Bank customers with high credit card limits are less likely to be approved for a home loan, an expert has said.

Lisa Montgomery, head of consumer advocacy at Resi Mortgage Corporation, told the Australian Associated Press (AAP) that lenders consider a high card limit to reduce a borrower’s capacity to repay a mortgage.

She added that lenders were not concerned with the amount a customer owed on a card, only the total that they could be liable for if they spent on it to the maximum.

“A borrower may only owe $1,000 on a limit of $15,000, but lenders must assume that the borrower can owe that $15,000 the day after settlement, placing them in a potential hardship position,” Ms Montgomery told the news provider.

The advice will be of interest to anyone who decides to compare credit cards or compare home loans. M

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