Credit card rejection hits three million

Hard-line lenders are cherry-picking the best customers as hard-up folk run up record debts

More than three million people have had their application for a credit card rejected in the past 12 months. .

Research from comparison website Totally Money suggests that one in 10 applications is turned down as lenders continue to play tough with borrowers who have even the faintest stain on their credit record.

But even applying for a card and being turned down can leave you with a black mark, lessening the chance of being accepted next time you apply.

But the research revealed that a fifth of those who were turned down for a card tried immediately to get an alternative from another firm. In the process causing much more damage to their credit score.

Even those with years of using plastic cards are getting rejected for many of the headline best-buy deals, plastic card companies now offer to tempt customers. Barclaycard, for instance, is currently offering 0 per cent for as long as 28 months — until the end of 2015.

"These are frustrating times for credit card customers as they are bombarded with some of the best balance transfer deals in history but they simply cannot get them," pointed out Will Becker of Totally Money.

"Consumers must be made aware that many of these deals are only available to those with a squeaky clean credit record."

In other words the credit card firms are using low-cost rates and long-term interest-free deals to cherry-pick the best customers from their rivals, leaving the rest of us on poorer-paying deals and, after being rejected, with a lower credit score.

It's not just the sting of rejection and the challenge of getting future credit that hurts, but the fact that many cardholders are effectively being forced to pay much more interest than necessary.

Totally Money reckons rejected consumers are left languishing on deals which could be costing £108m a month in interest payments.

However, there are a couple of things people can do to reduce the chance of future rejection. The first is to ensure you're included on the electoral register. That's a crucial piece of information used by lenders when deciding to borrow.

Next is to ensure you don't miss any monthly payments on your existing plastic, mortgage or other bills. The risk that you may not repay the debt will get you the blackest mark possible on your crdit score.

Meanwhile new figures published this week revealed that those that are being accepted for credit seem to be unable to control it and are running up debt in record levels. Consumers borrowed a record-breaking £8.4bn on their credit cards in August, according to official figures from the British Bankers' Association.

The figures raise fresh fears that millions are surviving day-to-day on credit, with a recent Which? report suggesting more than five million people are borrowing to pay for essentials, such as food.

The new figures revealed that more than four million plastic card transactions a day are currently being processed in the UK. Frighteningly, the figures show the total that we collectively owe on credit cards has reached an all-time high of £38.7bn.

News
peoplePair enliven the Emirates bore-draw
Arts and Entertainment
tvPoldark episode 8, review
News
Britain's opposition Labour Party leader Ed Miliband (R) and Boris Johnson, mayor of London, talk on the Andrew Marr show in London April 26
General electionAndrew Marr forced to intervene as Boris and Miliband clash on TV
Arts and Entertainment
Ramsay Bolton in Game of Thrones
tvSeries 5, Episode 3 review
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

    £24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Business Analyst - Financial Services - City, London

    £50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

    Day In a Page

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    How a costume drama became a Sunday night staple
    Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

    Miliband promises no stamp duty for first-time buyers

    Labour leader pushes Tories on housing
    Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

    Aviation history is littered with grand failures

    But what went wrong with the SuperJumbo?
    Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

    Fortress Europe?

    Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
    Never mind what you're wearing, it's what you're reclining on

    Never mind what you're wearing

    It's what you're reclining on that matters
    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence