Reason for Credit Card Decline: Too Many New Customers Today?

tescomilk

I've just been pondering this for a minute or two after replying to another thread. I think I maybe on to something here, or maybe I'm just daydreaming instead of working but here goes...

So there's been lots of comments I've read since joining these forums about reasons "Why Have I been declined credit card XYZ?" Some people are genuinely in shock. :eek: People who think there credit file is AAA+ or scores 999 in those useless paid reports. We all know the common reasons for declines (poor credit, no credit history, late payments, defaults, ccjs, etc) however it gets interesting when people with so called Perfect Credit Cards get declined...?

I now wonder if the final and simple reason is this:

Too Many New Customers Today - Thank You.

A daily credit card application limit would make sense to a lot of companies. Firstly, it would stop them from "Over Lending" their risk agreed quota and secondly it would even allow them to Cherry Pick their preferred new customers by terms of a "We'll be in touch" message.

I'm aware that some companies won't give an out-of-office-hours instant message, but perhaps that system is also turned on during the day to stop too many auto-approved applications. If the "new customer quota" is exceeded by 3pm for example, then maybe the system rejects any further applications as a "business risk". For those that get referred, they can (at a later date) check the most likely profitable applications and accept them.

For me the credit game is very similar to the bookies (making money from taking risks). Sometimes the bookies offer great free bets and promising odds, yet a few days later they offer nothing. They have risk managers that monitor every hour the total "Book" and maybe once that book is filled up they close shop. For example, I don't think Halifax would say at the beginning of the year "Ok so as long as a new customer can meet criteria A + B + C = Accept" because potentially they could have 5 Million new approved customers in as many weeks say after featuring on the MSE Homepage or newsletter. The CC company has to sustain growth sensibly in these tough economic times, ensuring they have enough staff and more importantly, enough available funds for all these newly issues cards.

Just like the bookies, there are busy times of the year and not so busy times. Events such as the Grand National make the bookies large profits and so often the best free bets are offered. I imagine before and after Christmas is a busy time for the CC companies. Perhaps this is when an application number filter system kicks in more so? Yet just like the bookies, the CC companies have quarterly growth targets and so open and close the gates (change criteria depending on risk/profits targets) at different times of the day, month etc.

I know some people take being declined as personal, and blame themselves or wonder what has gone wrong overnight to their squeaky clean credit file. I think that maybe "Sold Out Today" could be another answer to the mysterious world of credit applications.

Just my thought on the matter anyway, would be interested to see what you all think?

lisyloo

No, sorry I don't buy it.
People with perfect credit scores get declined because

1) They aren't as perfect as they think
2) The company does not want perfect people and wants debtors
3) They simply don't fit the target profile
4) It's the credit crunch stupid - have you been under a rock for the past 2 years?

tescomilk

lisyloo wrote: »

No, sorry I don't buy it.
People with perfect credit scores get declined because

1) They aren't as perfect as they think
2) The company does not want perfect people and wants debtors
3) They simply don't fit the target profile
4) It's the credit crunch stupid - have you been under a rock for the past 2 years?

:mad: Erm calling people Stupid is not very nice from lisyloo a 5 star Member - maybe its been a while since your read the forum etiquette from Martin it clearly states "Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps."

You can read the Forum Etiquette in the Purple Side Box Here

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Anway this thread was just my opinion, sorry to have ruffled your feathers Lisyloo :rotfl:

oldagetraveller

So it looks like there are three others who think that calling someone "stupid" is acceptable. Nice people!?

INT1

Wrong, It's nothing about too many new customers. In fact card companies are set objectives to get a certain % of new customers on their books.

It's simply because the application scoring processes have been tightened up.

Dabooka

tescomilk wrote: »

:mad: Erm calling people Stupid is not very nice from lisyloo a 5 star Member - maybe its been a while since your read the forum etiquette from Martin it clearly states "Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps."

You can read the Forum Etiquette in the Purple Side Box Here

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Anway this thread was just my opinion, sorry to have ruffled your feathers Lisyloo :rotfl:

I took that as being aimed at those being rejected credit rather than yourself, but hey if that's how you feel....

Dabooka

oldagetraveller wrote: »

So it looks like there are three others who think that calling someone "stupid" is acceptable. Nice people!?

I also think it was tongue in cheek, rather than derogatory comment

moonrakerz

tescomilk wrote: »

:mad: Erm calling people Stupid is not very nice from lisyloo a 5 star Member - maybe its been a while since your read the forum etiquette from Martin it clearly states "Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps."

Lisyloo appears to have been a member of MSE for some 7 years. When you have been a member for 7 years, you too will have read an awful lot of stupid (sorry, but really can't think of a better word for them) posts - not of course that I am suggesting that you, or your post is stupid. So perhaps her frustration is understandable - you, of course, have never snapped back at someone who has said the wrong thing at the wrong time to you ?

I heard that they don't give credit cards to people who drive lime green Fiats - but I think putting a post on MSE asking if that was true would rightly (perhaps), earn me the epithet of "stupid".

lisyloo

Erm calling people Stupid is not very nice from lisyloo a 5 star Member

Oh for goddness sake, lighten up people.
I wasn't calling anyone individually stupid, it just a "saying" and wasn't aimed at anyone personally.

I'm really sorry if anyone took offense.

I took that as being aimed at those being rejected credit rather than yourself

Absolutely.
That was how it was meant.
Sorry it anyone took it the wrong way in black & white.

There is a credit crunch on.
A massive global credit crises of unprecedented proprtions.
People need to take that into account and adjust their expectations accordingly.
Credit is not a right although some may have been lured into that belief when it was much more freely available.

So stop looking for detailed reasons - there's a massive credit crunch on and you first need to ask if that's the reason.

moonrakerz

Lisyloo - perhaps you should have referenced this astute piece of financial advice - shouldn't have caused any offence - surely ?

tescomilk wrote: »

Its likely the "current economic climate" is causing you difficulties. Banks still are not lending like they used

opinions4u

A daily credit card acceptance limit would be madness.

Think about it.

Monday: 100 applications, 70 good and 30 bad, only 50 (max) accepted.
Tuesday: 100 applications, 30 good and 70 bad, 30 accepted.

Over the two days you accept 80 applications, but decline 20 good cases.

Good cases declined could be "Top Quality", "Good Quality", "Adequate Policy".

Some of those 20 good cases that you declined on Monday could be better quality applicants than the 30 accepted cases on Tuesday.

So by having a daily limit on acceptance you actually attract a higher risk profile and fewer quality customers. This reduces income and increases write-off potential.