Credit cards can have a big impact on your home-buying journey in a number of ways. For example, they allow for impulsive spending during the festive season, which on its own can really hurt your chances of saving for a home deposit. If you’re applying for a loan, bank lenders assess credit limits as potential debt, which affects your borrowing capacity. Finally, your recent spending history (usually three months) is inspected closely during loan applications. The better you can save, the better your application will look to a lender. Consider eliminating unnecessary credit cards and using cash or debit cards instead. This not only helps control impulse spending, but also improves your position with potential lenders. 

Creating an effective budget is crucial for successful saving. One way to do this is to set up multiple debit cards for different spending categories, then allocate specific amounts for essentials, discretionary spending, and bills. Transfer predetermined amounts weekly, while keeping your home deposit savings separate. This method provides clear spending boundaries and helps prevent holiday season budget blowouts.

Some holiday spending and travel is unavoidable, so if you can’t save during this period, avoid taking on new debt, or neglecting your existing debt. Remember, personal loans and credit card debt require regular repayments, so keep them up. Even small weekly repayments can significantly impact your borrowing capacity, in a good way. Lavish holiday expenses should be put off until after securing your first home. You’re far better off focusing on your long-term property goals rather than short-term pleasures.