Effect of rewards credit card use on mortgage application

EvenChance

Hi

I use an Amex rewards card for 90% of my day-to-day expenditure. Groceries, Amazon, that kind of thing. The statement balance typically runs to a few 100s of £, and it is paid off in full by direct debit every month.

I am anticipating buying my first house and applying for a mortgage in the coming 3-6 months. Living in the South, house prices are high, and so my mortgage/income ratio is likely to be around 4. I am trying to make sure that my committed expenditure is as low as possible over the next few months.

My question is... how will the mortgage providers look at my credit card use? Will they take into account the fact that it is used for my daily living expenditure, or will they view it as credit card debt and additional committed expenditure over and above that?

Would it be wise to stop using the rewards card for a while, and just use my debit card?

I know this may sound a daft question, but in my experience in the corporate world, things which seem logical and reasonable to me often are not. But surely it must be a common scenario.

Many thanks

K_S

@evenchance As you probably guessed, this is not an uncommon scenario at all and should have no material impact on your chances of borrowing what you need.

The only scenario that it *may* play a part is in the unlikely event that you are looking to absolutely maximise your borrowing to the last few hundred pounds, and the lender/product you're going for requires existing debt to be taken into account for affordability, even if it will be paid off before completion.

Even so, we're talking of a tiny impact if any. For example if the typical spending that you do is £1,000 monthly on the cc, that may be taken as a monthly commitment of 3% of that balance, so £30 a month, that's about it.

csgohan4

As long as you pay in full every month, it will have minimal impact. We did the same and also have an amex rewards for Cashback, pay in full. No issues with remortgage