What are the repercussions of a credit card refusal?

scampsall

Hi all,

I'm considering applying for a 12 months interest free credit card to fund one purchase - a new laptop for around 500 quid.

I've had three previous credit cards (HSBC/Capital One/Egg) which I've managed properly, made all payments, cleared and closed. I've met all utility bills and direct debits etc so I'm pretty confident I have a good and spotless credit rating. The problem is that I'm currently unemployed... don't tut just yet!

I need the laptop as mine has just died and I'm developing a business as a self-employed web developer - so it's kindof essential. The credit card is just to space payments, which will be met by my wife's income - so the purchase is essential and there is a plan for payment, promise!

My concern is of course that I'll be declined a card due to not having any guaranteed income so my question is: how likely is this? and what are the repurcussions of being refused?

Thanks in advance!

ironlady2022

The terms and conditions state you need to be in employment, it's difficult if you are starting out self employed as your income fluctuates. If you are getting income in you need to put this in your current account so the bank can see it going through their system. My advice would be for your wife to apply as she is funding it anyway and you can go on as a secondary cardholder.

izools

There are several cards which allow you to enter Household income - the Sygma Bank credit cards allow you to enter the income of both yourself and others in your household as a total - so they won't know (or care) if the income is yours or your wife's.

This card may be ideal:

https://www.your-application.co.uk/NetFinanceCertegymicrosite/silvermastercard/PaymentProtection.aspx

They are reasonably lax with their credit scoring, and have been known to accept applications from those who have issues with their credit file. As you have none, and can enter your wife's income, I think you stand a strong chance of approval.

If not, there are several sub prime cards to consider:

http://www.capitalone.co.uk/creditcards/progress-credit-card.jsf
http://www.aquacard.co.uk/
http://www.vanquis.co.uk/

These are, however, high interest cards which whilst very easy to be approved for, will cost more in interest than mainstream cards.

I think the Silver card is the easiest mainstream card to be approved for, so give that a shot first and if you get knocked back try for the Progress card from Capital One.

If you are knocked back for both, I suggest stopping applying and consider holding off until you have a personal income to quote on your application as more than two searches on your credit file in a six month period can start to make your credit score worse - as it appears to other creditors that you are desperate for credit.

Good luck! And let us know how you get on :beer:

littlewren

I am a housewife, not working outside the home, and have been able to apply for - and receive - several credit cards over the years with no problem. HTH

chattychappy

Since your wife is paying anyway, could she apply for the card? Ideally go for a Tesco card or some other card that has an interest free on purchases deal.

Putting it through her card wouldn't affect your ability to offset it against profits for tax purposes.

izools

True, the Tesco interest free offer of 1+ year on purchases is better than the Silver card's paltry 3 months free on purchases. Indeed another option to consider

I think OP would do well to have an active credit card anyway, as having none can cause problems with applications for high street cards even if full time well paid employment :beer:

scampsall

Thanks for the responses

Meant to say in my first post that the other option would be for my wife to go for the card - my only concern was that she doesn't have much of a credit history beyond a mobile phone direct debit, so, this may be an opportunity for her to build one.

It's interesting to know the possible downsides of getting refused though. Thanks for the advice, will go back to mulling this over!

chattychappy

No serious repercussions. Searches are recorded, but not their results. Too many searches are considered a bad thing - but two or three within a 6 month period should be OK. Of course the CC you applied to will retain your application details for a while - so probably not worth applying to them again for a while (I'd say wait at least 6 months).