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Should I pay in Full or see if CC will settle for less or if thats super bad to do.

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Should I pay in Full or see if CC will settle for less or if thats super bad to do.

HI new poster been around for a while

my question is I have 4 credit cards

 

BOA at 8,065 credit limit is 9,000  had since 2006  APR 19.49%

capital one 4,912 credit limit is 5,500  had since 2005  APR 22.24%

chase 6,315  credit limit is 6,000   had since 2007   APR 20.49%

First national bank of Omaha  889 Credit Limit is 1,350  APR 9.99 ( when I applied I got a 5k limit then 6 months later they dropped it down to 3k then to 1,350 and I had never missed a payment or late) ( this one I will just pay off in full)

 

none are in collections I have never been late on a payment in the past 10+ in fact the 3 oldest had been charged up then I paid in full in about 2010 but now all charged up again and I have the opportunity to pay off with a loan from a family member at 5% interest

 

( I had to rebuilt my credit back after I got Div in 97 I got stuck with my wifes CC's in the Settlement 25k worth and after paying them with no issues I got fed up in 99 and said hell with it I am not paying anymore for what she had charged up.. sooo I went into collections and etc and most all of those but 2 of those got charged off those 2 I settled but this is all off my Report which is clean as whistle now besides the high balances)

no mortgage  home is paid for, me no car payments I paid cash for my car in 2007( I still have because it only has 57,000 miles on it I dont travel much)( BUT I might want to get a new car in the next few years maybe so worried about if this will effect my Credit BAD)

 

My question after all this is.. should I just pay them all off in full as is... OR do I call the companies and tell them I want to try and settle the accounts for less than I owe to try and save some money and not have to borrow as much from my family member to pay back.. or is it super bad to try and Paid For Less Than Owed and if it not that bad to do that.. is there a best strategy to use...

 

Thanks

UmmLee

Message 1 of 36
35 REPLIES 35
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Community Leader
Senior Contributor

Re: Should I pay in Full or see if CC will settle for less or if thats super bad to do.

If you accounts are currently paid on time and in good standing, why on earth would you try to settle them??

 

You stated you have no  mortgage or car payment, can you not afford to pay back these debts?

 

I would work on a budget, start with the small one FNBO get that paid off and start snowballing the others.

EXP 758 TU 783 EQ 729
Message 2 of 36
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Super Contributor

Re: Should I pay in Full or see if CC will settle for less or if thats super bad to do.


@UmmLee wrote:

HI new poster been around for a while

my question is I have 4 credit cards

 

BOA at 8,065 credit limit is 9,000  had since 2006  APR 19.49%

capital one 4,912 credit limit is 5,500  had since 2005  APR 22.24%

chase 6,315  credit limit is 6,000   had since 2007   APR 20.49%

First national bank of Omaha  889 Credit Limit is 1,350  APR 9.99 ( when I applied I got a 5k limit then 6 months later they dropped it down to 3k then to 1,350 and I had never missed a payment or late) ( this one I will just pay off in full)

 

none are in collections I have never been late on a payment in the past 10+ in fact the 3 oldest had been charged up then I paid in full in about 2010 but now all charged up again and I have the opportunity to pay off with a loan from a family member at 5% interest

 

( I had to rebuilt my credit back after I got Div in 97 I got stuck with my wifes CC's in the Settlement 25k worth and after paying them with no issues I got fed up in 99 and said hell with it I am not paying anymore for what she had charged up.. sooo I went into collections and etc and most all of those but 2 of those got charged off those 2 I settled but this is all off my Report which is clean as whistle now besides the high balances)

no mortgage  home is paid for, me no car payments I paid cash for my car in 2007( I still have because it only has 57,000 miles on it I dont travel much)( BUT I might want to get a new car in the next few years maybe so worried about if this will effect my Credit BAD)

 

My question after all this is.. should I just pay them all off in full as is... OR do I call the companies and tell them I want to try and settle the accounts for less than I owe to try and save some money and not have to borrow as much from my family member to pay back.. or is it super bad to try and Paid For Less Than Owed and if it not that bad to do that.. is there a best strategy to use...

