Closed Credit Account Hurting Credit?

[joonspark7]

Hi,

I used to have two Amex cards. A Gold charge card and a Blue credit card. I had balances on both and could not back back the charge card balance in full so both of my accounts were closed. This was about a year and a half ago. Since then, I have paid back my charge card but I still have about a $5,000 balance on my Blue card.

I've only been paying the minimum on this card because I have other higher interest credit cards. Also, since this Blue card is closed, to me it seems more like a loan since I can't access the available credit anymore. Another reason for paying back my other credit cards before this Blue card is that I want to shrink my balance to limit ratio, which I'm sure would increase my credit score.

However, my question is, "Is not paying back quickly the balance on the Blue account hurting me?" "Would it be better to pay the balance on the Blue back and then later start paying back the other credit cards (which have higher interest rate) that are in good standing?"

I just simply want to know if having a balance on a closed credit account is hurting me a lot or if it's just simply viewed as another credit card or loan.

Thank you!

[Jeremy]

Having the account that is not currently in good standing is hurting you a lot more than your balance to limit ratio. Paying off the Blue account completely would be the best thing you can do, but just lowering the balance on it will not help.

[toonie25]

You have to have the perfect debt to credit ratio. But since you are stating that the account is no longer in good standing, you best bet would be to pay it off, and then concentrate on those other high interest credit cards!