Turned down for a credit card

BugsyBrowne

adindas wrote: »

I do not think so. This are my observations:
- There are already a lot of cases reported in this forum regarding this practice. are they all bad.
- If my memory serve well, Martin's clearly state this in their guide regarding that one of the reason they do decline application is that People are not making them enough money.
- Their business is to generate profit. If they know that you can not make money from you, why should they approve your application ? As you say and many people know, they reserve the right accept or to reject application for the people they like. They do not need to explain their reason apart from generic statement "do not meet their criteria ". Which criteria they will never tell you ...
- I could say because I have my own experience.

Indeed they get from vendor but how many percent ??. Is it enough to cover one month of free interest grace period when people pay in full in the next statement month ??

Of course you will never be able to prove that as they will never tell you which criteria you have not met.

No bank is too naive to mention that "possibly of not making profit from applicant" as one of their criteria for decline an application. But is the guide from people such as Martin which highlight this possibility and testament from people in this forum are not enough ?? Are they all bad ??

Oh forgot we should take everything Martin Lewis says as gospel especially when he told people to go out and order credit scores from the CRA's as these will tell you if your good for credit yeah right.


There are some very knowledgable members on this site regarding Credit applications and how they work etc who I would prefer to get my advice off.

Cheers.

Macca83_2

Im gonna wave my hand and say again. They probably have a wait period between the closure of one card and the application of a New one.

I also don't subscribe to this nonsense re generated income. They may not make money on the interest but they sure as hell make money on each and every transaction. Plus, they have the opportunity to market further products to the customer.

Lending criteria doesn't just apply to the customer, it applies to the bank as well. They manage their own risk in the number of applications they approve.

CLAPTON

adindas wrote: »

I do not think so. This are my observations:
- There are already a lot of cases reported in this forum regarding this practice. are they all bad.
- If my memory serve well, Martin's clearly state this in their guide regarding that one of the reason they do decline application is that People are not making them enough money.
- Their business is to generate profit. If they know that you can not make money from you, why should they approve your application ? As you say and many people know, they reserve the right accept or to reject application for the people they like. They do not need to explain their reason apart from generic statement "do not meet their criteria ". Which criteria they will never tell you ...
- I could say because I have my own experience.

Indeed they get from vendor but how many percent ??. Is it enough to cover one month of free interest grace period when people pay in full in the next statement month ??

Of course you will never be able to prove that as they will never tell you which criteria you have not met.

No bank is too naive to mention that "possibly of not making profit from applicant" as one of their criteria for decline an application. But is the guide from people such as Martin which highlight this possibility and testament from people in this forum are not enough ?? Are they all bad ??

lets do the maths

take two people with a CC with a 1,000 limit and an APR of 25%

A ...person A

spends 1000 every month but pays in full
CC company makes probably 2% on every spend so in a year makes 12,000 x 2% i.e. £240 from retailers

also a person that days in full every month is very very unlikely to default

B. person B

maxes out his card in the first month and then only pays the min say 2.5% i.e. £25

so in a year he can only spend intial 1000 plus 11 x 25 so total of 1,275 so CC earns at 2% = £25.50 from retailers
plus interst on 1000 x 25% = 250

so total income £275.50

now an idiot that only ever pays the minimum is obviously a high risk customer



so the income form the two customers is quite similar but the risk of defaulting is huge

jakesuk

adindas wrote: »

Here you are comparing about £12,000 vs £1,275 amount of credit per annum.

Keep in mind this is the lender money and money is a scarce resource. For the bank it will mean missing opportunity cost. They would have better off by lending the money as a loan with opportunity to harvest multiple interest rate.

How is it comparing £12,000 vs £1,275!!! :rotfl: The credit limit is £1,000 for both and the lender never lends more money to person A or person B. Person A is paying in full every month!

Sorry to disagree with you on this one Adindas but you're argument is not thought out.

The fact is that no-one knows exactly why the OP was turned down but IMO I don't think it was because they thought they wouldn't make money.