Messed up making multiple applications

Half_Price_Sky

I've a debt of £2,700 on a Santander purchase card which the introductory 0% APR rate runs out two weeks today. The plan was to switch current accounts to Natwest so I could take advantage of their balance transfer credit card along with pocketing a nifty £150 for switching banks.

Unfortunately, after the switch earlier this month, I was declined for the credit card by Natwest. I applied to MBNA on Friday and was offered 16 months 0% APR at 3.49% transfer fee with a credit limit of £2,100. I chose not to take it (hindsight's wonderful isn't it)?

Sunday I was refused by Barclaycard and last night my long standing current account provider The Co-operative also refused me. However, afterwards, I was accepted by MBNA's sister bank Halifax.

These rejections have come somewhat as a surprise. Especially considering the MSE Eligibility Checker had me down as a 90% chance for Barclaycard. I've never been in debt before. The Santander card has been my first and only credit card bar an Argos store card I took out a year ago for a couple of small purchases which I paid off the same month and haven't used since. I've noticed my Clearscore rating has gone down from a steady 500~ to just 369 over recent months.

As a result Halifax have only agreed to lend me £1,600 for 16 months. Leaving me with £1,200 outstanding which will need shifting soon. Natwest have given me a £1,500 agreed overdraught on the current account and I had contemplated sticking it on that, but the interest rates of 18.9% APR and 19.89% EAR, between the credit card and the bank overdraught, seem very similar. Sorry I don't really understand the difference between APR and EAR. Would be much appreciated if someone with better knowledge could offer some clarity.

I had been contemplating applying for an additional card with another lender to pay off the remaining debt. The MSE Eligibility Checker has me down as 50% chance for M&S and Sainsburys with the lesser end 0% APR cards such as Capital One and Fluid coming in at 100% and 95% chance respectively.

I was thinking about applying for one of the above until ringing Halifax this evening when the call centre agent told me there's a chance they could increase my credit limit if I call them in the next few days once the card has come.

I realise I've shot myself in the foot by making so many applications in a short space of time and maybe opening a new current account immediately before needing to shift credit card debt wasn't the best of ideas but it is what it is and I need to decide upon the best tactic for shifting and paying off the remaining £1K.

boo_star

You didn't help matters by applying for 4 cards in quick succession.

When your Santander card loses its 0% offer will the interest rate be much worse than Natwest's 18.9% on an overdraft?

If it is, use the overdraft. If it isn't leave it on the card.

Half_Price_Sky

boo_star wrote: »

You didn't help matters by applying for 4 cards in quick succession.

When your Santander card loses its 0% offer will the interest rate be much worse than Natwest's 18.9% on an overdraft?

If it is, use the overdraft. If it isn't leave it on the card.

The Santander card interest is 18.9% APR. The Natwest current account overdraft interest is 19.89% EAR (+ £6 monthly fee).

The two interest rates in percentage terms (ie. 18.9% vs 19.89%) are quite similar looking to the untrained eye but I don't know which charges the most between APR and EAR. I mean what's the difference?

boo_star

Half_Price_Sky wrote: »

The Santander card interest is 18.9% APR. The Natwest current account overdraft interest is 19.89% EAR (+ £6 monthly fee).

The two interest rates in percentage terms (ie. 18.9% vs 19.89%) are quite similar looking to the untrained eye but I don't know which charges the most between APR and EAR. I mean what's the difference?

Keep it on the card.

Your monthly interest payment will go down as you pay it off.

Your overdraft will always charge you £6 a month, even if you're just £1 into an arranged overdraft, AND the interest rate of 19.89%.

Yikes.

Ben8282

I am wondering about the rejections. When you made the credit card applications, what did you enter for the details of your bank account. If for example you gave details of the Natwest account and answered the question time with bank as 1 month that well may have caused the rejections. Similarly if you gave details of the presumably closed switched account that could have caused a problem.
You say the Santander card is your first and only credit card and the balance is £2,700. What is the credit limit? If you are using the card at near to 100% that would not have helped.
Another problem could well have been the fact that the Santander card was your first ever credit card. Now that the 0% period has ended, instead of repaying you want to transfer the balance. Therefore you have never previously paid off a balance. I think that there is a strong possibility that lenders would; like to see your first ever credit card balance repaid before they take you on.
The multiple applications may or may not have been a factor. It would depend which CRA's were searched and how quickly the hard searches were shown.
Transfer as much of the balance to your Halifax card as possible. Leave the rest on the Santander card and pay interest. Try to repay as soon as possible. Do NOT use the overdraft on your new Natwest account. This cannot be over emphisised. DO NOT start your banking relationship with Natwest by living in your overdraft. This will NOT help with them and certainly will not help you in making further credit card applications.
Do NOT make any further credit card applications at this time..
I am assuming the Natwest card you applied for was the new 23 month no fee 0% balance transfer card. This is a very good offer and the demand is probably quite high which would in turn allow Natwest to be very choosy about who they accept. Also consider this possibility. Natwest have just given you £150 for the switch. Perhaps they thought that giving you £2,700 interest and BT fee free for 23 months as well was too much. You were fast becoming an unprofitable customer.

boo_star

Ben8282 wrote: »

It would depend which CRA's were searched and how quickly the hard searches were shown.

