Balance transfer vs credit rating

Kumamon

Hi - I'd appreciate some help with this question, and hope this is the right place.

I've got a considerable cc debt spread over 3 cards which I'd like to shift. My mortgage deal is up next May, and at that point I would like to get a better deal on that. Currently, according to MSE credit club, my score is very good and I've a good chance of success with another credit application for I'm considering applying for another card, but am worried about the impact of another application on my file and four CCs in my name when I come to remortgage. Am I better just getting my head down and paying the cards I already have off?

Currently got £1500 on one (18.5%) £8000 on another (18%) and £5000 on third (6.5%). All in my name but debt is shared with fianc! and we can pay them off at £1700 a month.

Thanks for any advice!

Superscrooge

Lenders will always consider affordability and will look at what debts you already have when they consider your remortgage.

Reducing your CC debt could help you get a better remortgage deal

SuzieSue

When my husband applied for a mortgage with HSBC they reduced the amount they would lend him because the balance on his credit cards. All the balances were are 0% with over a year to run and he had enough in savings to pay them off so he was making money on them, but it didn't make any difference to HSBC.

Other lenders might be more sensible but he didn't try any others.

Ben8282

SuzieSue wrote: »

When my husband applied for a mortgage with HSBC they reduced the amount they would lend him because the balance on his credit cards. All the balances were are 0% with over a year to run and he had enough in savings to pay them off so he was making money on them, but it didn't make any difference to HSBC.

Other lenders might be more sensible but he didn't try any others.

What so many of you don't understand is the simple fact that 0% STOOZING DEBT IS STILL DEBT. He may well have had the money to repay but in that case why didn't he? You know your husband well enough to know that he probably wouldn't go out and spend all the money tomorrow leaving himself with nothing to repay his debts, but HSBC don't! And people who buy new houses often have all sorts of unexpected expenses ....

Ben8282

To OP.
You have over 14k of INTEREST BEARING DEBT. Not even at 0%!
Now you want to apply for a new card?
Why?
To get yourself further into debt?
I would rate your chances of getting any sort of 0% card as very low.

Nebulous2

Ben8282 wrote: »

To OP.
You have over 14k of INTEREST BEARING DEBT. Not even at 0%!
Now you want to apply for a new card?
Why?
To get yourself further into debt?
I would rate your chances of getting any sort of 0% card as very low.

If he is able to save / pay off £1700 a month then he may well have the earnings to mean he has a pretty good chance of getting another offer.

OP 4 cards wont matter to get a remortgage. What is on them / how you have used them will. I'd do both in your shoes. Apply for a card, BT as much as you can to interest-free and pay them down. Go for transferring the highest interest first. Plenty of time to close one or more of them by next May if you are still worried about having 4.

keithmac

I've got 10+ cards and a 997 score, doesn't seem to make any difference to me transfering balances.

I'd deal with the two 18% cards first on a 0% (+fee), pay the 6% one down as soon as possible manually then go back and sort the 0% one out..

If you can get a decent limit on a 0 to 4% card you're saving a significant chunk of money..

SuzieSue

Ben8282 wrote: »

He may well have had the money to repay but in that case why didn't he? .

Because the was earning over £1,000 in interest at that time when Santander were paying 3%. Of course he could have paid it off but my point is that he shouldn't have to.

HSBC should have taken account of all his assets (which were several times what he wanted to borrow) not just his liabilities.

20 years ago when I took out my first mortgage there were no affordability checks which obviously wasn't good. But now that there are, they should take account of assets as well as liabilities.

bigadaj

SuzieSue wrote: »

Because the was earning over £1,000 in interest at that time when Santander were paying 3%. Of course he could have paid it off but my point is that he shouldn't have to.

HSBC should have taken account of all his assets (which were several times what he wanted to borrow) not just his liabilities.

20 years ago when I took out my first mortgage there were no affordability checks which obviously wasn't good. But now that there are, they should take account of assets as well as liabilities.

That's not the way it works, no point railing against the system, just accept it.

There were affordability checks 20 years ago, and for decades before that. They were just more simplistic.

No system is perfect, you would get much unjustified outrage when debts were called in if a lender were leaning irresponsibly.

You also need to understand or leaRn about the difference between secured and unsecured lending.

Kumamon

Thanks everyone for the replies and really useful advice.

Ben, you're right - I have a lot of debt on interest-bearing cards. But this is the opposite of wanting to get further into debt. I'll cut the card up immediately -we're not getting it to spend on. The others are also either cut up or in the freezer! According to my MSE credit club account I am pre-approved on two MBNA 0% cards, and have a 90% chance of acceptance on several others. Some have fees, but even taking that into account it is still saving a significant amount of money.

I'm really pleased to hear that people don't think another credit card (as long as it is just for balance transfer and not getting further into debt) will have much of an impact on remortgaging next year. I've been worried about another mark on my credit file - but I think that is outweighed by saving £1000+ and getting out of debt faster.

Thanks all!

Kumamon

Keith and Nebulous - thank you both very much. Keith, your advice for paying it off is exactly what I was thinking, which is reassuring!