 

Thanks

UmmLee


Yes you should pay in full. Yes it's super bad to settle for less than owed. Will mess up your credit for many years.


Total revolving limits 654000 (575000 reporting)

Message 3 of 36
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Member

Re: Should I pay in Full or see if CC will settle for less or if thats super bad to do.

I had forgotten to put my Credit scores.

 

Trans  715

Equa 741

exper 732  

 

my thoughts were that it might ding my credit scores like 50-100 points if it saves me like 5,000 or 6,000 Id just work on building that back up..the only negative kinda thing I have had in the past 10 years was when BOA let someone use my CC to buy 5k worth of airline tickets in mayalasia and their security dept didnt contact me about it let it go thru but every time I used my card in my home town for 25 bucks they called me wanting to make sure it was me but when someone in mayalasia bought 5k worth of plane tickets ( which I have never purchased either lol) at a travel agency there they didnt question it .. I happen to look at my account they was like **bleep**.. and called them.. and they had to charge off the 5k and even thou it was THEIR fault my CS dropped about 50 points took me about a year and a half to get that back up.. So I was guessing that if I saved 5 or 6,000 by setttling if it just dinged it 50 points or so it would be worth saving having to borrow the extra.

 

Message 4 of 36
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Member

Re: Should I pay in Full or see if CC will settle for less or if thats super bad to do.

Yes but I'd rather stop having to pay monthly crazy interest and if I could save not having to borrow as much to pay them off Id take a small ding to my CS not knowing how much they would drop them by settling over pust paying.

Message 5 of 36
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Established Contributor

Re: Should I pay in Full or see if CC will settle for less or if thats super bad to do.

If the accounts are open, and not delinquent, then it is extremely unlikely that they will offer you a settlement deal. They are in the business of making money from interest charges, and they are VERY happy to have you keep making small on-time monthly payments for as long as they can. Banks generally won't take a pay-for-less offer unless you're 6+ months overdue, and obviously your credit scores will take a HUGE hit if you let that happen, so it's not even remotely worth it.

 

A better solution is a debt consolidation loan, or just keep chipping away at the cards until they're paid off (google the "debt snowball" method).

    Total Loan Balance: $28k / $70k

    Total SL: $41.2k
Goal cards:



United 1K - 675,000 lifetime flight miles    |    Chase 6/24
Message 6 of 36
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Valued Member

Re: Should I pay in Full or see if CC will settle for less or if thats super bad to do.

I agree with other members' comments.  
We all seem to assess a clean CR (and encompassing long term ancillary perks) exceeds $20K.

Suggested scenario:

If you don't want to borrow $20K from a family member, how about $10K to start? 

Then allocate that family borrowed $10k to most suitably enhance your credit. (Experts here will ENJOY explaining how to optimize your current card balances to best enhance your credit scores)

Once balances are optimized, (and your current Fico increases) acquire another card that specializes in 0% balance transfers (for 14-18mths).


One thing you didn't mention is your income nor disposable income. I pre-suppose, you have some discretionary income but will have to forego the extras for a year or two. 

Good luck

Message 7 of 36
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Valued Contributor

Re: Should I pay in Full or see if CC will settle for less or if thats super bad to do.


@coreysw12 wrote:

If the accounts are open, and not delinquent, then it is extremely unlikely that they will offer you a settlement deal. They are in the business of making money from interest charges, and they are VERY happy to have you keep making small on-time monthly payments for as long as they can. Banks generally won't take a pay-for-less offer unless you're 6+ months overdue, and obviously your credit scores will take a HUGE hit if you let that happen, so it's not even remotely worth it.

 

A better solution is a debt consolidation loan, or just keep chipping away at the cards until they're paid off (google the "debt snowball" method).


