I'm in the process of eliminating my debt. I'm now in a position to
probably pay off my 2 credit cards. My question is this:

If I "settle" one of my credit card accounts (that is, if I make
arrangements with the credit card company to pay a lower amount than
what's currently due), how will this affect my credit report? In the
long run, am I better off just paying the total amount? I need more
than just an opinion here; I need to know, in concrete terms, how this
will affect my credit.

The account in question is just under $500, over it's limit, and
mostly interest and penalties.

Thank you.

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Clarification of Question by itjustme-ga on 15 Sep 2004 12:25 PDT

The account is not currently past due, although it has been in the
past. I am currently making minimum payments. I have no assets. (Used
cars, no home, etc.)

Thanks.

I have not had a problem. I cannot say for sure because I have no idea
who you're dealing with, but that's been my experience.

BUT, if they say they're going to *settle* and not report, then GET IT IN WRITING.

More information is needed to answer this question. 

How delinquent is the account?  Dependent upon the creditor's internal
policies, the closer you are to 90 days delinquent and 180 days
delinquent will have a large impact on how willing they are to acceopt
a settlement.

What assets do you have that the creditor knows about? If you are
sitting on beach front property they may be less likely to settle the
account.