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Getting your credit card application approved is a great feeling! With your new card, you know you’re going to earn a lot of free travel and benefit from other perks that come with the card. But what happens if you get denied?
If you happen to apply online, credit card companies don’t usually tell you why you got denied right away. They will send you a physical letter (should arrive in about 7-10 business days) that explains your case – but there are instances they might reconsider your application. Sometimes companies just need time for a human to go over your application and re-assess your case.
What If My Credit Card Application Is Still Denied?
If your credit card application is still denied after receiving your letter in the mail, the first thing you need to do is to call your credit card company right away. They will give you an explanation of why you were denied, and if they’ve made a mistake, there’s a chance they’ll reconsider your application and approve you.
If you’ve done everything you can but the result is still the same, here are some additional actions you can take:
- Do Not Re-Apply Right Away – It’s best to wait for a few days or weeks before you re-apply. Credit card companies look at your credit report and the number of inquires you’ve had. It’s a red flag for them if they see you’ve been constantly applying.
- Review Your Credit Score – Credit card companies must give applicants the credit score which was the basis for the denial. This will help you figure out the areas of your credit you need to work on.
- Try Applying For Retail Credit Cards – You can easily get approved for retail cards regardless of your credit score. Retail cards also serve as a clever way to build up your credit score so you can eventually get approved for the card that you really want in the future. Just be mindful when you’re using retail cards because they usually have higher interest rates.
Related Article: When To Cancel A Credit Card & How To Maintain Credit History
Why Your Credit Card Application Got Rejected
Companies may reject applications for the following reasons below. Try to assess yourself and see which of these areas you need to work on.
- Your Income Is Too Low – If you’ve applied for a premium credit card that’s way beyond your salary range, it’s an automatic no for the company. Credit card companies will assess if you have the capability of paying annual fees or interest rates.
- Too Many Inquiries – This is why we’ve mentioned that you must wait before applying again. Most credit card companies don’t really have a fixed number of inquiries you’re allowed (with some certain exceptions), so it’s best to play it safe.
- Your Balances Are High – Companies won’t approve your application if you have existing loans or maxed out credit lines. Pay off your debts first and keep your credits below 30% utilization to improve your credit score. Another option you have is to consolidate your debt with balance transfer cards because these cards allow you to transfer your debt to another card without paying interest for a specific certain of time.
- Unstable Work History – Companies look at employment stability so you’ll get denied if you keep switching jobs.
- You Don’t Have Any Credit History – We advise you to start with simple credit cards first to build your credit history. The Discover It credit card is a good starter card. It has zero annual fees, zero transaction fees abroad, and zero APR in your first 14 months.
Related Article: Top 3 Picks For The Best Beginner Credit Cards
What Points Panda Recommends
Credit card rejections are fine so don’t stress about it. Don’t go after those big business cards but start cards that require fair to average credit scores.
The best examples are retail cards and cashback cards because most of them have no annual fees. Start building your credit history and improve your credit score by paying off existing loans.
Start with small purchases and pay them off in a timely manner. Follow these tips and you’ll have access to the top cards in no time! If you need help, you can sign up for our travel hacking concierge and we’ll help you find the perfect credit card that suits you.