Login Now to remove this and all advertisements (GOLD and SILVER members)
Not a member? Register Now for free

How does a charge card affect obtaining future credit?

Status
Not open for further replies.

andye

Established Member
Joined
Jan 14, 2013
Messages
4,088
Virgin
Platinum
Flights
My Map
I was curious about this but haven't managed to find a definite answer anywhere on the web so thought this forum would know.

When you apply for a mortgage (and many credit cards) one of the factors is your existing credit limit (i.e the bank will usually assume you need to repay the payments as if you were using full credit limit when assessing affordability). When a mortgage application is at the limit of affordability many financial advisors suggest reducing the credit limits on your cards to improve accepatance.

How is a Charge card viewed in these circumstance? They will often have quite large lines of credit but my thinking is as they are repaid in full each month they shouldn't count as a debt. I can't recall ever seeing sections for charge cards on applications previously.

(Obviously you take a hit to your credit score when you first apply)

Thanks
 

moa999

Enthusiast
Joined
Jun 23, 2003
Messages
11,431
Flights
My Map
I suspect they are generally viewed as a potentially non-repaid balance
 

dalereardon

Active Member
Joined
Nov 6, 2012
Messages
518
Hi,

Just did a home loan application with a CBA mobile banker so asked this very question re Amex gold charge card. He said the CBA assigns a nominal limit of $5000 for such a card and assumes minimum payments on that amount.

Don't know re other banks.

Dale.
 

yohy?!

Established Member
Joined
Nov 30, 2009
Messages
4,485
Flights
My Map
charge cards don't have lines of credit in the sense of debt that can be rolled over - I'd imagine the bank would assign a nominal amount you could potentially spend in a month which would be reasonable given typically if you didn't repay your balance one month your charge card would be restricted or severely limited in how much you could spend until it was brought back to good standing.
 
Credit cards which earn frequent flyer points is a popular way to earn frequent flyer points. You can receive thousands of points on everyday spend. And, many of these cards offer generous signup bonuses! Compare to find the credit card that best suits your needs.

Recommended by the Australian Frequent Flyer

moa999

Enthusiast
Joined
Jun 23, 2003
Messages
11,431
Flights
My Map
But its the black-hat scenario the banks worry about.

You lose your job, go out drinking, crash the car, lose $$s at the casino,
and max out everything in a month (as you can)
 
Status
Not open for further replies.

Community Statistics

Threads
86,413
Messages
2,087,975
Members
53,791
Latest member
sunshineecocleaners
Top