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Question By
Badcredit2014

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How can I pay off my credit cards in full, but at a lower amount?
I'll be receive my income tax refund soon and I wanted to use that money to pay off my credit cards. Trying to get the most of my money, I was wondering if I could call the credit card company, tell them I want to pay it off in full, but at a lower, or discounted price. Is that possible? Does it usually work? Will that be considered a settlement? Are settlements bad for your credit score?

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Payoff

Helpful to 10 out of 11 people

If the credit card is open/in good standing, the customer service will tilt their head in amazement because why are they going to have you NOT pay what you charged on the card.

However, if your card account is in collections, or forbearance, they may close the account for you and give you a 0% interest rate on the remaining balance (depending on your credit performance). The alternative is to trasnfer the balance to another card where you get a promo apr.

Long story short, if you have to pay less than what you owe, it's a settlement, meaning the company realizes you are unable to pay what you spent....and will be reported to the credit agencies as such.

Experience: credit card customer service rep

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paying off cards

Helpful to 7 out of 7 people

It is always good to take your credit in hand but be warned if you call the credit card companies and tell them that you want to pay them off but for less it will be considered a settlement. They will also report this to the credit bureaus as a credit paid in full but for less than owed. The best thing to do would be to call the company and asked them what the best options are and remain calm when talking to them. People are more prone to help you when they see that you are trying to do the right thing and are going about it in a pleasant manner. Good Luck.

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Helpful to 6 out of 8 people

If your credit is good shape, try a personal loan. 

Or transfer to a 0% credit card. Try and find one with a longer 0% offer. 

If  your score isn't that great. Negotiating with you CC co's is your best bet. 

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Paying off less than what's owed on CCs

Helpful to 3 out of 3 people

Transfer to a 0% credit card with as long of a term as possible; otherwise, if you negotiate to pay less than what you owe, it's a settlement, meaning the company will report it to the credit agencies and your score will most definitely take a hit. If you can't qualify for a 0% credit card, try a low interest rate personal loan and make two payments a month that total the entire payment for the month (ie. payment is $100 - pay $50 on the 1st and $50 on the 15th; it actually cuts the interest rate down even further).

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Helpful to 3 out of 4 people

What is the status of the accounts?  Have they gone to collectors or still with credit card companies?  Too many variables to provide an answer, sorry!

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Paying off cards.

Helpful to 1 out of 2 people

All you can do is call them and ask if they will take a lower payment, but in full and ask them if that is considered a settlement.  

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Paying off credit cards.

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I do not know but I think that settlements are bad for a credit score simply because it shows that you did not handle your credit properly.   

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No need to call.

Helpful to 0 out of 1 people

You never need to call a Credit Card company to pay off anything. 

You can pay off a credit card anytime you want. 

If fact you should always pay off any credit card you can. If your balances are high you should be paying them as much as you can. 

Do some reading on this site. It helped me tremendously. 

It can teach you how to build your credit and take control of your it. 

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Reply by
EddyTX

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Helpful to 12 out of 12 people

I misRead the post. 

I apologize for the earlier reply. It makes no sense to the post. 

Yes if your in the position to negotiate. Try it. Try an offer and compromise letter  you can find templates on line. I found that they would settle for 50 to 60% of the balance back a few years ago.  If you haven't had any contact with them in a while be prepared to re-open the account. But if your ready to pay them off it's not an issue. 

Get any agreement in writing before you send any money. 

Always return Reciept registered.  

In fact all contact with creditors should be in writing. Never talk to them on the phone. They can and will say anything. But they are lousy at taking notes! 

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