A tough decision regarding an AMEX charge-off

Anonymous · ‎05-31-2019

Hi myFICO community!

I am hoping someone who has more experience than my dealing with AMEX can weigh in here as to my options. This is going to take a bit of background so bear with me, I will try to keep it as short as possible.

After using a significant amount of savings to pay down both me and my wife's credit cards and improving our Utilization, I have been able to get both a great CLI on my Amazon card and a new Ikea Visa. I am still at about 25% and my wife at about 50% Utilization but I have gotten my credit in the 630's in all 3 bureaus and am looking at what is next. Other than the amazon and Ikea cards, I have two tiny Cap one's which are totally bucketed and a gettington account.

Here is my problem: In 2013-2014 I dumped Chase, Discover, Amex, and Citi cards and did not settle or pay them off. They are all getting relatively close to falling off of my report, but I have learned about the dreaded blacklists. This in reality means that the only major game in town left is US Bank which I had a large card with that I was able to pay off in 2013 but was closed because of my divorce. I applied recently and of course they denied me for the baddies above.

Stay with me, I have a point. Through this process, I started thinking about which CO I could pay in order to increase my odds of re-establishing with one of the majors. AMEX is the best candidate. I only owed 1250(I owe 5000+ with all the rest) and I remembered that they offered Optima a while back. Just to confirm that I was blacklisted, I applied for a card and there was no HP and the denial reason was a that they previously had to close my account.

I called their collection dept and they basically say it's too late for Optima since the debt was charged off. The rep said that even if I PIF or settle that the closed account reason won't go away but he has seen PIF or settling help. He of course couldn't tell me any details but thought PIF might be better. All the same, there isn't a lot to go off of. PIF or settling would cause me to put off paying me and my wife's open balances down but I am open to it if I believe there is any benefit. So here's the big question:

Should I?

1. PIF $1250

2. Settle $754

3. Let the debt fall off my report along with the rest and just try with US Bank, Barclays, and such in 2020 and focus in keeping my current balances low.

I know it seems like a relatively low amount of money but it will delay me knocking out the rest of our balances for 60-90 days. If it is unlikely that this will help me get my foot in the door with AMEX in the next 3 years, I would probably just forget it.

Thanks in advance for any guidance the guru's here can give!!!

CreditCuriosity · ‎05-31-2019

Not sure about your state, but the SOL isn't over yet so tread lightly as they seems to get more agressive depending on amount before the SOL happens. Now with regards to Amex I would highly suggest PIF for the full amount vs settlement as not much different what 500ish dollars which if you are considering an Amex again isnt much otherwise a debit card might be a better option, etc.. Ignoring it and putting your head in the sand is certainly an option but a few things can happen their they can go after you for it or you won't possibly get an amex anytime in the next 10-20+ years depending on how Amex feels. I am not sure how much you have in CO's and what your SOL are in your state, but tread lightly if you don't plan on paying back the other creditors as if they see you have a new Amex or whatever card on your account and they SP you or the CA sp's you you collection chances went up and the likely hood of them going after you by judgement, etc goes up as well.. Just my 2 cents. Best of luck whatever you choose.

Anonymous · ‎05-31-2019

Hey thanks for the response. I should have mentioned that SOL is up on all of my CO. When I spoke with AMEX, each rep had to read me a disclosure basically stating that they can't sue me because the SOL is up. At this point, this is purely about trying to earn another AMEX in the next few years as I don't have many other places to go. The AMEX collection falls off in approx 13 months.

BallBounces · ‎05-31-2019

First, If I were in your shoes, I would plan on a PIF of the debt, regardless, even without benefit of securing a relationship.

Bear with me on this second part, it sounds hokey: But before PIF .... I would call the Amex number back that you spoke with who said it was too late, and ask them "what department (which one of their internal collections teams) would be authorized to make the Optima arrangement if it were not too late." If possible, speak to THAT team, and see if they can internally make a request to reclaim management of the collection.

Regarding the above, I have NOT ever completed that process, but a person I spoke with implied that it was in fact possible for them to ask to reclaim an account internally to be able to manage it (ie, Optima Card process).

Let me be clear, I think it is very unlikely to succeed for several reasons, but I would try it in your case.

BallBounces · ‎05-31-2019

Also, I don't think you mentioned Wells Fargo as a major bank option, if that really matters to you.

Anonymous · ‎05-31-2019

In regards to them reclaiming, that sounds like a great idea. I am a little fearful as the folks I have spoken with are definitely not in the US and are also not friendly or helpful. It is certainly worth a shot though!

DebtJoe · ‎05-31-2019

If I'm not mistaken, you can still pay Amex back even after said account falls off your credit report.

If you're concern is reducing your current "in good standing" debt, do that, then circle back to paying Amex off when you can.

I also wouldn't sleep on Cap1. They have some solid products for when your score gets back in good shape.