Paying off Creditcard in full - can I pay less?

Izwe

I'm going to use the PPI money I've successfully claimed back to do the sensible (boring) thing and pay off my debts.

Now my question is, if I owe ~£4,000, can I ring up my credit card company and close the account, but only pay back (say) £3,000? I've heard that some companies will "settle" at lower amounts, but it seems odd to me as a) they get back less money than they lent you, and b) they will no longer be getting any interest payments either - how can this be profitable for them?

In addition, if they do settle, will this appear on or affect my credit reports? Mine's pretty bad after some awful advice I received (from CAB) when I was having really bad debt issues in 2008, and it's still haunting my credit rating now

Many Thanks!

JustinCredibleGillespie

To be honest the credit card company doesnt really have to accept a lower amount unless you've defaulted on the account, is this the case?

If so, your in a better postition to 'haggle' with them for a reduced figure.

JCG

xx

Izwe

The account is in good standing today. I am within my limit, paying it off (slowly) each month and have a card I can (but don't) use. As I said, back in 2008 things went to pot and I was on a repayment plan (which appears as "arrears" on my credit reports) for ~12 months, but the account has been fine and paid on-time since I got it changed back to a "normal" account.

JustinCredibleGillespie

Then you'll have to pay the amount that you owe in full.

JCG

xx

Izwe

OK, thanks for the info

langtod8

If you have not defaulted in the last 12 months and have kept up to date on payments, I believe capital one are doing a 0% balance transfer. They don't automatically reject you for a bad history if the last 12 months have been OK. If you can transder some or all of your balance onto one of those, then at least that will be a chunk that will not be acruing interest and will help repay faster. Make sure that it is an amount you can pay off before the period ends though, as I believe the standard APR is pretty high.

DVardysShadow

JustinCredibleGillespie wrote: »

To be honest the credit card company doesnt really have to accept a lower amount unless you've defaulted on the account,

Even if you do default, they are not obliged to accept a penny less.

JustinCredibleGillespie

DVardysShadow wrote: »

Even if you do default, they are not obliged to accept a penny less.

Yes I know that DV, however, IF the OP were to default or had defaulted the CC company are more likely to accept a F&F offer.
JCG

xx

DVardysShadow

JustinCredibleGillespie wrote: »

Yes I know that DV, however, IF the OP were to default or had defaulted the CC company are more likely to accept a F&F offer.
JCG

xx

It was not for your benefit. The statement "the credit card company doesnt really have to accept a lower amount unless you've defaulted on the account" strongly implies the converse "the credit card company has to accept a lower amount if you've defaulted on the account". And these things do get misunderstood.

JustinCredibleGillespie

Again please refer back to post 8, I wasnt implying anything but the fact is, & I have been told this by CAB, that creditors are more likely to accept a F&F offer if the account has been defaulted. I'm sure many will agree that when a creditor is offered a lump sum, lower than the actual amount that is owing that they will accept the offer as full & final settlement for the account.

That is my point to the OP.

JCG

xx

seriousDFW

JustinCredibleGillespie wrote: »

Again please refer back to post 8, I wasnt implying anything but the fact is, & I have been told this by CAB, that creditors are more likely to accept a F&F offer if the account has been defaulted. I'm sure many will agree that when a creditor is offered a lump sum, lower than the actual amount that is owing that they will accept the offer as full & final settlement for the account.

That is my point to the OP.

JCG

xx

Yes, we know what your point was, but what you wrote could have been misinterpreted by the OP or another reader, and DV was just clearing this up. He understands what you are saying completely, you don't need to re-clarify this.