Credit card debt a good thing?

kingstreet

Only Yorkshire Building Society group members, YBS, Chelsea, Norwich & Peterborough and Accord have ever had an issue with unused credit, as far as I can remember.

pathtofreedom

I'm just going through a mortgage application, I have 1 card on a similar deal to you with 4700 on it. Another credit card I pay off each month in full just for the cash back.

Because of my salary they are happy with that level of debt as that is all I have, no car loans or any other credit. They have counted my current balance on the one I pay each month as well as part of the debt. As I passed all the affordability there is no point me giving up this 0% card and dipping into my savings. If I don't move by May though I'll just take paying the extra interest for a couple of months rather than risk applying for a new card though I think.

So it all comes down to what other loans, cards, credit agreements you have, compared to the salary you have really. I'm not trying to borrow the max they could possibly lend me though so that might help in my situation as well.

AnotherJoe

tinotuna wrote: »

I now found this on MoneyFacts:

Lenders take into account the amount of outstanding debt you have, and the monthly payments you make, when assessing whether you can afford the mortgage. Worryingly, some lenders may even assess affordability using the potential amount of debt you could have, assuming that you have maximum balances on all your cards and overdrafts, instead of the balances you do have.

Link here: moneyfacts.co. uk/guides/mortgages/improve-your-chances-of-getting-accepted-for-a-mortgage/

See why I am very confused by all this? Can I ask why/how you've come to that conclusion?

Sorry if this reads rudely, but I just want to understand this!

Doesn't read rudely at all, fair comment, I was too definite, there are always exceptions and edge cases.
All I can say is I 've never encountered this, despite having umpteen credit cards with high limits but little debt (mostly due to offers on airmiles and the like)

Maybe it's an element of covering their rear ends,, maybe it's one or two ultra cautious lenders. I suppose there are always some exceptions, but if you might be tempted to go and splurge you could of course always up your limits after getting the mortgage, or stop paying it and spend the mortgage on a Lamborghini instead. If it bothers you as a risk call your providers and have those limits lowered.

Ask your broker, they will know for any given lender if it's likely to be an issue.

Mallotum_X

Most cards let you reduce the max limit. If you think there may be an issue just get them to drop the limit from 8 to 3k