Credit cards are an essential tool for the wallet of almost any consumer in today’s world. When properly used, credit cards can give you a sense of financial freedom that breaks the shackles of paycheck living and allows you to establish a comfortable life. However, the road is not all sunshine and rainbows. Those who abuse their credit cards risk accruing massive debt, and some people have their applications denied right from the get-go. If you’re wondering why your credit card application was denied, think about these 5 common reasons.
- Incomplete Application
One of the most common reasons for a credit card application to be denied is, in fact, an incomplete application. Credit providers need a lot of information to determine what kind of credit, if any, they are going to offer you. The information needed is usually outlined quite clearly on the application, and if they do not receive everything that’s been requested, they’re simply going to deny the application.
- Employment Stability
Credit companies want to know that you’ll be able to honor your commitment to the agreement of the credit card contract. The ideal candidate for a credit card is a person who makes a decent living at a job that he or she has held for a long time. If your income is too low, or you haven’t been with your current employer for very long, credit providers will be less than excited to offer you a credit card. You need to demonstrate a sufficient level of income and stability in your working situation in order to be approved.
Some applicants are, quite simply, too young for a credit card. Without getting into the philosophical debate of whether people of a certain age have reached the necessary level of maturity to handle the responsibility of a credit card, let’s just say that credit companies have policies. Most will not approve a credit card for any applicant under the age of 18, and applicants under the age of 21 might still be denied without reliable income or a cosigner.
- Credit History
Credit providers are going to look over your credit history very carefully; as a matter of fact they’ve already got hundreds of fine-toothed combs to run through your financial timeline. Rest assured that these companies are going to look at every time your previous cards hit a credit card machine, and how long after that the repayment was made. If you have a history of late payments or unreliable financial practices, most credit card providers are going to pass.
- Outstanding Balances
If you currently have high outstanding balances on other credit cards, this raises an immediate red flag for the company to which you are applying for a new line of credit. If you can’t pay off your current balances, why would they want to provide you with more credit? Some people have gotten into the habit of racking up significant balances on credit cards, and then using other credit cards to pay them off. This is, naturally, something that credit providers frown upon.