Many buyers in the Washington, DC metro area carry some level of credit card debt. With rising living costs, childcare expenses, and student loans, balances can build quickly. When it comes to buying a home, credit card debt can affect both your mortgage approval and your long-term comfort. The good news is that you can still buy a home in DC, Maryland, or Virginia even if you carry revolving balances—you just need a clear plan.
After more than two decades helping buyers navigate the financial realities of homeownership, here is what matters most when it comes to credit card debt.
Why Credit Card Debt Matters More Than You Think
Unlike student loans or car loans, credit card debt is revolving. That means your balance can go up or down each month, and your minimum payments shift. Lenders view this kind of debt differently because:
- The interest rates are higher
- Your minimum payments affect your debt-to-income ratio (DTI)
- It may signal financial stress if balances stay high
Even small minimum payments can add up when lenders evaluate your total monthly obligations during a mortgage review.
How Credit Card Debt Affects Mortgage Approval
Your DTI increases
Every dollar of required minimum payment affects your DTI. If your ratio gets too high, it can limit your approved price range or impact the type of loan you qualify for.
Your credit score may be lower
High utilization—how much of your available credit you use—can affect your score. Even buyers with strong incomes in DC, Bethesda, or Arlington can feel this impact.
You may need more documentation
Lenders sometimes ask for additional statements or explanations if your revolving debt changes month to month.
When Credit Card Debt Becomes a Barrier—and When It Doesn’t
Not a major issue:
- Your balances are low
- Your minimum payments are manageable
- Your credit score is strong
- Your income comfortably supports a mortgage
Potential barrier:
- Your utilization is high
- Your minimum payments significantly affect DTI
- You have multiple accounts with carrying balances
Even in these cases, buyers often move forward by making small, strategic adjustments before applying.
How to Strengthen Your Position When You Have Credit Card Debt
1. Pay down high-utilization cards first
Bringing a card from 80 percent utilization to 30 percent often improves approval more than paying off a lower balance account.
2. Avoid adding new debt
Large purchases before or during the buying process can disrupt your approval and reduce your loan options.
3. Keep older accounts open
Closing a card can reduce your available credit and raise your utilization percentage.
4. Review your credit report early
Small errors or outdated balances are more common than many buyers realize. Cleaning these up before pre-approval matters.
5. Increase savings for stability
Healthy reserves help balance the risk of higher revolving debt. Lenders often view savings as a sign of strong financial management.
How Credit Card Debt Shapes Neighborhood Options
If your debt limits your price range, you still have many strong options across DC, Maryland, and Virginia.
- Arlington & Alexandria – Wide range of condos and townhomes at approachable starting points.
- Silver Spring & Wheaton – More space at modest prices with strong transit access.
- Brookland, Petworth, and Brightwood – DC neighborhoods with a mix of condos, rowhomes, and starter homes.
- Hyattsville & Takoma Park – Good value and strong community feel for young families.
With the right guidance, even buyers with some credit card debt can purchase comfortably in the region.
A Simple Plan for Buyers With Credit Card Debt
Step 1: Get pre-approved early
This reveals how your current debt affects your buying power and what you can do to improve your position.
Step 2: Prioritize high-impact balances
Paying down one or two key accounts often yields better results than spreading payments across multiple cards.
Step 3: Set a realistic price range
Your goal is not to stretch your budget—it is to find a home that supports your lifestyle, not strains it.
Step 4: Focus on quality and long-term value
Even smaller homes or condos can provide stability and strong appreciation in neighborhoods like Arlington, Bethesda, or Capitol Hill.
Step 5: Craft a strategic offer
I help buyers compete effectively while staying within a monthly payment that feels comfortable.
Why Buyers Work With Me
Many buyers I work with carry some form of credit card debt. My role is to help you understand what lenders look for, strengthen your financial position, and choose a home that supports your long-term goals. With a clear plan, you can move forward confidently—even with revolving balances.
Final Word
Credit card debt does not mean you cannot buy a home. It simply means you need a thoughtful, well-structured approach. With the right preparation, you can secure a home in the DC metro area while still managing your financial commitments.
About Matt Cheney
Matt Cheney is a top-producing real estate advisor with Compass in Washington, DC, guiding buyers and sellers across DC, Maryland, and Virginia through high-stakes moves, from luxury sales to estate settlements, downsizing, and divorce-related transactions. With over $771 million in career sales volume and 22 years of experience, including more than two decades working on complex and sensitive real estate situations, Matt is known for calm, strategic guidance and brings hundreds of successful sales to clients seeking clarity and support during life transitions.