The interest rate you receive, however, is contingent on your credit score.

If you have even a smidgen of doubt that you'll be able to stay away from racking up additional debt, don't do it.

The interest rate you receive, however, is contingent on your credit score.

You settled a debt instead of paying in full will stay on your credit report for as long as the individual accounts are reported, which is typically seven years from the date that the account was settled. Unlike with bankruptcy, there isn't a separate line on your credit report dedicated to debt settlement, so each account settled will be listed as a charge-off.

You won't be caught off guard and you won't feel guilty, because you'll be spending money that you've allocated for the occasion.

A little personality goes a long way.

Once the settlement is completed, the credit card company will report it to the credit bureaus, which will then make a notation on your credit report that that account was paid by settlement. That's going to signal to future lenders that you left the last guy hanging. That's why, as with bankruptcy, debt settlement is an extreme option, one you shouldn't take lightly. It's not just an easy, cheap way to eliminate debt.