Annual bills credit card vs mortgage applications.

Lum

So I'm basically debt free, the only debt I have is because I pay all my annual bills on a 0% card (road tax, car insurance & contents insurance), divide by 12 and treat it as a monthly bill, works out at around £75 a month and avoids hideous APRs. Like many people I'm currently in the market for a house in the next six months or so.

The 0% will be fully paid off at the end of this month which, of course, means I'd normally close this card, obtain another 0% card and start again. I'm fortunate that I should just be able to buy all of these items outright even though they all fall into the same month, which then would lower the amount of monthly outgoings I have to declare?

Cards I have:
American Express: Paid in full every month, £5,000 limit - Used for general day to day spending
Barclaycard Reward: Paid in full every month, £1,500 limit - Used for general day to day spending where Amex is not accepted

Sainsburys bank: £75 remaining, £4,500 limit - Used solely for annual bills to convert them into monthly @ 0%

This gives a total credit limit of £11,000. Based on a theoretical maximum spend; if I were to save nothing one month and splurge my full disposible income, I'd still only use about 13% of this limit. Close the Sainsburys card and this changes to £6,500 with a theoretical maximum usage of 23%

The blurb on CreditKarma reckons that having a combined credit limit of £15,000 makes you look good, but other guides claim that having loads of available credit you could later abuse looks bad.

So my question is fairly simple: Should I cancel or keep the Sainsburys card? Which will make me more attractive to mortgage lenders?

K_S

@lum Based on the limited information in your post, whether you have a total credit-limit of 11k and utilisation of 13% or 6.5k and 23%, it's very unlikely to have any material impact on your chances of a mortgage.

What matters is how much debt you are carrying (which may impact affordability) and how big the debt amount is compared to your income.

Lum

Zero debt as of next month, unless I decide to shove all my annual bills on a 0% card again. I guess the best thing is to just not do that and buy them all outright this year?

The utilisation reported on my credit report is just a snapshot of wherever my day to day monthly spending is as I pay the cards off in full every month. (i.e. pay in full on payday, transfer X amount to the bills account, then empty the rest of my wages into savings, leaving the current account at £0). Would it look better if I stopped doing that and switched to debit card? It'd mean losing cashback, and one month of not saving as much towards the deposit.

K_S

@lum I hope I'm not coming across as cavalier but unless you are looking to absolutely maximise borrowing to the last penny, whether you continue to use the cc (and pay off the cc balance every month) or use a debit card is unlikely to make a material to how the lender views your finances.

Lum

Good to know. I was mainly nervous because using the CC does show a balance every month at first glance.

Cool, I'll just carry on as I am then