What are the Reasons for Credit Card Rejection?

byMehak BaglaLast Updated: June 13, 2023
Reasons for Credit Card Rejection

Applied for a credit card too many times but never got approved?

 As simple as it may seem, getting a credit card is not that easy. The long list of eligibility conditions for various types of credit cards being the reason. However, with the right financial background and proper management of your finances, you can easily get approval for a credit card. With a healthy financial history, and a regular income, getting a credit card would not be any big of a task.

 Even if you still fail to get approval for a credit card, don’t get disheartened. We recommend you look for either of these reasons for your credit card rejection- 

  • Ensure that you have submitted all the required documents, with clear personal and professional details
  • Check if you meet all the eligibility conditions, such as the required income level, credit score or financial history
  • The bank/NBFC (non-banking financial company) fails to verify all the information provided in the application form
  • The organisation that you are employed with, is blacklisted by the said bank/NBFC
  • The bank has some other internal eligibility criteria which you fail to meet 

In order to find a valid reason behind the rejection of your application, you may contact the bank representative.

Important Things to Know Before Getting Your First Credit Card

While getting a credit card is a huge milestone for many, it is not as complicated a tool to use, if you are careful with it. Understanding the basics of how a credit card works its basic features can save you a lot of time, money and aggravation and may eventually help your financial status in the long run.  

We have listed down a few points that you must be completely aware of, before applying for a credit card for yourself- 

  • Gain complete information about all the types of credit cards and then make the right choice considering your needs
  • Apply for a credit card only when you are confident of having a stable income, whether or not you are employed
  • Begin with using your first credit card at a low credit limit. This will ensure that you only spend a nominal amount on your card and do not fall into any kind of debt traps later
  • Since this is going to be your first credit card, you need to be extra cautious about the important terms and conditions of your card. Chances are that the bank representative may not highlight all the additional hidden expenses to you at the beginning. Hence, you need to act smart!
  • Learn about all the other benefits offered by your bank such as the card’s APR*(Annual Percentage Range), applicable annual fees on your credit card, rewards and offers, etc.

*The APR usually ranges from 30%-40%

  • Read about the applicable interest charges on your credit card upon late payment of your credit amount
  • The grace period is the time period between the date of your purchase and the date when you have to repay the credit amount to your bank. Usually, the grace period is of 30 days but it is still important to confirm the same with your bank before getting your first credit card

Apply For Credit Card

Will my credit card application be rejected if I have a low credit score?
Yes. Having a low credit score implies that you do not have an impressive credit history and may be one of the major reasons for your credit card application being rejected. To get your credit card application approved, you must have a credit score of 650 or more.
Will my previous loans affect my credit card approval?
Your previous loans do not have any major impact on your credit card application. However, if your loans have remained unpaid for a long amount of time, your application may get affected. This will also affect your credit score in the long run.
How can I know my credit score?
You can check your credit score with your bank or the official website of your credit card issuing company. You can also check your credit score in a matter of seconds on the Paytm website. All you need to do is click here and follow the simple instructions.
I have too many credit cards. Is that a reason for my credit card rejection?
Having multiple credit cards may be a major reason for your credit card rejection. Hence, it is advised that you have only as many credit cards as you absolutely need. Alternatively, you may also opt to increase the credit limit of your existing credit card instead of buying multiple new ones.
How will I know when my credit card application gets rejected?
If your credit card application gets rejected, you will receive an “Adverse Action Letter” from your bank/credit card company. This letter will state the reasons for rejection of your application. Therefore, it is important that you read this letter carefully so that you have clear knowledge of the reasons behind the rejection of your application.

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