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
Night job: Pacha nightclub DJ, Joan Ribas, is the new kingmaker on the island
news
Arts and Entertainment
Nicole Kidman plays Grace Kelly in the film, which was criticised by Monaco’s royal family
film'I survived it, but I’ll never be the same,' says Arash Amel
Life and Style
Retailers should make good any consumer goods problems that occur within two years
tech(and what to do if you receive it)
Life and Style
healthIf one was missed, vomiting blood was seen as a viable alternative
Life and Style
tech
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: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

    SThree: Trainee Recruitment Consultant

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

    Guru Careers: C# Project Team Lead

    £55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

    Guru Careers: Graduate Editor / Editorial Assistant

    £16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...

    Day In a Page

    Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

    Blundering Blair quits as Middle East peace envoy – only Israel will miss him

    For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
    Fifa corruption arrests: All hail the Feds for riding to football's rescue

    Fifa corruption arrests

    All hail the Feds for riding to football's rescue, says Ian Herbert
    Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

    The Kurdish enclave still resisting the tyranny of Assad and Isis

    In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
    How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

    How I survived Cambodia's Killing Fields

    Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
    Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

    How Stephen Mangan got his range

    Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor
    The ZX Spectrum has been crowd-funded back into play - with some 21st-century tweaks

    The ZX Spectrum is back

    The ZX Spectrum was the original - and for some players, still the best. David Crookes meets the fans who've kept the games' flames lit
    Grace of Monaco film panned: even the screenwriter pours scorn on biopic starring Nicole Kidman

    Even the screenwriter pours scorn on Grace of Monaco biopic

    The critics had a field day after last year's premiere, but the savaging goes on
    Menstrual Hygiene Day: The strange ideas people used to believe about periods

    Menstrual Hygiene Day: The strange ideas people once had about periods

    If one was missed, vomiting blood was seen as a viable alternative
    The best work perks: From free travel cards to making dreams come true (really)

    The quirks of work perks

    From free travel cards to making dreams come true (really)
    Is bridge the latest twee pastime to get hip?

    Is bridge becoming hip?

    The number of young players has trebled in the past year. Gillian Orr discovers if this old game has new tricks
    Long author-lists on research papers are threatening the academic work system

    The rise of 'hyperauthorship'

    Now that academic papers are written by thousands (yes, thousands) of contributors, it's getting hard to tell workers from shirkers
    The rise of Lego Clubs: How toys are helping children struggling with social interaction to build better relationships

    The rise of Lego Clubs

    How toys are helping children struggling with social interaction to build better relationships
    5 best running glasses

    On your marks: 5 best running glasses

    Whether you’re pounding pavements, parks or hill passes, keep your eyes protected in all weathers
    Joe Root: 'Ben Stokes gives everything – he’s rubbing off on us all'

    'Ben Stokes gives everything – he’s rubbing off on us all'

    Joe Root says the England dressing room is a happy place again – and Stokes is the catalyst
    Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

    Please save my husband

    As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada