Is it necessary to have a credit card??

I've never had a credit card and I've had no issues applying for a home loan, at 2 different banks...in the same month.

First applied with NAB and got the pre-approval in no time. A couple of weeks later after I bought the house I found a much better deal with CUA which I asked NAB to match. They gave me the run around for a while but eventually I took my business to CUA who were more than happy to have me and my application was approved in 4 days.

So from my experience no, you don't need a credit card to apply for a home loan. If anything, the specialist at NAB mentioned the benefit of not having a credit card or any other debt when applying for a loan as that would have an impact on the amount they'd be willing to lend.

Good luck

 

the right hand does not know hat the left hand is doing...common practice for banks to recommend increasing credit card limits, painful

 

I use cash as much as possible, debit card for flights and online. Everyday stuff always cash.
Credit cards have too many surcharges, haven't used one in the last 6 months.
Bank just gave me a "free" Amex. Wont be using it, guess Ill cancel it sometime.

 

They must be following council's model.

 

Right there, there is one difference our taxes are funding their wages.

 

I think it's best to use someone elses credit card eg a trade union's credit card..

You can use it for many years before you pay for it in a penitentiary.

 

I guess once they're satisfied you're able to comfortably repay the amount you're borrowing they'll jack you up with more debt to make sure you're maxed out?

I'm assuming if you do decide to refinance with another bank later on you're in the same boat again with having to either reduce or cancel your credit card.

it's quite bizarre.

 

Thanks for the replies. I was under the impression that if I had a credit card I could show the banks that I am reliable at paying the bill on time. But it looks like it's not necessary

 

They certainly can come in useful.
A few years ago when I bought a flat in St Petersburg I ran out of cash fitting it out to become a serviced apartment. I bought about 15k worth of kitchen and furniture from my card so it could be finished in a timely manner and I could start receiving rent, otherwise it would have been a very slow process until receiving an income from it.

 

I would not be without a card.

I have a question for everyone.... does anyone have a partner that checks out their credit card statements??

My partner has no clue what I spend money on and I don't think he cares, but I do have a friend who hides the statements from her partner......

MTR

 

i think there could be reasons when that could be acceptable etc she's a shopaholic and has lied in the past / got into debt he's only trying to look after her?

 

I have a number of credit and debit cards (I think about 8-9 in total). Unfortunatly due to my traveling and spending habits they regualarly get blocked by the bank. So I always ensure I have money available. Its painful, but it is what it is.

As a result of both travel and so many cards, I get quite a few unathorised transactions hitting my account. I have them set up to send me an email/txt when ever there is a transaction on the account - so hopefully I can block the payment before it is processed.
The flip side of this is when Mrs Blacky goes shopping, my phone starts going off like an alarm

So although I dont look at the statement - I know when ever she is using the card, basically the instant that she uses it.

Blacky

 

My credit card has me heading back to Vietnam Wednesday week AND has covered my wife and I's travel insurance. Safe to say I'm a fan!
Although this time I won't be using it when I'm there, last time I went and did that a month later I called my wife to ask her if she purchaed DJ decks that had appeared on my statement....

 

Now you have debit cards and throw away credit cards, there is no need for one really, it only hurts your credit worthiness, not help it.

Years ago I was in the US, I had enough cash for various things, I had a credit card as a backup, well without that credit card it would have been an awful visit there, no one would accept cash, it was credit card only in hotels and for cars.

 

That is different, they would have been making more money then and the loan existed by then

Crooks, the lot of them really.

 

The reason I originally posed this question is statements like this:

"Keep your credit file as clean as possible. In Australia for every time you apply for finance, a credit card, pre-approval or the like, your credit score will reduce. It’s therefore imperative to not place any more hits on your credit file than required – as you’re already likely to be applying for a significant number of loans over your investing career. As always, pay your debts on time and pay your bills to avoid defaults being listed on your credit file."

Building a large portfolio through structured lending | The Frontier Investor

But it looks like as you can demonstrate saving ability / being able to pay back to the bank it doesn't matter credit card or not

 

My understanding is this....

Your credit worthiness starts off as a clean slate, if you start to fail on payments and default or refuse to pay bills etc, your file get's marked and you will drop.

They are supposed to be starting to record payments now that show if your on time etc, I am not sure where this is up too.

If you have a credit card and you do pay back all the time, it is still a negative due to how it effects servicing, but if you have plenty of income and not near your service limit, it means nothing and wont be a negative.

 

We have a CC which is linked to our Qantas FF program. I have not paid for domestic flights for the past 5 years. Make sure the balance is paid off every month and you are laughing.

 

I have a credit card which came with the loan package it's got 8k limit and I'm not planning on using it. I haven't activated it and not really planning to. I'm guessing this would hurt my servicability when I go for my next IP?