Not always. Many lenders assess repayments using the card limit, not only the current balance.
What is Credit Card Limit?
Quick definition
In borrowing assessments, lenders commonly treat your available credit card limit as an ongoing commitment.
Borrowing capacityHome loansGeneral
Overview
Australian lenders often assess credit card limits as potential debt capacity, not just the current outstanding balance. This means a $0 balance may still affect servicing outcomes.
A higher total limit across cards and store cards can reduce borrowing capacity because assessment models usually include a minimum repayment assumption on that limit.
How limits are treated can vary by lender policy, but the impact is commonly material in borrowing capacity and serviceability checks.
Why it matters
- Can reduce borrowing capacity even when cards are not used.
- Can affect serviceability calculations during home loan assessment.
- Lowering unused limits may improve borrowing outcomes in some cases.