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Is it better to settle your credit card debt or pay in full?

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Stressed young woman has financial problems credit card debt to pay crucial
Paying off your credit card in full is one viable option for tackling your debt — but so is debt settlement in some situations.

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Right now, a range of economic issues, from elevated interest rates to high prices on gas, groceries and housing, are weighing heavily on many people’s budgets. In turn, some Americans are turning to credit cards to try and bridge the gap between their budgets and their necessary expenses. But with the average credit card rate hovering near 22%, that may not be the best plan. After all, compounding credit card interest charges can make it tough to pay off what you owe, as evidenced by the fact that credit card delinquencies have become more frequent recently and cardholders are maxing out card accounts at concerning rates.

Maxing out your credit cards is never ideal, but having late or delinquent credit card payments on your credit report can cause severe damage to your finances and credit. And, not only does the damage to your credit score from late payments take time to repair, but missed payments are a red flag to lenders, making it harder to get approved for loans, mortgages, rental housing and other credit products in the future. There are also potential credit card late fees and penalty annual percentage rates (APRs) to contend with, both of which can further increase the cost of your credit card debt.

So, if you’ve fallen behind on your credit card payments, it’s crucial to take control of the situation as soon as possible — before the situation spirals further out of control. Credit card debt settlement is one potential path you can take to address delinquent credit card debt. When you take this route, the goal is to try and get the credit card company to forgive a portion of your total card balance. But while this can help you get out of high-rate card debt, is it better to settle your debt or pay off what you owe in full? 

Find out how the right debt relief company could help you get rid of your credit card debt

Is it better to settle your credit card debt or pay in full?

Paying off your credit card debt in full is almost always the optimal route when looking at the issue from a credit score and financial perspective. By paying off the full balance owed, you will eliminate the debt and keep your credit report clean of any derogatory remarks related to the debt. And, in some cases, your credit score may even increase due to the lower credit utilization.

However, paying off credit card debt in full may not always be feasible, especially if the total balance is too high to reasonably afford. And, that’s even more true when you’re carrying a balance from month to month and the interest charges are compounding. That’s where debt settlement could be the next best solution. 

With debt settlement, you typically work with a debt relief agency that negotiates with your creditors on your behalf to try and settle what you owe for less than the full amount (you can also try to negotiate settlements on your own, but that can get complicated.) If negotiations are successful, a lump-sum settlement is paid to the creditor to “settle” the debt for a percentage of the full balance, saving you a hefty sum on what you owe.

Creditors are often willing to accept a settlement because it allows them to recover some amount of money when the alternative could be receiving nothing if you were to default entirely or declare bankruptcy. And, in addition to saving you money, the debt settlement process also benefits you because settled debts are considered “paid” or resolved from the lender’s perspective, whereas unpaid debt can lead to charge-offs, collection efforts and potential litigation.

That said, successfully negotiated debt settlements will typically appear on your credit report as “settled for less than owed.” This does create a negative mark that can temporarily ding your credit score, but the damage is less severe than charge-offs or debts sent to collections. And, your score often recovers and improves after the settled debt is paid.

Settling your debt is also typically preferable to bankruptcy, which leaves a major scar on your credit history for up to 10 years. And if bankruptcy is a serious possibility due to out-of-control debt levels, lenders would likely prefer you settle rather than discharge the debt entirely through bankruptcy proceedings.

Compare your debt relief options and start tackling your high-rate credit card debt today.

How to decide which repayment option is best for you

So how can you determine which option makes the most sense for your finances? Well, that answer typically depends on your circumstances. 

For example, if you can realistically pay off your credit card debt in full by living frugally, taking a side job, borrowing from family or finding more room in your budget through other means, full debt repayment is typically the best and fastest path back to a clean credit report and score. However, if the debt balance is too high to reasonably afford a payment in full, debt settlement may be worth considering.

It may help to calculate how long it would take you to affordably pay off the debt in full based on your current budget and payment sizes. If you find that it would take several years or more in an aggressive payment plan to repay your debt, the interest charges accruing during the payoff period could make it very difficult to pay the balance in full. In that scenario, it may be better to settle for a lower lump sum payment that you can more realistically afford.

You may also want to calculate the fees involved and taxes owed on any forgiven portions of debt to understand the true costs. After all, the IRS considers the portion of the debt that’s settled to be taxable income, so it could increase the amount you owe. And, debt settlement companies typically charge a fee for their services, so that can add to the cost of debt settlement. 

But if you make those calculations and find that the settlement route provides affordable resolution in a reasonable timeframe compared to untenable options like bankruptcy, it could make sense for your situation.

