4 Reasons You Might Be Denied if You Apply for a Credit Card

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

Could this explain why a card issuer turned you down? 

When you apply for a new credit card, there is no guarantee the card issuer is actually going to let you open up an account. In fact, card application denials are more common than you might think.

Before you request a new card to keep in your wallet, check out these common reasons why you could potentially be turned down.

1. Your credit score isn’t high enough

Card issuers check your credit score and credit report when determining if you should be approved for a credit card or not. There are some companies that cater to people with imperfect credit and that may approve you for a card even if you have a low score. But for other cards — especially those with generous rewards programs — you may need good or even great credit to get approved.

2. You applied for too many other credit cards recently

Some credit card companies have strict limits for how many cards you can apply for in a short time period before you won’t be approved any more.

Card companies limit you from opening too many cards for a number of reasons. Some fear that you’re going to get in over your head in debt. Others may be concerned that you’re only opening the card to get a sign-up bonus available to new customers — not to use it over the long term.

Whatever the reason, if you’ve been on a borrowing frenzy and you try to apply for lots of new credit cards, you’re inevitably going to get cut off at some point.

3. You owe too much money already

If you have a substantial amount of debt, credit card companies may be concerned that you aren’t going to be able to pay back all that you owe as well as the additional sums they lend to you.

While the exact amount of credit you can be extended can vary based on your income, as well as by card issuer, if you’ve maxed out your cards or owe thousands of dollars on loans and have high monthly payments, there’s a good chance you’ll be denied if you try to apply for more credit.

4. You’re too young

Typically, if you are under the age of 18, you will not be able to get credit without a cosigner. And, if you’re a college student without income of your own, it may also be difficult to get extended credit thanks to protections in the CARD Act that limit lending to students without proven income sources. There are credit cards that are especially for college students, though.

In each of these four situations, you may have options if you’re denied a card. You could apply again with a cosigner, for example, or you could work on improving your credit score or paying down existing debt and try to apply again. You can also look around for a different credit card that may have more relaxed qualifying requirements.

If you are denied credit, though, stop and consider whether perhaps you need to get your financial house in a little better shape before borrowing again. This denial could potentially be a wake-up call that debt paydown or improving your credit are the best moves you can make right now.

Top credit card wipes out interest until 2024

If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR for up to 21 months! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More