Why Your Credit Card Application Was Rejected
A credit card works on your ego. If your credit card application is approved, you feel good. It’s like your credit-worthiness has found its supporter, more so when you get a gold or platinum card. With words like “Welcome to the world of privileges”, one can’t help but feel elevated at being acknowledged that you are worth something. On the other hand, when your credit card application is rejected, you are probably going to get deflated, annoyed and angry because you are deemed not good enough. But is it really just about being credit worthy? Let’s take a look at some of the common reasons why a credit card application gets rejected.
1. It is incredible but true. Some card applicants did not bother to find out the minimum criteria to qualify for a credit card! Make sure you are eighteen, have a steady income or have a dependable source of income. Failure to comply with those two minimal requirements is almost an instant rejection of your application.
2. If you are not that rich, don’t apply for cards out of your league. Gold and platinum cards are reserved for those who have much higher income than those with classic cards. Be practical and choose a card which reflects your current credit status. Whilst you might not get a direct rejection but a lesser card instead (eg. a gold card application is countered with a classic card offer), you might have wasted your time and effort making the application in the first place.
3. If a question is asked, answer it. Make sure you fill out all the information required and if you are unsure, ask. Leaving a section blank is likely to result in a rejected application. Make an effort to answer all questions and do note that no question is too trivial to ask by the credit card company.
4. Don’t lie. If your salary is $36000 per annum, don’t inflate it. Whilst credit card companies are keen to approve cards and increase their card base, they also conduct stringent check as a matter of financial prudence. A complete credit history check is not uncommon and income will be verified in most cases. You might risk being blacklisted from future applications if you were found to have given untruthful answers in your credit card application.
What To Look For When Applying for a Credit Card
So, you too are planning to go to get your first credit card? Or you are planning to add in more credit cards to your already existing ones? There are certain points you can check before applying for a credit card to find whether it is the right one for you.
Initially, you will need to find out that the credit card that you are going to apply is from a reputed company or bank. Research whether the credit card company is indeed customer friendly and does not charge you with hidden charges and other unknown charges without your knowing. This can be found online and search for the reviews of the credit card you are going to apply. And then you can decide whether to go for the credit card or not.
Now, after deciding which credit card to go for, now you need to look for the joining fee that these credit card charges. It is applicable for most of the credit cards available in the market now. Now most of these credit cards come with a joining fee. If you could ask the bank or the credit card company, they would mostly waive off this joining fee in most cases due to the competition that they face in getting new customers. This will need to be requested from your end to get this waived off, else you will end up paying the joining fee.
The next important things you need to look before applying for a credit card is that whether there are any hidden charges applicable on your credit card usage, etc. For example, some credit card companies will charge you for not using your credit card for a specific amount of time. Do read those terms and conditions and special clauses being sent along with your new credit card without fail to understand it and hence preventing incurring such unknown charges in the future. Reading the terms and conditions is extremely important for any new credit cards that you receive.
Also look for special offers and deals and freebies that you get along with some credit cards and claim the same.
If you follow these advise and know how to use your credit card/cards efficiently, then you will have a pleasant experience with credit cards, else it would turn out to be a huge burden for you. Also make sure that you don’t end up getting lots of credit cards, stick to only one or two.
Advantages and Disadvantages of Credit Cards
Credit cards like any other products have their own advantages as well as disadvantages too. Although credit cards can be termed as a necessary evil, it could turn out to be a necessary angel if one knows how to use it appropriately as well as efficiently.
Although there aren’t many positives to boast of with regard to credit cards, still some advantages of using a credit card are, it will come in handy during emergencies when you needed money or needed to purchase something urgently. Also that you don’t always have to carry cash everywhere you go, either for shopping or emergencies as even almost all hospitals accept credit card payments these days.
There are various offers and deals which mostly are available only on credit cards and not elsewhere.
If you could pay off your credit card balances fully every month, you could enjoy the 40 to 50 days interest free credit period, mostly. Sometimes you will get good offers like 0% interest charges for the purchases or transfer balances from other cards. Also using the rewards points you can actually get free gifts, and this is just for using your card for your regular purchases. Some credit card companies will also give you free gifts for being their customer for long time.
Now, for the negative points; if you really don’t know how to use your credit card efficiently then you are asking for trouble. You might end up with huge credit card debts which will become a burden too hard to handle for you. You might end up buying or owning the products you desire instead of those that is a necessity and hence end up with huge credit card debt. The credit card companies charge you with many hidden charges without your knowing.
The interest rates for credit card if not paid fully is far higher when compared to other mode of lending. Some credit cards charge around 35% per annum for the unpaid balances. With the increasing amount of credit card frauds, if not used carefully, these credit card info is stolen from you through various means, then you might end up with huge bills misused by someone else. Hence you will need to be more extra careful in protecting your credit card and thus adding you extra burden on personal security.
Although, credit cards may have more negatives than positive, if used it properly it would just be as useful as your regular money.