Credit Card for someone with a lot of debt

Car2oon

I need a credit card purely because a couple of times a year I have to rent a car and doing that without a credit card is a nightmare. I have no intention of ever using the credit card.

I've followed all the advice on here, done the likelihood calculator, got my equifax report etc. and still got refused for the first card I applied for. My credit report is excellent and all in green. I have no late payments or anything. I suspect the main issue is just that I took out a substantial loan two years ago and I have a large overdraft. Both of these are getting paid back and reduced every month as my current financial situation is very rosy but it still looks bad having that much debt I suspect.

So advice? Before I jump into applying for a card again who do we think is most likely to ignore all my debt?

SeanG79

Try your own bank possibly? Alternatively Barclaycard have a "soft search" option which will indicate the probability that they will approve the credit card before performing a full credit search.

eskbanker

Car2oon wrote: »

I suspect the main issue is just that I took out a substantial loan two years ago and I have a large overdraft. Both of these are getting paid back and reduced every month as my current financial situation is very rosy but it still looks bad having that much debt I suspect.

You're presumably basing your rosy view on the fact that you're making inroads into your debt, but it's likely that potential lenders will still just be looking at the size of the debt, especially relative to your income, what sort of ratio of borrowings to income do you have? Did the company refusing you give any indication of why?

Thrugelmir

Car2oon wrote: »

as my current financial situation is very rosy

With a high level of debt not least an overdraft then lenders will take a less than rosy view of your financial circumstances. Advancing you further credit facilities not being on their list.

Car2oon

My own bank has said no. The really frustrating thing is I don't want a sodding credit card. I live in a city and get on fine without a car but my family live in a very remote rural area and a few times a year I want to rent a car to go visit them. Renting a car without a credit card limits you to one company who are a right pain in the backside.

I suppose I shall just have to stick with it for the next few years until the loan is paid off.

Car2oon

eskbanker wrote: »

You're presumably basing your rosy view on the fact that you're making inroads into your debt, but it's likely that potential lenders will still just be looking at the size of the debt, especially relative to your income, what sort of ratio of borrowings to income do you have? Did the company refusing you give any indication of why?

In terms of monthly income vs monthly payback or annual income vs overall debt?

The loan was taken out two years ago and scheduled to be repaid over five years. I have not missed a single payment and am very capable of making the monthly payments.
My overdraft is on a reduction plan where it reduces by a percentage every month, again I've stayed well within that and it's not a problem with my monthly income as arranged.

However if one were to look at it annually my overall debt is around 25% of my annual income.

lindens

will one of those prepaid cards work here?

eskbanker

Owing 25% of your annual income shouldn't be a problem, the rule of thumb of 50% is often referred to on here. Going back to the eligibility checker, even if it rated your chances of your chosen card as 90% that obviously means that some won't get it (assuming accurate probabilities!), so it may be worth trying at least one more - if you're hardly planning to use it then it doesn't really matter if it's some hideous APR card if you're not going to build up any debt on it....

blunther

I have a pre-paid MasterCard (FairFX) and used it when renting a car abroad (negates the risk of them adding loads of spurious charges on later). They didn't seem to notice it wasn't actually a credit card. Might be worth a go?