Searches are shown immediately.

Ben8282

boo_star wrote: »

Searches are shown immediately.

Thank you. Then it would have been a factor.

Half_Price_Sky

Ben8282 wrote: »

I am wondering about the rejections. When you made the credit card applications, what did you enter for the details of your bank account. If for example you gave details of the Natwest account and answered the question time with bank as 1 month that well may have caused the rejections. Similarly if you gave details of the presumably closed switched account that could have caused a problem.
You say the Santander card is your first and only credit card and the balance is £2,700. What is the credit limit? If you are using the card at near to 100% that would not have helped.
Another problem could well have been the fact that the Santander card was your first ever credit card. Now that the 0% period has ended, instead of repaying you want to transfer the balance. Therefore you have never previously paid off a balance. I think that there is a strong possibility that lenders would; like to see your first ever credit card balance repaid before they take you on.
The multiple applications may or may not have been a factor. It would depend which CRA's were searched and how quickly the hard searches were shown.
Transfer as much of the balance to your Halifax card as possible. Leave the rest on the Santander card and pay interest. Try to repay as soon as possible. Do NOT use the overdraft on your new Natwest account. This cannot be over emphisised. DO NOT start your banking relationship with Natwest by living in your overdraft. This will NOT help with them and certainly will not help you in making further credit card applications.
Do NOT make any further credit card applications at this time..
I am assuming the Natwest card you applied for was the new 23 month no fee 0% balance transfer card. This is a very good offer and the demand is probably quite high which would in turn allow Natwest to be very choosy about who they accept. Also consider this possibility. Natwest have just given you £150 for the switch. Perhaps they thought that giving you £2,700 interest and BT fee free for 23 months as well was too much. You were fast becoming an unprofitable customer.

I entered the details of my Co-op current account on all applications, which I've held for 18 or so years.

My Santander card has a credit limit of £3,100, so yes I had been running that pretty near to the limit. I did have it relatively low until not too long ago when I had some unforeseen circumstances where I needed to use it a bit more than usual. I've paid my regular £100 DD onto the card on the 1st of this month, coupled by an in branch payment of £190 last Friday. My Clearscore still has the old balance (pre the £190 payment) showing.

Yes it was Natwest's new 23 month 0% APR card I'd applied for.

If Halifax don't decide to increase my limit how long is reasonable to wait before applying for another card? As mentioned I'm still 100% pre approved for Capital One, who are offering six month 0% along with the 95% chance for Fluid (who offer nine months 0%), Marbles et al. Any of those would be sufficient for my needs assuming they'd give me a credit limit somewhere approaching £1k. However Fluid's site says their credit limits begin at just £300 and I've already seen posts from other forum members who have in the region of £500 limits with them.

Ben8282

Although I wish you luck, the chance of Halifax increasing your credit limit when you get the card is pretty slim. I think the person just said that to get you off the phone. Don't count on this happening.
Why are you so desperate to get more cards, even sub prime cards? After the balance transfer is made you will, as you say, have £1,200 still on the Santander card. Paying interest on a £1,200 balance is not the end of the world. It won't be a fortune on a normal APR mainstream card.

Half_Price_Sky

Ben8282 wrote: »

Although I wish you luck, the chance of Halifax increasing your credit limit when you get the card is pretty slim. I think the person just said that to get you off the phone. Don't count on this happening.
Why are you so desperate to get more cards, even sub prime cards? After the balance transfer is made you will, as you say, have £1,200 still on the Santander card. Paying interest on a £1,200 balance is not the end of the world. It won't be a fortune on a normal APR mainstream card.

I wondered whether that was the case and he was just telling me what I wanted to hear. No wonder he told me to wait until after the card came. Perfect excuse to get me off the phone. They were the same in branch at Santander last Friday when I asked if it were possible to extend the promotional period "If you give our credit card line a call they might be able to do something for you." They probably knew full well they wouldn't. Which of course they didn't.

Tbh I've never been in this situation before. I've always resisted credit cards and taken loans from credit unions for large purchases previously to avoid this kind of scenario and now that it's happened frankly it's scared me a bit. Lesson to be learnt I guess. That's the reason I've been wanting to seek a second card.

Just wondering why you'd advise against applying to another lender? Would applying to one of the sub prime lenders put a major black mark on my file or something?

born_again

Surprised no one mentioned this before.
Forget about the Clearscore rating. It means nothing to lenders. They look at their own lending criteria.

As someone else said. DO NOT pay the CC balance with you overdraft. It will have your new bank watching your account and might look to reduce that overdraft as soon as they get chance.
Far better to prioritise paying the outstanding balance at Santander.
Do not forget to factor in the balance transfer fee and usually the 95% of your new credit card limit.

I would concentrate on clearing the debt you have now before applying for any more cards.

Like your credit score, take the MSE Eligibility Checker with a dose of salt. All they are looking for is the kickback they get if you follow it through and apply.
Better to go direct to the card provider.