Natwest credit card advice- closing cards

crm23

Hi I'm a newbie to all this, but really struggling for some sound advice. Any help would be appreciated! Firstly, I'll give you some background information. I'm 23, live with parents and have an income of about £28000 a year. In terms of loans I had a £3000 graduate loan with Natwest 3 years ago and I repayed this in full a year early. In terms of other credit I had a £500 student credit card. I have had direct debits for years and never had any problems with repayments etc. Credit has always been widely available to me.
I now come on to my problem..
I was sent a letter about a month ago saying the interest on my cc would be increasing to over 20% and if I would like to discuss my options then call the bank. I have been making regular dd payments to pay off this card and the balance at the time was at £400. To be honest I did not need the card and could have paid the whole balance off there and then, but I was advised by Natwest that my best option would be to close the card (with the balance remaining) and they would freeze interest at the current rate. I could then clear the balance as I had been doing. I did this and my plan was to clear the whole balance when i had been paid. At no point was I advised that this may have a detrimental impact on my credit rating.
The next week I thought I might apply for a credit card with some benefits on etc. I was instantly turned down. I tried another and the same happened. At this point I got quite concerned and went into Natwest. They advised I got my credit history report. My report showed a rating of 815 and everything was good, nothing negative on there at all. I showed this to the bank manager and they agreed I should have not trouble with gaining credit. I then mentioned the closed card and instantly they said that was the problem. They rang up and re-activated the card and said everything would now be fine. Not the case... I used credit experts card checker and only one card came up that I would possibly be accepted for ( this card had a massive interest rate and was obviously for people with bad debt )
I have three questions
1) everything I see on my credit rating is showing as good. Can companies see other things such as the rigmarole with this CC? Will
this stay on my report for seven years?
2) I am planning on making a complaint about the advice i was given, can Natwest erase the original cancelling of the card off my history?
3) what do I do next?! I am concerned as I am hoping to get on the housing ladder next year and with this I doublt mortgage lenders would touch me with a barge pole.

Any help or advice would be greatly appreciated! Thanks.
A

Eonel

As far as I am aware, companies see the same credit data as you see when you query Experian etc.

I don't think it is the best idea to close a credit card account with a balance on it, but if that is not reflected on your credit report then I do not think any other potential lender would know.

jamesd

Companies see a bit less information than you see. Instead of the name of the company they just see a generic description like credit card or personal loan.

The closed card may show up as an arrangement to pay and that would be a negative thing. It will probably be fixed a few weeks after the next statement date for the card. Statements tend to be when companies update the credit report details.

Rather than making a complaint at the moment, give NatWest time to sort things out. Chances are that they will, without further fuss.

Do you still have an overdraft facility at NatWest? By facility I mean available to use, not actually used? If so, one option would be to use the overdraft facility to pay off the card then use the card for the next big family shop or three, with the family paying you the cash. You use the cash to pay off the overdraft.

The reason that helps is that the interest free periods on cards applies when the whole balance is paid off. So if you clear the balance then use the card for spending you get the usual interest free period on the card. Repeat for a few months and the lack of interest will make it easier to reduce the amount owed.

On the less positive side, how can you afford to get on the housing ladder next year? You're likely to need a minimum of 10% deposit and better 15% or to get good rates, 25%. One year before that you don't seem to have any savings, so that bodes very badly for your chance of accumulating a sufficient deposit in just one year.

It is possible to improve things very quickly. I did it by putting away more than 60% of my income for several years. That's a short term lifestyle compromise to get longer term benefits. Such compromises of short term and long term goals are for individuals to make, deciding how much short term and how much long term to do.