Also, I agree with the idea of using your credit card as a debit card. I do this with my BofA WorldPoints Visa for the (meager) reward points, and I pay it twice a month.
I haven't used my debit card in months.
I put one item on my Cap1 MC a month and PIF, and I use my Target card every other month and PIF.
"Something to keep in mind that you can still PIF AND let a small balance report by knowing your statement date. Usually your statment date is a week or so after your previous payment due date, so let a small balance report, and then PIF before they charge you interest a few weeks later"
im so confused haha... ok how can u make sure it shows a balance of ur cr. do cc usually post on cr before new statement comes out? been trying to figure it out maybe someone can clear this up for me
Most CC companies provide online access to your account where you can see recent purchases, amount due, available credit, etc. Use the info there to your advantage.
Basically you have your payment due date... pay off say 95% of the balance. That way you've paid on time. Your statement is then typically issued about a week later (again with the online system, most companies will show you previous statements online, just look at the history to find out).
After that statement date, issue another payment for the remaining 5% so now you've paid the full balance, and the CCC has reported a 5% balance to the CRAs.
You would need to be very careful with that as they can report it as Settled or Paid For Less Than Full, etc.
If you are able to negociate a settlement for less, be sure you understand fully how it will be reported to the CRAs and that you get it in writing. (If someone tells you something over the phone that sounds good.... being able to enforce that later will be next to impossible if the person making the deal does not have authority to do it or if they decide to change terms later.)
Regarding your FICO score itself.... PIF vs settled does not make any difference. If your goal is purely for score, you won't be helped by PIF vs getting them to settle for less.
Now... when someone manually reviews your credit report (say for a loan), it will look better for a PIF vs a settlement. The same is true when applying for a CC. They can see if you have had baddies and if they were settled as well.
So ultimately it depends on your goals... remember this is going to stay on your CR for 7 years. Personally if it were me, I would just pay the entire thing off and not deal with the settlement. Considering the relatively small amount of debt, etc... I would just pay it and have it off my conscience.
One thing I'd like to add... The day your cc statement is cut, is the day they send the report to the 3 CRA's. So looking at your online statement...if it cuts on the 27th, make sure any payment you want to make will clear & POST before the 27th.
Look at it like this...due date means nothing (sort of)...POST date is the biggie. If you pay before the post date...that is always before the due date. (post date info is going to be exactly what they send you in the mail) I guess I just try to get used to paying before they cut the statement.
OK...did that make sense??