Inescapable impact of credit cards

Loan Market's Bruce Patten

Results from a recent number crunching exercise by Mike Pero Mortgages show that mortgage borrowing power is reduced significantly if an applicant simply has a credit card.

The exercise analysed the impact of different credit card limits on the borrowing power of a mortgage seeking couple with a joint income of $130,000.

If the couple had a $10,000 credit card limit it would reduce their borrowing power by $47,000. If they had a $25,000 limit it would reduce their borrowing power by $120,000.

Mike Pero Mortgages chief executive Mark Collins says those results do not come from the total owing on a credit card, they come from the impact of simply having one.