Overusing my card

asevans99

Over the last few months I've got into the habit of putting most of my everyday expenses on my credit card and then paying it off in full at the end of the month. I am now begining to think about applying for a mortgage soon and was wondering if this type of thing would affect their decision? or is it completly fine.

MoneyWasting_Expert

I would imagine that this will do your credit file more good than harm. Your borrowing monthly and repaying it in full.

YorkshireBoy

How much do you spend on average per month on the card?

asevans99

Not massive amounts between £300-400 on average I guess.

Degenerate

The only thing you may be doing wrong is failing to use a cashback card. The Halifax Clarity Rewards would suit well at your level of expenditure.

asevans99

How would that be of benefit to me? I'm not overly au faut with many of the intricacies of financial speak.

YorkshireBoy

asevans99 wrote: »

How would that be of benefit to me?

If you have a Halifax current account you can apply for the Halifax Clarity Rewards credit card. That will pay you £5 per month for spending at least £300 per month, which equates to around 1.6% cashback.

If you can pay in £1K per month (or shuffle a lesser amount so the total credits are at least £1K) then the current account will also pay you £5.

Re your mortgage situation, in my experience (with Yorkshire Building Society) they'll take 36% of your debt (12 months of 3% minimum payments) and subtract it from your salary before working out how much they'll lend you.

So, your £300 per month spending will reduce your salary, for mortgage lending 'multiple' purposes, by the grand sum of £108...so at 4 x salary that'll only reduce the amount you can borrow by a very negligible £432.

asevans99

Thanks yorkshireboy that's very informative. I'm happy banking with co-op so the halifax clarity card is not really an option I shall pursure. This forum is great It only just occured to me that I may of been doing something wrong in my credit card usage and within an hour some helpful people have put my mind at rest, thanks.

Fruit_and_Nut_Case

asevans99 wrote: »

I'm happy banking with co-op...

I hope you're also a member of the Co-operative Group and have signed up to get your dividend.

thenudeone

asevans99 wrote: »

How would that be of benefit to me? I'm not overly au faut with many of the intricacies of financial speak.

It proves that you are capable of handling the temptations of having credit without making rash decisions and spending beyond your means.