Watch Out: 3 Reasons Your Credit Card Application Could Be Instantly Denied

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

Nobody wants to be denied on a credit card application. Learn about a few common reasons for an instant denial before applying for your next card. 

When you apply for a credit card, the best-case scenario is an instant approval. The good news is that this happens pretty often. Many card issuers offer instant approval credit cards, where if you fit what they’re looking for, you get approved on the spot.

It’s also possible to get an instant denial. In some cases, this happens because the card issuer’s computer systems determine your credit profile isn’t quite a fit for the card. But there are also certain items on a person’s credit file that can trigger an instant denial with some card issuers. Before you apply for a credit card, it helps to know what these triggers are.

1. You’ve opened too many credit cards

If you already have a wallet full of credit cards, that can make it harder to get approved for a new one. When you apply for a new credit card, the card issuer looks at how many cards you have open and how many you’ve opened recently. Some card issuers have limits in place that can lead to an instant denial.

Chase is famous for this. It has an unofficial guideline, often called Chase’s 5/24 rule. If you apply for a Chase card and you’ve already opened five or more credit cards in the past 24 months, you’re almost guaranteed to get denied.

American Express is another example. You can have a maximum of five American Express cards. This only includes American Express cards with a credit limit. Cards with no preset spending limit don’t count. But if you have five American Express cards, and they all have credit limits, then you won’t be able to get another one.

2. You have a bankruptcy on your credit history

If you’ve had to file bankruptcy, you can apply for credit cards again when it’s resolved. But getting approved can be challenging. Your credit score takes a substantial hit during the bankruptcy process. Some card issuers also won’t approve applicants with a recent bankruptcy on their credit history.

Once again, the exact rules depend on the card issuer. Online reports indicate that American Express, Chase, and Citi are strict about bankruptcy. Consumers have reported that you need to wait at least 61 months after a bankruptcy filing to get approved with any of those card issuers.

There are card issuers that are more flexible, including Capital One and Discover. Try starting with them to rebuild your credit. It’s also a good idea to check out secured credit cards. These require a security deposit to open, so they’re much easier to get.

3. Your credit score isn’t high enough

Your credit score plays a key role in which cards you can get. If you’re interested in the best credit cards, most of those require good to excellent credit — a score of at least 670 to 700.

That’s not to say your credit score is the only item that matters. The card issuer looks at much more than that as it reviews your application. It’s possible to be approved for a credit card even though your score isn’t quite as high as the recommendation for that card. It’s also possible to be denied with a high credit score.

But if your credit score is much lower than the card issuer is looking for, that normally results in an instant denial. For example, if your credit score is 500, it’d be a waste of time to look at credit cards for good credit. That’s why you should find out your credit score before shopping for a card.

You can often avoid an instant denial by doing a little research before applying for a credit card. Search online to see if the card issuer has any application rules. Also, check the suggested credit score for the card you want, and make sure your own score is in that range.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

 Read More