I have a Latitude 28° Mastercard and randomly got an email offering interest free purchases for 6 months on the credit card providing I continue to pay the minimum monthly repayments.
This sounds like a great deal to me, but I'm also potentially trying to buy a first home maybe in the next six months as well, so I wanted to know if a promotion like this is likely to affect credit scores or not? I have always paid the monthly balance in full previously.
No, it doesn't involve any credit checks so doesn't effect your credit score. Unless, of course, you pay late or default as pointed out by Dollar General above.
Dunno what the above commenters are smoking, but it will affect borrowing power, just depends if your income/circumstances will off-set it.
Regardless of the balance, the credit limit will be a liability when applying for a loan. Purchases won't, if paid off, but the limit itself will.
Correct, the credit limit on credit cards impacts borrowing capacity at 5-10 times ratio (e.g. $10K limit on your credit card reduces borrowing capacity by $50-100K) - rationale being that credit card is revolving line of credit which allows borrowers to take unsecured "loan" at any time at the interest rate that is 4-5x higher than the RBA and/or mortgage rate.
Sorry I wasn't very clear, I would plan to cancel the credit card before taking a loan, the bank said they can put that as a clause in the loan that I must cancel all credit cards before commencing the loan.
Basically I'm trying to make use of all the benefits of a credit card while I can, but without affecting my borrowing power. So as long as I pay the monthly minimum it wouldn't affect my credit score or anything, and when I'm ready to potentially purchase I'll pay it off and cancel the card.
The bank will take your line of credit, say $25k , multiply it by 5 and reduce your allowable loan by that much.
So yeah, close your credit cards before getting a loan
Some comments here are not understanding your situation correctly (or may be I am thinking the other way around).
Here's what I think your situation is: You already have a CC and are just asking if accepting the offer of 6 months interest free promo will effect your credit rating?
The answer is: No, it won't. Just accepting the offer wouldn't do anything as long as you pay it off and cancel your credit card before the loan assessment. Of course, they are all correct in explaining how a CC will reduce your borrowing capacity, but that will happen regardless of accepting this promo offer (if my understanding of your situation is correct).
Thanks, yes that is what I was trying to ask!
Does opting for the 1.99% offer mean there is no interest free period?
No idea, I got an email that was probably targeted, and was 0% interest. If you didn't get an email then I'd guess not.
Not unless you pay late, go into arrears or default
If you pay on time, there’s no impact on your credit score