Oh it sounds like they are harassing you for sure! The most they can do IS take you to court, which unless it's a huge amount they usually just write it off. Sounds to me like they are trying one more time to get their money. IF you used the card for purchases of chattle items they could reposess those items. (Such as tv, cd player, washing machine)

I would say contact some free advice organizations. I know that you can ask questions and receive free answers from Suze Orman at her website. (Suzeorman.com) I also know that Crown Financial also provides this service at times, and are also trustworthy.

Don't go with any credit repair service that charges you a fee. The regular businesses usually get paid by the credit companies for helping.

Yes, it will affect your credit if you don't make any agreement with the card company. It's up to you as to how you treat this. But remember, they are not allowed to harrass you, as that is against the law. If they continue after you say you can't pay it, then contact the FTC (Federal Trade Commission.) Actually, just threatening the card company that you are going to notify the FTC will make them back off.

good wishes.