However, there can be occasions when you applied for one but did not receive any immediate intimation. It means your application was rejected. Companies issuing these cards usually do not give reasons for the rejection immediately.
There can be more than one reason for the rejection of your credit card application. And, you may not have a clue about what happened.
Therefore, it is essential to know the different features and benefits before you apply for a credit card. It will help you zero in on the card that suits you the best. Selection of the right card can reduce the chances of rejection to a large extent.
Financial institutions consider many factors before approving your application. If it does not meet those factors, the institutions will reject it.
Top reasons for rejection of your credit card application are:
You may have defaulted on an earlier repayment
Your credit history reflects your defaults, if any. An issuing company checks your credit history before approving your application. A default will create an impression on the company that it cannot trust you for the on-time repayment. It may refrain from approving your request on this basis.
Your income is not regular
Having a regular income is the first credit card eligibility criteria. Your card is liable to face rejection if you do not provide proof of a steady source of income in your application. Also, many prestigious cards come with high-income criteria. It can be another reason why the financial company rejected your application.
You already have many credit cards
It is one of the common rejection criteria. If you apply for a credit card, your application is likely to face rejection when you already have more than three cards. Financial institutions consider it a risk factor.
You may have applied for a card recently
Some lending institutions may reject an application because you got a new credit card a while ago. It does not mean you defaulted on any payment. A probable reason for the decline may be lack of credit record and repayment habits.
You already have a high debt
The financial institution may reject your credit card application if you already have too many debts. It indicates an unsatisfactory repayment capability.
You might have made mistakes in the application form
Some applications are also rejected during background verification. Your confirmation will not be complete if your information contains any error.
If you exhaust your credit limit regularly
If you exhaust your limit every month with the thought that you can repay the amount quickly, this can lead to rejection of your application. Financing companies will be reluctant in issuing you a new card if you do so. It is advisable to utilise up to 30%-60% of your limit to increase your chances of approval.
Apply for the best credit card in the market like the Bajaj Finserv RBL Bank SuperCard to avail several benefits. Also, make sure you meet a few simple criteria like a CIBIL score of 750 and no default in repayment. The two measures are in addition to meeting the age limit and having a regular income.
Most importantly, you can get pre-approved offers which reduce the time taken for availing the product, that too through a hassle-free procedure. It is easy to get credit cards and avail the benefits if you cautiously maintain your credit history. However, learn the features of your preferred card before applying for it.