Credit Cards - Finding It Hard to Get Approved

Fever4shakin on 21/11/2019 - 12:50

Hi, I'm looking for some general advice or guidance on applying for credit cards in these post-royal commission times.

A bit about my situation - I earn around $80k, have a modest mortgage, A HELP debt, no car or personal loans and currently hold two credit cards. I checked my credit rating back in Sept and it was listed as 'excellent'. Since then I have been instantly declined for two credit card applications (weeks/month apart). I know it would be better to cancel my existing cards before applying but I am one of those people who put everything on credit and pay off the monthly balance and don't want to stop doing that in the interim. My combined credit limit is a little high but not even near the maximum credit limit of the cards I am applying for (I am also well over the minimum salary requirements). I have the minimum possible credit limit for each card I hold. I am worried that if I cancel my primary card (which I am quite happy with) I won't get approved for a new one. The reason I am looking for a new card, as many of you will appreciate, is that my first year free is about up and to take advantage of new customer offers.

What have others experiences been since the royal commission? I am not planning on applying again anytime soon - how long should I wait before I try again?

Financial Credit Card

Comments

  • Hybroid on 21/11/2019 - 12:53

    I am one of those people who put everything on credit and pay off the monthly balance and don't want to stop doing that in the interim.

    Just curious, why do people do this? I can understand the appeal of Afterpay where you split payments fortnightly over 2 months with no interest but what's the point of paying with credit then paying it off with debit monthly if you already have the funds? Is it for things like price protection with credit cards? Or the obsession with airmile points?

    • jjjaar on 21/11/2019 - 13:01
      +14

      For me it’s points and monthly pay.

    • Fever4shakin on 21/11/2019 - 13:13
      +10

      points + plus the fact it can sit in my savings and gain a tiny amount of interest.

    • garetz on 21/11/2019 - 13:13
      +3

      Convenience ?

      If you have an offset mortgage, it just makes sense. The longer you keep your money in your offset, the better off you are.

      Plus i like to keep all my transactions on one statement.

    • apsilon on 21/11/2019 - 13:26
      +6

      Convenience, points, price protection and other insurance.

    • spiff on 21/11/2019 - 14:09
      +3

      Paid $1.5k in taxes for the experience of business/first class flights which would have otherwise cost $24k, that's why I do it. If that's called an obsession then so be it. Also claimed over $700 in price protection.

    • brendanm on 21/11/2019 - 14:13
      +3

      Points, price protection, extra insurance on products, can do charge back if something goes wrong. Travel insurance etc etc.

      • afah0447 on 22/11/2019 - 14:28

        These 'offers' are inducements to keep people locked in debt with them.

        Most are a false economy as very few people are financially disciplined enough to pay off their balances in full.

        Steer clear of credit cards people.

        • brendanm on 22/11/2019 - 14:40
          +4

          Obviously if you lack any sort of willpower or discipline, then you shouldn't have a credit card. But for those of us that pay them off and pay no interest, it works out well.

    • lainey13 on 21/11/2019 - 23:00

      Money working harder in an offset or high interest savings account.

    • MitchyD1989 on 22/11/2019 - 10:39

      Is it for things like price protection with credit cards? Or the obsession with airmile points?

      For me it's exactly both of those things. I have 2 credit cards (Amex as my main and a Visa as backup for places that don't take Amex), I put all my purchases on those and use an Online Saver account as an offset for both, which I pay the balances off in full once the monthly statement is ready. That way, I'm not paying any interest on the credit cards, and the money I've "spent" is actually earning me a bit of interest in the offset account instead.

      The price protection/extended warranty has saved me a few times, and with the frequent flyer points I earn (plus the free return flight included with the Visa card), I've saved a lot more on flights than the annual fee of both cards combined, so it's been well and truly worth it for me.

      TL;DR: saves me money in the long run thanks to free flights that would normally cost more than having the credit cards.

  • elgrande on 21/11/2019 - 12:56
    +11

    If you have been denied twice I would strongly suggest you stop applying.

    • Fever4shakin on 21/11/2019 - 13:22

      I am. I only applied for the 2nd one thinking I had nothing else to lose and curiosity.

      • HighAndDry on 21/11/2019 - 13:43
        +2

        Each application actually hits your credit score.

        • Fever4shakin on 21/11/2019 - 13:46

          I'm aware.

        • pooman on 21/11/2019 - 14:48
          +1

          Not necessarily I think. I got knocked back for an ING card because I'm a contractor and I believe they didn't even do the checks because of this reason. I checked my credit report and there were no records of this. My assumption is that it only affects your record if they actually do the checks which may or may not have happened in your case. I'd give them a call and find out why you got rejected. That's what I did.

  • thrillho on 21/11/2019 - 12:56
    +1

    Worst case you cancel the cards you have, pay for stuff with cash/debit for a couple of weeks and then get a new card within the month? Not a huge sacrifice.