The bottom line

Having delinquent or maxed-out credit card debt can inflict serious damage on your finances and credit score. So, if you’ve fallen behind on payments, it’s crucial to address the situation head-on as soon as possible. In general, paying off your credit card debt in full is the optimal solution that preserves your credit score and history. 

However, it may not always be feasible to afford paying the total balance owed, especially with high interest rates compounding the problem. In this scenario, debt settlement could be the next best option to resolve the debt affordably. To determine whether that’s the right path for you, weigh your ability to pay off the debt in full through an aggressive payment plan based on your budget and income. If you find that path is untenable, debt settlement could provide the most viable path to future financial stability.



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Israel and Hezbollah both claiming ceasefire violations on Day 2

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Beirut — At least two people were wounded by Israeli fire in southern Lebanon on Thursday, according to state media, as the Israeli military and Hezbollah accused each other of breaching a ceasefire less than two full days after it took effect.

The Israel Defense Forces said in a statement that “several suspects were identified arriving with vehicles to a number of areas in southern Lebanon, breaching the conditions of the ceasefire. The IDF opened fire toward them.”

“The IDF remains in southern Lebanon and will actively enforce violations of the ceasefire agreement,” the military said.

LEBANON-ISRAEL-PALESTINIAN-CONFLICT-CEASEFIRE
Lebanese soldiers man a checkpoint, using a military vehicle to block a road in southern Lebanon’s Marjayoun area, Nov. 28, 2024, a day after a ceasefire between Israel and Hezbollah took effect.

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Hassan Fadlallah, a Hezbollah member of Lebanon’s parliament accused Israel of violating the ceasefire by firing on civilians returning to their homes in the southern villages.

“The Israeli enemy is attacking those returning to the border villages,” Fadlallah told reporters after a session of the legislature, according to the Reuters news agency. “There are violations today by Israel, even in this form.”

The agreement, brokered by the United States and France, includes an initial two-month ceasefire in which Hezbollah militants are to withdraw north of the Litani River and Israeli forces are to return to their side of the border. As Israeli forces withdrawal, the buffer zone will be patrolled by Lebanese troops and U.N. peacekeepers moving in to take their place, but it is expected to take weeks, and Israel retained full security control over both sides of the border region as of Thursday.

Lebanon’s state-run National News Agency said two people were wounded by Israeli fire in Markaba, close to the border, without providing further details. It said Israel fired artillery in three other locations near the border. There were no immediate reports of casualties.

While the detailed terms of the ceasefire agreement have not been made public by the U.S., President Biden made clear when he announced it on Tuesday that Israel retained the right to self-defense, and Israeli Prime Minister Benjamin Netanyahu warned that any violations of the deal would be met with a swift and harsh military response.  

An Associated Press reporter in northern Israel near the border heard Israeli drones buzzing overhead and the sound of artillery strikes in Lebanon.

Israeli officials have said forces will be withdrawn gradually as it ensures that the agreement is being enforced. Israel has warned people repeatedly not to return to areas where troops are deployed, and says it reserves the right to strike Hezbollah if it violates the terms of the truce.

The ceasefire agreement announced late Tuesday ended 14 months of conflict between Israel and Hezbollah that began a day after Hamas’ Oct. 7, 2023 attack out of Gaza, when the Lebanese militant group began firing rockets, drones and missiles in solidarity. The Hamas attack saw the militants kill some 1,200 people in southern Israel and take 250 others hostage.

Israel retaliated with airstrikes, and the conflict steadily intensified for nearly a year before boiling over into all-out war in mid-September. The war in Gaza is still raging with no end in sight, with health officials in the Hamas-run Palestinian territory saying more than 44,280 people have been killed. Most of the enclave’s 2.3 million people have been displaced from their homes, many of them forced to flee multiple times over the last year.

More than 3,760 people were killed by Israeli fire in Lebanon during the conflict, many of them civilians, according to Lebanese health officials. The fighting killed more than 70 people in Israel, meanwhile, more than half of them civilians, as well as dozens of Israeli soldiers fighting in southern Lebanon.

Some 1.2 million people were displaced in Lebanon, and thousands began streaming back to their homes on Wednesday despite warnings from the Lebanese military and the Israeli army to stay out of certain areas. Some 50,000 people were displaced on the Israeli side, but few have returned and the communities near the northern border are still largely deserted.



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New Mexico man awarded $412 million payout over botched penile injections: “A national record-setting case”

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Jurors in New Mexico have awarded a man more than $412 million in a medical malpractice case that involved a men’s health clinic that operates in several states.

The man’s attorneys celebrated Monday’s verdict, saying they are hopeful it will prevent other men from falling victim to a scheme that involved fraud and what they described as dangerous penile injections. They said the punitive and compensatory damages total the largest amount to ever be awarded by a jury in a medical malpractice case in the U.S.

