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.

Arts and Entertainment
Attenborough with the primates
tvWhy BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
News
Kelly Osbourne will play a flight attendant in Sharknado 2
people
News
A bartender serves beers
news
Arts and Entertainment
Daniel Craig and Rory Kinnear film Spectre in London
film
Life and Style
The finale at Dolce and Gabbana autumn/winter 2015
fashion
Finacial products from our partners
Property search
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

    SThree: HR Benefits Manager

    £40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

    Recruitment Genius: Office Manager / Financial Services

    £30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

    Jemma Gent: Year End Accountant

    £250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

    Jemma Gent: Management Accountant

    £230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

    Day In a Page

    The difference between America and Israel? There isn’t one

    The difference between America and Israel? There isn’t one

    Netanyahu knows he can get away with anything in America, says Robert Fisk
    War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

    The battle for Mosul will unleash 'a million refugees'

    Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
    Yvette Cooper: We can't lose the election. There's too much on the line

    Yvette Cooper: We can't lose the election. There's too much on the line

    The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
    A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

    It's not easy being Green

    After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
    Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

    Gorillas nearly missed

    BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
    Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

    The Downton Abbey effect

    Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
    China's wild panda numbers have increased by 17% since 2003, new census reveals

    China's wild panda numbers on the up

    New census reveals 17% since 2003
    Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

    Our woman in Beijing builds a new relationship

    Britain's first female ambassador to China intends to forge strong links with growing economic power
    Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

    Courage is rare. True humility is even rarer

    Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
    Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

    Alexander McQueen's astonishing vision

    Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
    New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

    Dinner through the decades

    A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
    Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

    Philippa Perry interview

    The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
    Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

    Bill Granger's Indonesian stir-fry recipes

    Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
    Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

    Harry Kane interview

    The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
    The Last Word: For the good of the game: why on earth don’t we leave Fifa?

    Michael Calvin's Last Word

    For the good of the game: why on earth don’t we leave Fifa?