  • k-rokfm on 21/11/2019 - 13:02

    The reason I am looking for a new card, as many of you will appreciate, is that my first year free is about up and to take advantage of new customer offers.

    If youre going to cancel it anyway, whats it going to cost you for a couple of weeks without putting anything on card? You say you have 2 cards but only mention that you are going to cancel this one? While not outlandish, there are a couple of things that dont add up.

    • Fever4shakin on 21/11/2019 - 13:11

      The other is my amex (no fee) that I keep around for cashback offers, also not helpful for everyday spending as it is not universally accepted.

  • spitfire6 on 21/11/2019 - 13:13

    Is it Citi? There are rumours about 3/6 months limit with auto-decline if broke the "rules". It's not as clear as what they did in the US, but I can see it's coming down here. Don't churning just for the sake of it, flying too close to the sun and you will get burned one way or the other.

    • Fever4shakin on 21/11/2019 - 13:19

      ANZ and ING. I won't be applying again for at least another 12 months but curious to see what others think.

      • Emli on 22/11/2019 - 09:13

        My husband applied for an ANZ credit card. $100 000 income with an existing card with $2000 limit. $32 left to pay on the mortgage ( but bank counted it as 180 000 as we could redraw on it) and they valued the house at 600 000 (50% less than two years earlier and against market trends).

  • sghetti on 21/11/2019 - 13:19
    +1

    Regardless of whether you pay off the outstanding balance, lenders assess you on the possibility of maxing out those credit limits and what sort of risk that would entail.

    It's a tricky one, many called for a commission into dodgy lending practices, this is the result (I'm not saying it shouldn't have occurred by the way). Lenders are now required to interrogate your expenses more closely, now many are complaining that the lenders are spying into their personal lives too far.

  • arkie0 on 21/11/2019 - 13:23

    I just got declined for citi, first decline while churning in the last 3 years.

  • netjock on 21/11/2019 - 13:24

    Not sure what a modest mortgage to you is. You haven't told us what you filled in as your expenses. Also if you are apply for a card with a $100k limit it might not help. No easy answer. Just us telling you stuff that won't change their decision. Maybe ask what information they hold on you and see if there is something they know that is incorrect.

  • thatonethere on 21/11/2019 - 13:27

    It might help discussion if you would say how big the credit limit is on the two credit cards you have already.

    Often banks will assume the worst when assessing new credit (not unreasonable) that you will consume the entire credit limit of existing cards after you have been approved for the credit card.

  • blueyez on 21/11/2019 - 13:44
    +3

    My suggestions;

    • contact the companies you were declined by to get more information as to why you were declined - in some cases they can review and accept the application
    • reduce your card limits on your existing cards
    • wait more than 3 months (ideally 6+ months) before applying for another card
    • jjjaar on 21/11/2019 - 14:10
      +1

      Actually yeah, do this. I was declined once and called up to discuss and all they wanted was me over the phone saying I would cancel one of the cards. I then got approved.

      • Fever4shakin on 21/11/2019 - 14:36

        oh cool. I think this is what's bugging me - the uncertainty of why it's been rejected. I suspect it is my current credit limit so would be good if they could confirm.

        • jjjaar on 21/11/2019 - 14:53

          Pretty sure there was a specific line to call for queries on applications too.

          But yeah, worst case, they don’t change their mind. Nothing to lose.

  • lainey13 on 21/11/2019 - 23:03
    +1

    What's your combined card limit? What's your modest mortgage? How much is your HELP debt? What's your line of work and status at work (casual? contract? newly started)? All of it can combine to deny your application.

  • HeWhoKnows on 22/11/2019 - 07:44

    OP earning $80K?
    Thats a very good income and much more than others who have multiple credit cards.

    Something in the system is tripping your application.
    You need to find out why you are being declined.

  • thatsthat on 22/11/2019 - 08:54
    +1

    ANZ is hyper focussed on your current credit balances. Resize them down as small as you can tolerate or they will keep denying you.ie you don’t necessarily need to cancel your existing cards just knock them down to 5-10k limits.

  • Gelato on 22/11/2019 - 16:19

    if you don’t mind I ask
    - what’s your mortgage repayment
    - what’s your combined credit card limit
    - what’s your monthly repayment for HELP
    - how much expense did you declare in your application
    - how long you’ve been employed in your current role

    Lol I asked too many questions..but I’m sure they’re all relevant

  • Danstar on 22/11/2019 - 16:24

    Didn’t read all other replies but you got kids ?

  • [Deactivated] on 24/11/2019 - 10:44

    It's because you have a mortgage. lol.

    Not realistic to pay that down in the short term, but the risk metrics have changed.

    If you were renting, then 100% you would be able to refinance.

    • Danstar on 24/11/2019 - 18:25
      +1

      I have mortgage and 2 kids and got approved for my last 2 cards

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