“It’s a national record-setting case and it’s righteous because I don’t think there’s any place for licensed professionals to be defrauding patients for money. That is a very egregious breach of their fiduciary duty,” said Lori Bencoe, one of the lawyers who represented the plaintiff. “That’s breach of trust and anytime someone is wearing a white coat, they shouldn’t be allowed to do that.”

The award follows a trial held in Albuquerque earlier this month that centered on allegations outlined in a lawsuit filed by the man’s attorneys in 2020. NuMale Medical Center and company officials were named as defendants.

“This corporate scheme manipulates and uses fear as a tactic to convince these men to do this,” Nick Rowley, a trial lawyer, told CBS affiliate KRQE.

According to the complaint, the man was 66 when he visited the clinic in 2017 in search of treatment for fatigue and weight loss. The clinic is accused of misdiagnosing him and unnecessarily treating him with “invasive erectile dysfunction shots” that caused irreversible damage.

Nick Rowley, another attorney who was part of the plaintiff’s team, said the out-of-state medical corporation set up a “fraudulent scheme to make millions off of conning old men.” He provided some details in a social media post, saying clinic workers told patients they would have irreversible damage if they didn’t agree to injections three times a week.

NuMale Medical Center told KRQE that they “disagree with the verdict and intend to pursue all available legal remedies, including appeal.”

Malpractice Men's Health Clinic
A sign for NuMale Medical Center is displayed outside a building in Albuquerque, New Mexico, Wednesday, Nov. 27, 2024.

Susan Montoya Bryan / AP


NuMale Medical Center President Brad Palubicki said in a statement sent Wednesday to The Associated Press that the company’s focus is on continuing to deliver responsible patient care while maintaining strict safety and compliance standards at all of its facilities.

“While we respect the judicial process, due to ongoing legal proceedings, we cannot comment on specific details of the case at this time,” he said.

NuMale also has clinics in Colorado, Florida, Illinois, Nevada, Nebraska, North Carolina and Wisconsin.

According to court records, jurors found that fraudulent and negligent conduct by the defendants resulted in damages to the plaintiff. They also found that unconscionable conduct by the defendants violated the Unfair Practices Act.

In a statement to KRQE, the man’s attorneys said the verdict sends a powerful message that “medical providers cannot prioritize profits over patients’ well-being without being held accountable.”



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Why does eating turkey make you sleepy? Learn the facts about Thanksgiving fatigue

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Many of us feel sleepy after eating turkey and all the fixings on our Thanksgiving dinner table, but why?  

While we often blame our post-dinner drowsiness on the tryptophan in turkey, experts say that isn’t the full picture.

What is tryptophan?

Tryptophan is one of 20 essential, naturally-occurring amino acids, which are the building blocks of proteins, according to the nonprofit Center For Food As Medicine

When tryptophan reaches the brain, it is converted into the neurotransmitter serotonin and hormone melatonin, both of which are sleep-inducing, according to the organization. 

Does turkey really make you sleepy?

Research suggests that consuming tryptophan can help people fall asleep faster and improve sleep quality, according to the Sleep Foundation — but it’s not likely to cause someone to need an immediate snooze. 

“Turkey is reported to make us sleepy because it has a higher concentration of the amino acid tryptophan compared to some other types of meat,” registered dietitian Melanie Betz, founder and CEO of The Kidney Dietitian in Chicago, told CBS News. “In reality, brain chemistry is much more complicated than that. Turkey has many different amino acids, all of which get converted to different hormones and complete with each other in all of those pathways.”

Turkey isn’t the only food with tryptophan, either. It is found in poultry, meat, cheese, fish, eggs and seeds — some of which have even more of the amino acid than the Thanksgiving staple it’s so often associated with. 

“There are many foods, such as pumpkin seeds, ground pork, cheddar, swiss, provolone and mozzarella cheese, and yellowfin tuna that have more tryptophan per 100 grams than turkey,” according to the Center For Food As Medicine. 

What else could contribute to Thanksgiving fatigue?

Betz says multiple aspects of a Thanksgiving feast could add to the “food coma”-type tiredness many experience. 

“The sleepy feeling you feel after a turkey dinner is much more likely related to eating a large, delicious meal — and perhaps an extra glass of wine — than a surge of melatonin related to turkey,” she said, explaining that when you eat, “blood rushes to your intestines to pick up all of those wonderful nutrients from food, moving away from your brain, which can make you feel tired.”

And alcohol has a sedative or “downer” effect, she added, which can contribute to sleepiness on the holidays.



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