When Posh Spice goes shopping the question is normally, how much is she going to spend rather than can she afford it? But earlier in the year whilst on a spending spree in the fashionable Grove area of Los Angeles, Posh had what celebrities might term a "card malfunction."
Posh had run up a $12,000 bill in Abercrombie and Fitch which she wanted to put on her card. Much to everyone’s astonishment the card was declined. After a minor tantrum and a few calls to the card company the problem was eventually resolved.
Many of the British public are currently facing a different kind of rejection problem however, the fear of being accepted for a card at all.
Card companies tightening their belts
MoneyExpert have found that application rejections have soared with millions left wondering whether they can get a card or any credit at all.
This is all because lenders and banks have been hit by increasing levels of bad debt as well as the current credit crunch which has prompted many firms to tighten rules on new applications.
Application rejections are currently being felt most amongst young adults. MoneyExpert’s research shows that 15 per cent of people aged between 25 and 34 were turned down in the last six months, more than any other age group.
By contrast, those people of pre-retirement age were the least likely to be declined. Those aged between 55 and 64 are generally viewed as a low risk by card companies.
What can you do?
If you’ve been rejected for a credit card then don’t panic, MoneyExpert.com has a number of tips which could get you back on track.
- If you get rejected for a card don’t instantly reapply for other cards. Card companies will be looking at your credit record to see what you’ve applied for in the past and whether you’ve been accepted or not. If you make a number of applications in a short space of time you could look desperate and the card company will be less likely to accept you.
- Check your credit report and score. You can request a copy from company’s such as CreditExpert. If you notice that any of the details are incorrect ask to have them changed as they could be damaging the score which companies use to asses your credit worthiness.
- It’s worth remembering that the credit industry likes to deal with people who have a history of borrowing and making repayments. So, if you have existing credit or store cards start making regular repayments.
At the moment there are still plenty of competitive credit card deals available on the market.
If you are determined to get a credit card but think that you’re unlikely to be accepted for these deals then you could consider a "sub prime" card. These cards will have higher APRs than the best value cards on the market, and may have smaller credit limits. If you’ve been rejected for a number of cards you should ask yourself whether you can afford a card like this. If however you do take on one of these cards and you manage to make regular repayments then you could see your credit score improve making you more likely to be eligible for a more competitive card.
Nobody likes being rejected for anything, and unless you are a Spice Girl then throwing a tantrum isn’t likely to get you very far. There are plenty of steps you can take to improve your credit rating as we’ve seen and once it’s up to a good level be sure to make the necessary repayments to keep it that way.
Click through to MoneyExpert for money saving hints and tips