What is the advantage of settling a Credit Card debt and how is it going to show on my credit report?

I have a credit card debt is not so much I actually thought I can pay it all off. I received a phone call from the bank and they offered a settlement much less then what I owe. Can this really back fire on me or affect my credit in a really bad way?|||Ask lenders for agreement to delete this items from your credit report when paying them. I recommend to get such agreement thru credit repair agency, for example this one - credit-report-free.totalh.com|||How long has been the balance overdue???





If I'm not mistaken, under the new credit laws, if a borrower can't pay the balance for six straight months, the balance owed will be forfeited (the reasoning behind that is that a borrower who can't pay for six straight months will likely be cash strapped and won't be able to pay off the debt anyway).





Hence, when the six months is nearing, banks offer settlements that will entice the borrower to pay up something (even drastically less than the original amount) rather than receive nothing at all.





In any case, the "settled debt" may still reflect on your credit report and may affect your credit rating. I'm not sure though to what extent if ever.





There's nothing illegal in accepting the bank's offer. And if you think you can save a lot from it, then do so.





Personally though, as a Christian, if I were in your shoes, I'd probably be inclined to pay in full because it's more in line with Biblical ethics. But that's just me.|||if the balance is so large that you realistically don't have a chance to pay it off, you should consider this.





A few thing to consider





1) this will impact your credit scores. however you can petition the credit bureaus in about six months and try to get them to remove this writeoff from your credit report





2) get everything in writing





3) only go for a few settlement and not a pmt plan





4) most importantly learn from this life lesson and don't repeat it.|||Since the card is already very past due (the bank wouldn't offer a settlement in full if it was not), settling for less than you owe is a good thing if you can do it.





Some things to note:





Only agree to settlement in full. Their payment plans are usually not beneficial, once you are behind and the account is sent to collections, they should accept a reasonable settlement offer.





Do not send any funds until you receive written confirmation of the agreement from the lender. Keep this agreement with a copy of the check on file forever. You don't want them coming back in 5 years asking for more.





DO NOT ALLOW ELECTRONIC ACCESS TO A BANK ACCOUNT. They will take your money, collectors are mean people.





Finally,


Listen to Dave Ramsey! He is an awesome radio host who helps a lot of people in your situation. Find where to listen here:





http://www.daveramsey.com/radio/home/|||If you're at the the point where your bank is offering big settlements on your account, then it's safe to assume that your credit rating has already taken a big hit from the account being way past due. If your card has not yet charged-off and taking the settlement help you from having a charge-off, then for sure take the settlement. Get all terms in writing PRIOR to paying the settlement.|||if it has already gone to a collection agency, you pay a lot less. it will show paid on your credit report but you need to make sure it does get reported that you paid it off.|||This will actually make your credit better than it would have if you didn't pay it at all. It's not as great as paying the full balance, but your credit should be better.