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Pay Down Credit Card Balances or Save to Settle a Charge Off?

New Visitor

Pay Down Credit Card Balances or Save to Settle a Charge Off?

should I pay down my open credit card balances  $1412 @ 27%      - limit $1500
                                                                                $3324 @ 18.49% - limit $3400
 
or
 
Save to settle an old charge off of approx. $4200 ?
 
Which would get my Credit Score higher quicker?
 
 


Message Edited by ThaChosen1 on 07-10-2007 02:24 PM

Message Edited by ThaChosen1 on 07-10-2007 02:25 PM
Message 1 of 17
16 REPLIES
Established Contributor

Re: Pay Down Credit Card Balances or Save to Settle a Charge Off?

i would pay down the credit card accounts, especially if the charge off is going to drop sometime soon.
Message 2 of 17
Senior Contributor

Re: Pay Down Credit Card Balances or Save to Settle a Charge Off?

What dog said. Your util is over 95% and that is risking a rate jacking from your CCC.
 
18.49% could shoot up to 27% or more, like that.
 
Get it down under 50%. Preferably under 30%. Ideally between 1 and 9%.
Message 3 of 17
Established Contributor

Re: Pay Down Credit Card Balances or Save to Settle a Charge Off?

If your account has never been late and been in good standings, I don't think CC company would "settle" the account with you.
 
Now, if you haven't paid them for a couple of years or so, then they might settle with you. But even then, you should try a PFD if your accounts are derog.
Message 4 of 17
Established Contributor

Re: Pay Down Credit Card Balances or Save to Settle a Charge Off?

and indeed, i agree with Noah that the 18% can easily shoot up to even higher rate.
Message 5 of 17
Senior Contributor

Re: Pay Down Credit Card Balances or Save to Settle a Charge Off?

Once you pay down some of that $4736, try to leverage a CLI and APR reduction.
 
Maybe you can get $1K to $2K CLI, and perhaps pickup another $5K in new CC CLs.
 
That should give you $11K or $12K total CC CL.
 
That $4200 CO could get settled in a PFD for considerably less than the full amount.
 
Message 6 of 17
Valued Contributor

Re: Pay Down Credit Card Balances or Save to Settle a Charge Off?

Personally I would pay off the charge off's first but still keep your current accounts in good standing.  The longer you let the charge off's go the more likely hood they will fall into the hands of collection agency's if not already and the double ding from both the OC and CA will hurt your score far worse than your utlization and plus you have to worry about the OC or the CA taking it a step further and seeking a judgment in order to collect.
Message 7 of 17
Senior Contributor

Re: Pay Down Credit Card Balances or Save to Settle a Charge Off?



ThaChosen1 wrote:
Save to settle an old charge off of approx. $4200 ?
 
Which would get my Credit Score higher quicker?


Paying down your CC debt would definitely raise your FICO scores the fastest.
 
Paying the old CO might actually lower your FICO scores short term and won't help them long term--unless you get a PFD.
 
How old is the CO? Do you know whether it's out from under the SOL?
 
Message 8 of 17
New Visitor

Re: Pay Down Credit Card Balances or Save to Settle a Charge Off?

The last payment on the charge off was in March of 2005.  I believe the SOL is 5 years.
I would PDF them if I had the money saved to make them a decent offer.
 
I appreciate all the reply's given so far.
 
Also, I keep getting collection calls for this account saying I need to call them that day by 8pm
I haven't answered or returned any of their(Global Acceptance Credit) call's.
Should I continue to ignore them if I have no money to give them at the moment?


Message Edited by ThaChosen1 on 07-13-2007 01:30 PM
Message 9 of 17
Senior Contributor

Re: Pay Down Credit Card Balances or Save to Settle a Charge Off?

Message 10 of 17