This was my experience before filing for BK 7.   I knew I could never pay back the credit cards and I talked to Chase and AMEX and others but they told me flat out that they don't settle until charge-off.   Sometimes at 90 days past due they will cut the interest date and give you a payment plan but they won't settle.   The reason is that until write-off they carrry the debt as an asset on their books.   Once they write it off (usually at 6 months) they take the full financial hit.   So at that point anything they can collect is booked as income since they took the charge for the full balance due.

This doesn't really make sense but it is much better to file a BK 7 and get everything discharged than having a bunch of charged off accounts.   With a BK you can fully recover in two years but with write-offs they will still be declining you five years later.

Take the family loan and don't destroy your credit.....

FICO 8: EX-775, EQ-776, TU-770 - [10/9/2020]
FICO 9: EX-804, EQ-843, TU-830 (10/9/2020)
Mortgage: EX-725, EQ-724, TU-744 - [10/9/2020]
NFCU NavChk 15K | NFCU Visa 50K | CapOne Venture Visa 50K | Barclay Aviator MC 12.5K | Discover It 37K | Alliant Visa 25K | BECU CLOC 10K | BofA AK Air Visa 5K |Amazon Prime 10K.
214.5K Total Revolving.
Alliant Auto Loan 2.5K/31K
BK 7 Filed 8/23/2013 - Discharged 11/27/2013.
Message 8 of 36
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Community Leader
Senior Contributor

Re: Should I pay in Full or see if CC will settle for less or if thats super bad to do.

No one has mentioned it yet, but you say Chase has a $6000 limit with a balance of $6315. Is that a typo?


Rose Gold NPSL | BCP | Delta Gold | Hilton Surpass | Hilton Honors | PenFed PCR | IT Cash | IT Chrome | GHSFCU Visa Plat | Quicksilver | Target | VS | Home Depot | Lowes | Sams MC | Firestone | Overstock | Kohl’s | 2017 Audi A6 Prestige S-Line





TCL $85,100| Agg. Util under 5%
Message 9 of 36
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Established Contributor

Re: Should I pay in Full or see if CC will settle for less or if thats super bad to do.


@UmmLee wrote:

 

my thoughts were that it might ding my credit scores like 50-100 points if it saves me like 5,000 or 6,000 Id just work on building that back up..the only negative kinda thing I have had in the past 10 years was when BOA let someone use my CC to buy 5k worth of airline tickets in mayalasia and their security dept didnt contact me about it let it go thru but every time I used my card in my home town for 25 bucks they called me wanting to make sure it was me but when someone in mayalasia bought 5k worth of plane tickets ( which I have never purchased either lol) at a travel agency there they didnt question it .. I happen to look at my account they was like **bleep**.. and called them.. and they had to charge off the 5k and even thou it was THEIR fault my CS dropped about 50 points took me about a year and a half to get that back up.. So I was guessing that if I saved 5 or 6,000 by setttling if it just dinged it 50 points or so it would be worth saving having to borrow the extra.

 


Removing fraudulent charges is far different than writing off balances that you are unwilling or unable to pay.

I've never heard of a credit score dropping because fraudulent charges were removed from an account. 

 

As far as the larger question, I would expect far more than a 50 point drop if a CC company wrote off any amounts. As others have mentioned, you would have to have go at least 90 days late and that will cause a drop far more than 50 points on it's own. At that point you can expect severely depressed scores for the 7 years it takes to drop off your credit report.

Scores: Spt 20: EX FICO8 831, TU FICO8 828, EQ FICO8 823
AoOA: closed: 36 years, open: 25 years; AAoA: 11.8 years
Amex Gold, Amex Green, Amex Blue, Amex ED, Amex Delta Gold, Amex Hilton Surpass, BoA Platinum Plus, Chase Slate, Chase Amazon, Chase CSP, Citi AA Plat, Sync Lowes, Sync JC Penney - total CL 145k
Loans: Prosper (20k/3yrs 7.14%), Lending Club (10k/3yrs 5.89%), Chase car loan (35k/6yrs 0.9%)
Message 10 of 36
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