standards. However, inquiries usually only negligibly impact your credit in the long run.
A number of credit card issuers offer fraud and security notification services. This means they will send you a notification or a message if any account activity comes across as suspicious.
Capital One and other card companies might restrict or suspend an account if they think it might be being used fraudulently. For example, if there are unusual purchases or large purchases made that are out of the ordinary for the account, they might freeze it to ensure no further fraudulent activity occurs.
Signing up for one of these services can help you know as soon as possible if Capital One thinks that activity on your account is suspicious. This can allow you to contact the card issuer and sort the situation out if it was, in fact, you who made the purchases. If it wasn't you, you'd want to know so that you can take the necessary steps to avoid further fraudulent activity.
If you miss too many payments, your Capital One account (or any other credit card account) could be permanently suspended.
It's essential to make payments on time if you're going to have credit cards, as missing payments can absolutely wreak havoc on your credit score. A certain number of missed payments in a row can result in your account being charged off and passed to a debt collector. To keep your credit report and score in good standing, make sure you're always keeping up with your payments.
Credit card companies might also restrict an account if purchases are all of a sudden being made in a different country than where you live or a place that is otherwise far from your home. This is a fraud prevention technique, but it can be frustrating and stressful if you're actually just on vacation trying to use your card.
Many credit card companies allow you to give travel notice using their website on mobile app if you're planning on taking a trip far from home. This can ensure your card won't be declined when you try to use it in a different state or country.
While you aren't required to tell your credit card company if you're traveling, it can help save you some hassle to alert your card issuer about your plans.
If you're traveling to a different city not terribly far from where you live, you probably don't need to set a travel notification with your issuer. However, if you're traveling out of the state or out of the country, there's a chance your card could be declined unless you let them know ahead of time.
You can also call up Capital One to let them know if you're planning on making an unusually large purchase. The same goes for any other card issuer-- Capital One isn't the only company that restricts accounts.
For example, maybe you have always only used your card to buy gas for your car. This month, though, you're planning on using it to buy new appliances for your kitchen, all on the same day.
Consider giving your credit card issuer a head's up when you're planning on making an unusually large purchase. This can help ensure that your card isn't restricted due to being flagged for suspicious activity.
When your account is restricted or suspended, it can be pretty inconvenient. At the same time, you might worry that it's going to destroy your credit score. Will it have any impact on your score?
The answer to this has to do with the reason for the restriction and whether or not you will be able to reopen your account. If your account is permanently suspended, there's a possibility this could lead to the account being closed completely.
Having a credit card account closed can impact your credit score in two primary ways:
Beyond that, if your account was restricted or suspended because you stacked up a number of late payments, it will also have a negative effect on your score. This is because payment history is a big part of your credit score. Additionally, any missed or late payments are going to show up as derogatory marks on your credit report for up to seven years.
All that being said, if your account wasn't restricted because of late payments or isn't going to be closed for good, a restricted card shouldn't hurt your credit.
Getting a new credit card only to find that it's restricted is pretty frustrating. If you've never used the card, it's possible that you just need to activate it. If you have used the card already, reasons for a restricted status include a balance that's over the credit limit, suspicious activity on your account, several late payments, or a technical problem on the part of Capital One.
Either way, though, the best course of action is to call the card company to try and figure out what's going on. There's a good chance there is a quick fix to the problem-- whether that's activating your account, paying down a high balance, or something else-- so that you can start using your card again.
Are you on a mission to improve your credit so you can have lots more financial opportunities in the future? If so, make sure you take a look at our Credit Building Tips blog for tons of resources that will help you get in great financial shape.