With Christmas approaching, many Australians will be pulling out their credit cards for gifts, travel and social events. But if you’re planning to buy a property or refinance early next year, it’s worth keeping an eye on how much you spend – and how much you owe.
New data from the Reserve Bank of Australia shows Australians made a record 305.4 million personal credit card transactions in August – 3.9% more than a year earlier. While that surge reflects confidence and convenience, it can also create headaches for borrowers when it’s time to apply for a loan.
Lenders assess your overall financial position, and high credit limits or outstanding card balances can reduce your borrowing power. Even unused credit cards count, because banks assume you could spend up to your limit at any time
If you’re planning to enter the market in the new year, try to keep festive spending under control and pay down credit card balances promptly.
Contact me if you’d like to discuss how your credit profile could affect your borrowing capacity.
