withdrawing cash

Credit cards: Why withdrawing cash is bad for your credit worthiness

Most people will understand that withdrawing cash on your credit card is ill advised, but it’s not all about the charges.

Withdrawing cash on your credit card is recorded on your credit file and is readily available for any potential lender to see.

Seeing credit card cash withdrawals could lead a lender assume you have no money left in the bank and are relying on your credit card to pay for essentials.

Applying for credit when you have been making cash withdrawals on your credit card could indicate to a lender that you can’t manage your money, and therefore lead them question your ability to pay back any potential loan you’ve applied for.

It is also very expensive to withdraw cash on a credit card, and although it doesn’t affect your credit score directly, it certainly does affect your finances.

Withdrawing cash on your credit card won’t necessarily thwart a credit application, but bear in mind a lender has no idea why you withdrew that money and you could appear irresponsible to them.

Decisions on credit applications are not specifically reliant on your credit score, when a lender performs a credit check they are using everything you’ve told them on your application, as well as any information on your credit file from other accounts you have.

Late payments, payday loans and withdrawing cash on your credit card are all signs you’re unable to manage your finances responsibly.

I’ve withdrew cash, will it affect a mortgage application?

I know of people who have been accepted for mortgages after withdrawing cash on the credit card, but it’s not advisable.

You should avoid applying for a mortgage if you have used your credit card to withdraw cash in the last three months to be on the safe side.

The last thing you want is to appear to be irresponsible with your money to a mortgage provider, you’re asking them to borrow you a sizable chunk of money and you want to appear as safe a bet as possible.

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