Top 8 Reasons Your Credit Card Application Was Rejected
Like all forms of rejection, having your credit card application rejected can be a very dismal and frustrating experience.
In fact, it can be almost as painful as being turned down by someone you like deeply – especially if the credit card is one that you’ve had your eyes on for quite some time.
“But why does this happen,” you ask?
In the following list, we single out eight possible reasons why your credit card application was rejected. These reasons also highlight important details that you should ascertain before making future applications, so do pay close attention!
1. You can’t afford another yet
While this isn’t meant to demotivate you from applying for credit cards, your annual income level is usually a defining element in any credit card application.
Some credit cards require higher minimum annual income levels than others, and the specific required amount is commonly indicated under each card’s application criteria. For instance, Public Bank’s Quantum Credit Cards have a minimum annual income requirement of RM36,000, while its World MasterCard Credit Card has a minimum annual income requirement of RM150,000.
As such, always check whether you can realistically fulfil the minimum annual income requirement of a credit card before applying for it.
2. You already have too many cards
Having a fleshy stack of credit cards at your disposal may put a smile on your face and spoil you senseless with payment alternatives when shopping.
However, it may also encourage banks to reject your applications for new credit cards. Owners of numerous credit cards can easily find themselves in the company of great amounts of debt, after all, and if your income level does not comfortably allow you to have more than a certain number of credit cards at a time, banks will naturally not be keen on approving your application.
The fact that Bank Negara Malaysia allows those earning RM36,000 a year – or less – to have only two distinct credit cards testifies to the weight of these criteria.
3. Check your spelling
Remember how a single misspelled word in your English essay would cost you a considerable amount of marks back in secondary school?
Credit card applications work in the same fashion. A single erroneous piece of information, misspelled word or miscalculated figure is enough reason for a bank to reject your credit card application.
This is because credit cards are issued only after accounting for and verifying your unique personal information – which translates to say that all applications are highly dependant on the accuracy of the information you provide.
4. You have an unsavoury past
While we often encourage each other to not be blinded by the past in life, banks tend to work against the grain and are generally very sensitive to each applicant’s past – particularly if that applicant has an unfavourable record.
The slightest sign of your involvement in fraud cases or any other financial crime is enough incentive for a credit card issuer to raise its red flag and reject your application. This isn’t a rare occurrence either, because fraud is a far more common crime in Malaysia than many realise it to be. Between January and April in 2017 alone, a total of 324 fraud cases involving close to RM100 million were reported to authorities.
5. Your credit report is unsatisfactory
Your credit report is essentially a track record of your performance in terms of paying off your financial commitments. From your timeliness in paying back whole loans to interest charges and other credit card bills, a credit report has it all and tells it all. Need a more comprehensive explanation? There’s a bear-y thorough one waiting for you here.
Upon applying for a new credit card, the bank you’re applying to may request for a copy of your credit report for analysis and review purposes. If your credit report has blemishes on it, and you haven’t been especially diligent in fulfilling your financial commitments, the bank in question is more likely to reject your application.
6. You haven’t been working long enough
If you think job applications are the only applications that consider your working experience, think again.
Some banks require credit card applicants to have a minimum amount of work experience under their belts. This may be used as an indicator of your ability to manage your finances, or as an assurance that you do have savings to rely on when it comes to meeting future credit card payments.
So, if you are a fresh graduate looking to apply for a credit card, you may want to factor this point into your consideration.
7. Double check your documentation
Your credit card application may have all the right details, courtesy of numerous thorough revisions. However, if you miss out on any important accompanying documents when submitting your application, things may come to a swift and undesirable end.
As such, when applying for a credit card, do be sure to check both the accuracy of the details you have provided and the inclusion of all necessary supporting documents. Some credit card issuers may be tolerant and allow you a grace period to furnish them with these documents – while others may not be so generous.
8. Your income isn’t secure enough
Freelancers and those working without the comfort of a secure and steady monthly income source, take heed.
While credit card issuers are generally open to all applications that meet a credit card’s minimum annual income requirement, some issuers may also require applicants to produce evidence that a steady income stream is present. Citibank, for instance, requires self-employed individuals to attach their bank statements for six months prior to the time of application when submitting an application for its AirAsia-Citi Visa credit card.
If your earning patterns have strong themes of inconsistency and fluctuate too much, credit card issuers may be more in favour of rejecting your application.
However, having your credit card application rejected doesn’t necessarily have to be a dark and gloomy affair. It can be an excellent teacher and stepping stone, allowing you to learn more ways to better manage your finances and improve your quality of life.
After all, in the same way that bears seem to be attracted to sweet honey, credit card issuers are definitely more attracted to those who are more capable of affording them – or, in this context, financially sweeter.
More importantly, a rejected credit card application isn’t an indicator that a person is bad-natured. It could easily be due to a mismatch between the applicant and the kind of card that is applied for; a mismatch that can be prevented with research and comparisons.
Besides the reasons listed above, banks often make it harder for foreigners to obtain a credit card. Read this article to learn about the process and tips to apply for a credit card for foreigners.