I have 2 cards, one has a balance of around $8800, the other around $2500... I am a few months past due on each due to bad work and economic conditions.. I now have the ability to pay each in full.. The question is this: The $2500 card company offered to settle with me for $1900 and report I have a 0 balance.. I have not talked to the other yet but I anticipate they would work with me.. Can I ask for a break on the payment amount and also ask for the most favorable reporting to the 3 agencies? I don't know how this works...
Settling with a credit card company could hurt your credit depending on how the settlement is reported by the issuer. A credit card company usually reports the number of days the account was delinquent and will also report that the debt was settled for less than the amount owed. If you have a large amount of debt in other areas then the increase in interest rates might cost you more in the long run. Determine whether you can take a hit on your credit score and you might end up saving more money settling than paying off in full.
Also if your credit issuer refers you to a settlement company, watch out for the fees, they can be substantial.
