Serviceabilty: Mortgage vs. Credit Card

When you apply for a credit card is it the same assessment for serviceability as when you apply for a mortgage?

In a case where you have exceeded normal serviceabilty through use of Tier 2 lenders are you likely to be knocked back for a credit card?

 

Different. Credit cards are easier to qualify for because if the lower limits

 

Thanks Terry, we only want to go for about $5k but obviously don't want a knockback on the credit rating. Is there any way to see if it is likely to be successful before making application? Similar to a serviceability calculator.

 

Best bet is to approach a lender directly and ask. Tell them you're not wanting to submit an application unless they're reasonably certain it will be approved.

Cheers

Jamie

 

I don't think so, credit card apps are more automated then home loans. You will have to apply and see.

 

Some lenders use home loan data (if you've recently applied for a loan with them). E.g. if you pass servicing with CBA by $1, you may find it difficult to go and obtain a CC with a 30k limit the day after. Not sure how long they use this data for though. Others don't, do the same thing with NAB and you'll have credit card and limit increase offers posted to you in no time.

 

Last loan was through Liberty, I was looking to take advantage of an extended interest free period for a few large expenses next month.

 

I think you should be OK with some CC providers.

Best to call around and ask how they assess serviceability. It will be far simpler than a home loan and you'll likely find you pass under that criteria.

 

About 12 months ago I applied online for a NAB credit card, 50,000 bonus frequent flyer points, no fees. I filled out all the info and expected to have to provide ID later. I previously had an account with NAB but nothing currently. Anyway, the card turned up and I went into the bank with ID to activate the card. ID had already been verified and the card was active when it was posted out! Horrifying! If anyone nabbed the card they would have been able to tap and go up to $100 a time, up to the card limit without me ever knowing

 

Compliance and security are just pesky things that get in the way of the banks making money!

 

Remember CC limit will be used in future serviceability calcs for mortgages. If you get one, best to use, pay off balance entirely each month, not incur interest and certainly don't use it to get that new 65 inch TV! i.e. consumer spend (unless it is for a furnished property you are letting out and can depreciate)

 

We won't be getting a loan again for quite a long time, this is basically to park a few large expenses (car rego, council rates etc) to buy us time to build up more of a cash buffer. We've had a few big expenses recently that couldn't be avoided and drained our account.

 

Put it all on 0, I mean 0%. There is good debt, i.e. tax deductible debt and bad debt, non-tax deductible debt. Unfortunately you are talking about the latter unless the rates are for IPs but even that, if the card is charging you interest, I would be very very careful. People get stuck in a downward debt cycle when they start relying on CCs. I used to cycle good debt on 0% balance transfer cards in the UK for several years. i.e. use the CC towards a house deposit, then when the 0% was coming to an end, move it to a new card. The games we play...

 

Better off getting a low rate personal loan. You'll have paid it off before you know it.

Compare personal loans from $3,000 up to $75,000 | finder.com.au

 

I was looking at cards with an extended interest free period and would be paying it out before interest starts accruing.

 

Good. If you are focused on paying it off then by all means a 0% card is a much better choice.

0% Purchase Credit Cards - Get up to 12 months interest-free | finder.com.au