Will using my credit car to buy a season ticket impact my mortgage?

bma14

Hi all,


My season ticket is about to run out and I am thinking about the best way to buy my new one. I have 2 credit cards with sufficient funds to enable me to buy an annual pass outright (£1,796) and that would probably be the cheapest way to buy it as I can balance transfer it to the other one to get 0% interest for a year to pay it off. That's a difference of paying £150 a month for the annual or £177 per month for a monthly ticket.


My partner and I are gearing up to buy a new house in the spring and I am wondering if putting this amount onto one of my credit cards would have a negative effect?


Thanks

kingstreet

It will affect affordability.

Lenders typically take 3% or 5% of a card balance into account.

bma14

Ok thank you. In that case I will just buy monthly passes until we have the mortgage - I can always buy an annual afterwards.


Thanks again.

Terry_Towelling

Buy up front and pay less overall (if at 0% interest) or pay monthly which will cost more overall. Either way will affect your ability to service a mortgage but the credit card route has a lower impact on your finances.

Presumably, you would need to demonstrate to a lender that you have enough cash available to afford a mortgage, so either the lender sees a card debt (which will be reduced by next spring) or you do your affordability calculation with £177 per month more in your outgoings.

If it were me, I'd buy the ticket the cheapest way possible because you just don't know what will happen next year. You may decide not to buy, or you may find that Brexit knocks house prices down and all mortgages become more affordable anyway.

I am assuming that a travel season ticket is refundable should the unthinkable happen and you lose your job during its period of validity.