Mortgage question British airways credit card

[Studentmidwife101]

I use my British Airways credit card for everything and then pay off the balance immediately and I do this so that I can collect points (avios). Should I stop doing this immediately as I am thinking about applying for a mortgage soon.

Thanks 🙏

No. In fact, keep on doing it. Having a credit card and paying it off in full every month is a good way to show that you're a good risk.

I think it's better if you only use a fraction of the limit, that's better, so if your balance routinely exceeds half the credit limit, you might be able to improve the situation slightly by increasing your credit limit so you're only using a smaller portion of it. But that's probably a minor technicality, that's probably not worth worrying about unless you're a borderline case and need to pick up all the marginal gains you can.

But when you say 'immediately' do you mean you have a full balance DD set up, or are you making manual payments? Not that it matters, but I can't understand the people who make extra work for themselves by making payments instead of just setting up the DD and forgetting about it, apart from checking your account on payday, to make sure everything is OK for the next month, of course.

As above, so long as you are clearing it every month you are showing sensible use of credit and that you can live within your means. I do the same.

Like I will pay for my shopping on amex then immediately go on the app and pay the balance off.

Thanks guys

You need to wait for the statement to come then pay it off otherwise it doesn't usually positively affect your credit score.

Really? I don’t get a statement I will check my app settings now thanks

You will get a statement even if you aren't made aware of it. It will be in the app and lists all the transactions in the month up to the statement date and the sum to be paid, usually by a date about 3 weeks later.

Easiest thing to do is set up a whole balance direct debit and just consider it as another of your bills, so just need to check your account when you get paid to make sure there's enough money in your current account for all your bills for the coming month, including your credit card bill.

I have a list of direct debits in a spreadsheet and just add the credit card bill to it and the balance after I've been paid and its all there in front of me. I don't touch the account for anything else between pay days, it just runs itself.

OP I have the same card and all you need to do is set it up so it pays the balance off in full each month. If you do that then credit cards will help you with your mortgage as it shows you're good with money.

If you however don't pay things off and let the interest start on it then yes immediately stop that as it will negatively affect your mortgage application.

When does the interest start coming into effect? I thought that if I waited until they ask me for the balance due, then they added interest and that’s why I always rush and pay it off

If you clear it every month by the due date, you never pay any interest.

You only pay interest if you pay part of the balance, they will add it to the next statement.

Just set up a monthly direct debit to pay it off in full each month. Then it will improve your credit score.

Agree with what others have said above, to an extent. Using the card and paying it off monthly, you will pay no interest. You don’t need to pay it off the moment you use the card. Wait for the statement, or better still, set up a DD to clear in full.

However - try to make sure you are not utilising more than 50% of the limit at any point. If that means you make interim payments you should do this. Amex are usually quite generous with limits so this may not be an issue.

It sounds as if you use credit very prudently so you shouldn’t have an issue with your mortgage application.