@Anonymous wrote:
Hi Everyone,
I need some serious advice on how I should proceed with this matter! I currently have a charged off account with AMEX that fell greatly behind after the whole mishap with Hurricane Irma. I owe AMEX $3400.00 and was offered to pay around $1700 to settle but if I paid on full I could get an Optima card and be back in good standing with AMEX. That is not my concern right now. I want to figure out what will be best from my score in the long run if the CO in fairly new.
Should I bite the bullet and make sacrifices to PIF or just wait it out since my score won’t change? Is their anyway to get the chargeoff removed due to the disaster I know that’s a long stretch just wanted to know also if anyone had luck with AMEX and GW gestures?
Amex isnt going to remove the TL, the PFD process is geared for collectors that report on your CR, OCs are notorious for not granting such requests though you can ask. You want to settle this either way quickly as they are most likely going to update it monthly and this will keep your Fico score depressed. Once its PIF or settled and is updated to 0 balance then the monthly update stops and it can begin to age resulting in Fico score increases over time assuming you have no other problems that come up. Welcome to the board 
The $3400 balance is still factored into your overall util even though the account is charged-off -- and it's probably reporting util over 100% because the credit limit of a charged-off account is $0. So, whether you PIF or settle, the account reporting a $0 balance after payment will lower your overall util, so it could end up helping your scores depending on your overall credit limit. The main thing is that you get it paid so no further collection action occurs and any future updating of negative info to the account is avoided; this will allow the account to age so it hurts a bit less over time (but it will hurt till it drops off).
Amex isn't known for GW, but - since you were affected by Irma -- you could try sending a GW letter explaining what happened -- you never know, they may be willing to remove the account as an act of good faith under those circumstances -- certainly worth a shot.
If you're not concerned with acquiring future credit with Amex then just settle the account if that is what's best for your current budget. But, if you do want a relationship with them in the future, then I'd suggest you PIF (maybe a payment plan?) and accept the Optima offer.
@Anonymous wrote:
Thanks for the response!
So the outcome will pretty much be the same if I settle or PIF as far as my score goes?
Scorewise, yes, PIF / Settle will be the same. The difference will be in the account notation. Many lenders (not sure about Amex) will notate whether the account was 'paid in full' or 'settled for less.' While this notation has no bearing on FICO scoring, it is visible to other lenders that may perform a manual review of your reports -- and how a 'settled for less' notation affects their decision making, if at all, may vary. Obviously, showing that you pay your debts in full -- even if a bit late -- is a better look than settling for less. But for scoring purposes, they will have the same effect so long as the balance due is updated to reflect $0 and the account is closed to further updating.
I have no personal experience with the Optima card, but I've read posts from others that have accepted that offer after paying off an Amex debt and were able to acquire other Amex cards after couple of years of good behavior (from what I understand, you cannot product change the Optima to a different card when the time comes, you'll have to go through the app process for a new card). You can do a forum search for 'Amex Optima' and read others' first hand experiences -- there are quite a few of them and should provide some insight.
@Anonymous wrote:
Also, Have you heard anything about the Optima Card? I’m trying to weigh out my options and make sure I make the best decision since I’ll be living with it for 7 years