0% credit card oustanding balance but applying for mortgage

GregH

I have £3900 outstanding on a Barclaycard 0% offer with another 9 months to run.

I am currently making the minimum payments and putting around £600 into a savings account every month, with an aim to pay off the outstanding Barclaycard balance once I have enough. I currently have around £2200 in savings.

My wife and I have recently put our house on the market and are looking to move to a larger place.

My question is, with regards to credit scores and mortgage applications, am I better off going the way i am, saving and then paying off the amount in full or would I be better reducing the Barclaycard balance with larger monthly payments?

I would be grateful for your thoughts.

forgotmyname

If your savings are paying you more insterest than the credit card is costing you.

When you apply for a mortgage they will offset the CC balance. So you may say yes we saved £5000 but we have £5000 owing on a CC. They may think so you saved nothing. Because you now owe as much on the card.

Each lender will have their own criteria. But wont being debt free help your mortgage application?

GregH

ForgotMyName - Thanks for that. You raised all of the things I was thinking. Yes, I am earning interest with it being in savings, which is why I have done that up until now but my secondary thought was that surely it would look better if I had a much smaller CC balance.

Looks like I will be reducing the old CC balance rather than saving.

Thank you!