Should I close previously defaulted card.

lucy1981

Hi this is my first post, although I have lurked for a while... hoping someone could advise about credit cards.

I've just sold my flat and have some money which I had planned to pay off some debts and save the rest.

One have a credit card account with halifax with an approx. £500 balance which I will be paying off. In approx December 2006 I missed one monthly payment for which I was charged £20. I was on a very low income at the time and Citizens Advice wrote to Halifax and negotiated that the interest be stopped for 6 months and I pay only £1 a month for the same period, which Halifax agreed to.

This suited me at the time as it allowed me to get back on my feet, 6 months later the card reverted back to 12% interest rate with interest being added to balance every month. Whilst paying £1 a month my statements had FX written at end of the account number - but not sure what this means.

Basically I didn't pay the "proper" amount for 7 months. What I'm wondering now is when I clear the balance should I close the card, as I have managed it poorly in the past, or should I leave it open and use it and clear the balance each month. What would be better for my credit rating?!

(Sorry for rambling first post... :rolleyes: )

bethanyrayne

lucy1981 wrote: »

Hi this is my first post, although I have lurked for a while... hoping someone could advise about credit cards.

I've just sold my flat and have some money which I had planned to pay off some debts and save the rest.

One have a credit card account with halifax with an approx. £500 balance which I will be paying off. In approx December 2006 I missed one monthly payment for which I was charged £20. I was on a very low income at the time and Citizens Advice wrote to Halifax and negotiated that the interest be stopped for 6 months and I pay only £1 a month for the same period, which Halifax agreed to.

This suited me at the time as it allowed me to get back on my feet, 6 months later the card reverted back to 12% interest rate with interest being added to balance every month. Whilst paying £1 a month my statements had FX written at end of the account number - but not sure what this means.

Basically I didn't pay the "proper" amount for 7 months. What I'm wondering now is when I clear the balance should I close the card, as I have managed it poorly in the past, or should I leave it open and use it and clear the balance each month. What would be better for my credit rating?!

(Sorry for rambling first post... :rolleyes: )

Use and pay off in full every month, this will get it off your file within 36 months. If you close it will stay for 72 months

jimbo26

I agree. Keep it open put a small amount on it each month and then pay it off. In three years it will show a perfect payment history.

lucy1981

Thanks for your advice, just need to remember and use it once in a while now!