Credit card rejection, possible appeal with £25k savings?

notsurewhat2doo

My sister has been rejected for a credit card probably due to the fact she is over-committed with debt and about 4 accounts has been opened within the last 6 months (2 mail order, 2 cc's with only £500 limit)

Her total debt level is about £10k which does include an overdraft of £7k, she is 21 years old. She has never missed a payment and everything else on her credit record (ER, payment history and so on) is bang on.

She has been refused a credit card that she would like for continued section 75 protection against purchases.

If she can demonstrate that she has £25,000 savings and has held it for a few months, what weighting would it have on an appeal?

Hope some people can give light to this especially in similar circumstances, thanking you kindly.

Fruit_and_Nut_Case

notsurewhat2doo wrote: »

My sister has been rejected for a credit card probably due to the fact she is over-committed with debt and about 4 accounts has been opened within the last 6 months (2 mail order, 2 cc's with only £500 limit)

Her total debt level is about £10k which does include an overdraft of £7k, she is 21 years old. She has never missed a payment and everything else on her credit record (ER, payment history and so on) is bang on.

She has been refused a credit card that she would like for continued section 75 protection against purchases.

If she can demonstrate that she has £25,000 savings and has held it for a few months, what weighting would it have on an appeal?

Hope some people can give light to this especially in similar circumstances, thanking you kindly.

Why on earth does your sister have £25000 savings gaining a tiny amount of interest while at the same time having debt of £10000 with a (presumably) much higher interest rate. Tell her to use the savings to pay off the debt!

scottishblondie

No - savings don't count for anything. They would probably just ask the same question as Fruit and Nut!

She's had too many credit searches in the last 6 months, and 10k of debt is quite a lot at 21 - how much is her salary? Unless it's over 30k my opinion would be that she has too much already for anyone to take her on.

Why can't she utilise her existing CCs for section 75 protection?

ses6jwg

unless the debt is attracting a lower interest rate than the savings (e.g. pre-2011 student loan, 0% credit cards) then she MUST use the savings to pay off the debt ASAP

izools

notsurewhat2doo wrote: »

She has been refused a credit card that she would like for continued section 75 protection against purchases..

What's wrong with the two she's just taken out...?

She needs to clear her debt with her savings as the debt will be incurring a significantly higher rate of interest than the savings are earning... Unless she knows something we don't - in which case, can you let us in on her secret?

opinions4u

What's to stop you giving her £25k to look after?

Then, after the card is issued she gives it back?

Ah, that's the plan I assume. Almost certainly won't work. An outside chance that it will if the card is being applied for with the savings provider, but highly unlikely.

Zack1

I got a credit card limit raise after appealing and showing savings (much less than 25k), surprised they gave it to me to be honest, especially as I'm a student and included in that figure was obviously student loan & overdraft and the fact I may have got somebody else to send me a few k (I didn't), but they put my limit up, much to my amazement! I have no debt though and perfect payment records.

Wouldn't sending savings to her to 'look after' also be fraud? Deception for personal gain?

I'd be careful in case they look into it. Presumably if the card wasn't within the same banking group as the savings they couldn't actually do anything or find out much, but if the savings are with X and you apply for the card with X then they can see full details regarding the 'savings' and related transactions to/from the account at a later date - possibly closing down the card and trying to take action against the both of you

Bravehearted_2

Zack1 wrote: »

I got a credit card limit raise after appealing and showing savings (much less than 25k), surprised they gave it to me to be honest, especially as I'm a student and included in that figure was obviously student loan & overdraft and the fact I may have got somebody else to send me a few k (I didn't), but they put my limit up, much to my amazement! I have no debt though and perfect payment records.

Wouldn't sending savings to her to 'look after' also be fraud? Deception for personal gain?

I'd be careful in case they look into it. Presumably if the card wasn't within the same banking group as the savings they couldn't actually do anything or find out much, but if the savings are with X and you apply for the card with X then they can see full details regarding the 'savings' and related transactions to/from the account at a later date - possibly closing down the card and trying to take action against the both of you

Totally different set of circumstances. As you say, you had no debt and good payment record.

This OP's plan is to send 25k to her - which wont work.

Anybody with a brain will ask "why hasn't she paid the debt with the 25K?"

Gromitt

Bravehearted wrote: »

Anybody with a brain will ask "why hasn't she paid the debt with the 25K?"

You can't really say "debt" as even though I have a debt which I call my mortgage, not paying it off saves me money as my savings % is more than my mortgage %.

Although I highly doubt an overdraft will be lower than a typical savings account.

If the 25K was used a secured guarantee (ie, couldn't be touched), then I've no doubt a few banks would offer a CC, but since it's unsecured (could be removed at any time), all banks will completely ignore it and just base the decision on past events, past history and credit report.

Fruit_and_Nut_Case

opinions4u wrote: »

What's to stop you giving her £25k to look after?

Then, after the card is issued she gives it back?

Ah, that's the plan I assume. Almost certainly won't work. An outside chance that it will if the card is being applied for with the savings provider, but highly unlikely.

Zack1 wrote: »

Wouldn't sending savings to her to 'look after' also be fraud? Deception for personal gain?

Bravehearted wrote: »

This OP's plan is to send 25k to her - which wont work.

Have I missed something? Where has the OP indicated that this is a potential plan of action? Or I being naïve?

opinions4u

Fruit_and_Nut_Case wrote: »

Have I missed something? Where has the OP indicated that this is a potential plan of action? Or I being naïve?

I did clearly state that I have made an assumption.

But why would somebody with large debts suddenly acquire a lump sum and not clear those expensive debts?

My cynical underwriter's mind tells me that this money won't be funds that really belong to the applicant.