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Your credit card application may be denied in a variety of circumstances but it’s not the end of the road. However, don’t be tempted to apply for another card immediately without understanding why your application was rejected. Even though a declined credit card application doesn’t affect your credit score, a hard enquiry is recorded on your file each time you make an application for credit. When you make consecutive credit card applications after getting rejected, multiple credit enquiries will appear on your file in a short time span. This could hurt your credit score and also give an impression that you’re hungry for credit, increasing your chances of being turned down again. Instead, it's probably wiser to figure out why your credit card application was declined. You can then focus on increasing your chances of approval the next time you apply by improving upon these areas.
You must be at least 18 years old to apply for a credit card. Therefore, your credit card application will be denied if you are underage. Legally, credit providers are not allowed to practise age-based discrimination. However, applicants close to or in retirement might be perceived as a higher risk by some lenders. This is due to the likelihood of relying on limited superannuation payouts, stable yet fixed government pension funds, or income generated from investments. If you've entered retirement, it's advisable to conduct thorough research before applying for a credit card, as the process involves additional considerations beyond your working years.
The majority of credit card applications in Australia require you to be a permanent resident or a citizen of Australia. Therefore, if you are yet to get your residency status approved, you might not be able to get yourself a credit card. However, certain banks may issue credit cards for temporary residents, so make sure you find a suitable bank based on your residency status.
Forms can be time-consuming and tiresome. It's all too easy to hurry through them in an attempt to complete them. You can make mistakes if you're not careful, and your application may be rejected as a result of these errors. To proceed with your application, card providers must validate the information you submit. For example, the card issuer will have to reject an application if facts such as your home address or driver's licence number are wrong and cannot be validated. As you don’t want to get your application rejected for being careless, it's worth spending a little extra time reviewing all your information thoroughly before submitting it for processing.
A minimum income criterion applies to most credit cards. Your application may be rejected if you don't meet these conditions. Most credit card providers have a minimum income threshold of around $30,000 to $40,000 annually. If you earn less, you may want to consider a low income credit card. These are usually available to those who earn between $15,000 and $20,000 a year. Premium credit cards with points and rewards programs are likely to have much higher annual income requirements than basic cards with minimal bells and whistles.
Just because you earn a six-figure salary doesn’t guarantee that you’ll automatically be approved for a new credit card. A credit provider must lend money responsibly. If they believe that you already have too much credit and aren’t in a good financial position to take on any more, they could reject your application. While assessing your application, a credit provider will typically look at your income and spending to understand whether you can afford to take on additional debt. If your spending exceeds your income or your existing debts take up a significant portion, you may be perceived as a high-risk candidate and your application may be rejected.
One of the most common reasons for a declined credit card application in Australia is a low credit score. Most credit card providers will only approve applicants who have a good credit score. When you apply for a credit card, the issuer will request a copy of your credit report from a credit-reporting agency. If your credit score is low, or you have negative information on your credit report, the issuer may reject your application. You can check your credit score for free to get an idea of how lenders may perceive your application.
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