Credit card use in relation to getting a mortgage.

lg0124

Hello, 

My partner and I are looking to buy a house next year and are confused about a certain aspect of credit card use. 
Currently one of us uses our credit card for all purchases on a daily basis and pays it off in full at the end of the month. 
We are wondering whether daily use of a credit card for all purchases will impact getting a mortgage as this could seem like we are unable to afford to pay from a normal bank to a lender (even though we are able to, just choose not to) and whether we should only be using a credit card for purchases every so often? Or is this not something that will be considered? Any advice would be much appreciated.

DullGreyGuy

lg0124 said:

Hello, 

My partner and I are looking to buy a house next year and are confused about a certain aspect of credit card use. 
Currently one of us uses our credit card for all purchases on a daily basis and pays it off in full at the end of the month. 
We are wondering whether daily use of a credit card for all purchases will impact getting a mortgage as this could seem like we are unable to afford to pay from a normal bank to a lender (even though we are able to, just choose not to) and whether we should only be using a credit card for purchases every so often? Or is this not something that will be considered? Any advice would be much appreciated.

We do the same, didnt stop us getting a mortgage, the lender did ask us to pay off the credit card mid month though which we did as requested.  So as long as you've got the money in the bank its fine, if you are basically borrowing off next months payslip you may have issues if asked to clear the balance. 

born_again

No, it won't effect getting a mortgage.

What will effect a application is carrying a balance each month. As it effects the affordability checks.

grumpy_codger

lg0124 said:

We are wondering whether daily use of a credit card for all purchases will impact getting a mortgage ...

The effect, if any, can be only positve if you clear the balance every month. It's a good/positive part of your credit history.

DullGreyGuy

born_again said:

No, it won't effect getting a mortgage.

What will effect a application is carrying a balance each month. As it affects the affordability checks.

Ours was a chargecard so cannot carry a balance and yet they still asked it to be cleared mid month

MattMattMattUK

DullGreyGuy said:

born_again said:

No, it won't effect getting a mortgage.

What will effect a application is carrying a balance each month. As it affects the affordability checks.

Ours was a chargecard so cannot carry a balance and yet they still asked it to be cleared mid month

I had the same, I had to have no credit card balance at all even though it is always cleared in full. I just used my debit card for two weeks, then went back to using the credit card again after completion. 

jbrassy

I've been using a credit card for everyday spending and paying it in full every month for about ten years. I have never been refused a mortgage. If anything, doing this is a good idea as it shows you are responsible with credit and live within your means. When you go through a mortgage application, the lender will ask you if you have any credit cards, what the current balance is on them and if you pay them off in full every month. If you have a modest balance through day to day spending and you pay them off in full every month, you should not be denied a mortgage on these grounds.

What is problematic is if you carry balances from month to month which attract interest or if you default on your credit card repayments. 

MEM62

As you are not carrying a balance over from month to month, it is not an issue.