trying to settle a credit card debt

[Anonymous]

a few years back, citicard told me i had to close my cc account or pay 29%APR on a 24K balance.  i was always solid with my payments.  they said it was a business decision.  now i have been paying 14.99% for last few years and have balance down to 19%.  i have the ability to borrow some money to pay this balance off.  I want to know about possibly settling the account for less than 19K.

positive or negative aspects, strategies?

[CreditBob]

If you settle for less it will be on your credit report. It will show other lenders that you did not meet your obligations of the original agreement. This could cause you to be possibly turned down. If you do have the ability to pay down the credit card balance then you should consider it. A loan would help because you would have a mix of different types of credit. A high credit card balance has more of a impact on the fico score compared to an installment loan.

[RobertEG]

Settling for less than the full amount is certainly an economic benefit.

Apparently, there are no derogs reported on the account, so nothing that you need to secure deletion in exchange for payment.  Be careful not to ask for any account deletion upon payment, as the account is apparently otherwise in good-standing, and you dont want to loose its age of account.

If the account is settled for less than the full amount, it will still read the same, regarding its current status, as if the full debt balance was paid.  Current status makes no differentiation as to what amount was paid to settle the debt.  It is simply paid.

However, credtiors report a "Special Comment" code  to a separate field  of your CR when an account is settled  for less than the full balance due.  That comment is available to all who review your CR for 7 years thereafter.  If you offer a settlement, I would condition it upon their agreement not to report the account as paid for less than the full amount.  Just report its current status as paid.  That would be a win-win.

[IOBA]

Something else to consider....if you settle for less than the balance due, and the 'write off' amount is more than $600, you may receive a 1099-C.   The IRS considers the difference of what you owed and what you paid as income.    The 1099-C would reflect that and be sent to you and to the IRS.

[LIGHTNIN]

IMO, if you are current with this CCC, I would doubt they will settle for less then current balance.

You never know now , with the economy......One day CCC's are doing one thing and the next doing another,. Go figure.