Barclaycard - Failing Eligibility Check

GarretC

Hi all
I wanted to avail of the Avios offer on the Barclaycard Plus card. I bank with Barclays as a Premier Banking customer, and have an excellent credit score on ClearScore, and Experian. I currently have one credit card which is paid off in full every month - never missed a payment. Took out a mortgage 18 months ago. My wife and I earn similar amounts - however she was accepted and I was rejected.
Could there be something obvious I'm missing that is automatically failing me?

CliveOfIndia

It's always difficult to know why you are not accepted - there are dozens of factors that are taken into account.  All you can really do is check all 3 of your credit reports and make sure there's nothing obviously untoward on there.  It may just be something as innocuous as a thin credit history.  Presumably your address is recorded correctly, you're on the ER at that address, no defaults/late payments/any other nasties?  Do you have any other debt (car loans, stuff like that?).  Is the mortgage a joint mortgage with your wife?

Ignore your credit score - as you've discovered, it has no bearing whatsoever on how a lender will view you.

MattMattMattUK

GarretC said:

Hi all
I wanted to avail of the Avios offer on the Barclaycard Plus card. I bank with Barclays as a Premier Banking customer, and have an excellent credit score on ClearScore, and Experian. I currently have one credit card which is paid off in full every month - never missed a payment. Took out a mortgage 18 months ago. My wife and I earn similar amounts - however she was accepted and I was rejected.
Could there be something obvious I'm missing that is automatically failing me?

There could be lots of things, affordability, debts, something on your credit report, the fact that with your income and available credit they think you represent a risk, that they do not currently wish to lend to you, that they do not want to currently lend to people in your position etc. 

Lending is a commercial decision and unless there is something obvious you will likely never know whey they do not want your custom. 

WillPS

Since you have Barclays Premier why don't you try phoning up and asking a Premier Banking representative if they have any levers they can pull for you. It could be their system didn't match you to your existing profile and didn't see you were Premier as a result.

Paying your card off in full each month might not make you quite as attractive as you might think, since this will mean most cards will struggle to make money from you. That said, in this case there is a £20 monthly fee which should mean the bank makes money from you unless you spend extremely high amounts (and clear in full).

Edit - one other thing, do you hold or have you held a Barclaycard in the last 6 months? This would be an instant rejection if so as you can only apply for a new Barclaycard if you haven't held one for at least 6 months.

CliveOfIndia

WillPS said:

Paying your card off in full each month might not make you quite as attractive as you might think, since this will mean most cards will struggle to make money from you.

I sincerely hope you're not implying that people deliberately carry a balance on an interest-bearing card, purely to make themselves "more attractive" to lenders.  If so, that is very bad advice, and is in direct contradiction to everything MSE stands for.

MrFrugalFever

CliveOfIndia said:

WillPS said:

Paying your card off in full each month might not make you quite as attractive as you might think, since this will mean most cards will struggle to make money from you.

I sincerely hope you're not implying that people deliberately carry a balance on an interest-bearing card, purely to make themselves "more attractive" to lenders.  If so, that is very bad advice, and is in direct contradiction to everything MSE stands for.

Indeed and the CC companies make plenty from each transaction made without the added bonus of monthly interest on unpaid balances.

WillPS

CliveOfIndia said:

WillPS said:

Paying your card off in full each month might not make you quite as attractive as you might think, since this will mean most cards will struggle to make money from you.

I sincerely hope you're not implying that people deliberately carry a balance on an interest-bearing card, purely to make themselves "more attractive" to lenders.  If so, that is very bad advice, and is in direct contradiction to everything MSE stands for.

Not at all, I don't pay interest on any of my credit cards. On the other hand, I don't expect that clearing my balance every months makes me objectively an attractive customer.

MrFrugalFever said:

CliveOfIndia said:

WillPS said:

Paying your card off in full each month might not make you quite as attractive as you might think, since this will mean most cards will struggle to make money from you.

I sincerely hope you're not implying that people deliberately carry a balance on an interest-bearing card, purely to make themselves "more attractive" to lenders.  If so, that is very bad advice, and is in direct contradiction to everything MSE stands for.

Indeed and the CC companies make plenty from each transaction made without the added bonus of monthly interest on unpaid balances.

Visa and Mastercard issuers do not make "plenty" from each transaction made. They earn a commission from Visa/Mastercard, derived from the interchange revenue which they receive. For UK issued credit cards used in the UK, this interchange fee is capped at 0.3%.

From that, the issuer has to issue a card at least once every few years, provide some sort of customer service and backoffice and also process the payments to clear the card. Just zeroing in on that last one, most (but not all) issuers allow settlement by debit card, which of course they would need to pay their acquiring bank fees on... this alone would likely wipe out any revenue from the interchange comission since the interchange fees on these will be at least 0.2%!

CliveOfIndia

WillPS said:

CliveOfIndia said:

WillPS said:

Paying your card off in full each month might not make you quite as attractive as you might think, since this will mean most cards will struggle to make money from you.

I sincerely hope you're not implying that people deliberately carry a balance on an interest-bearing card, purely to make themselves "more attractive" to lenders.  If so, that is very bad advice, and is in direct contradiction to everything MSE stands for.

Not at all, I don't pay interest on any of my credit cards. On the other hand, I don't expect that clearing my balance every months makes me objectively an attractive customer.

MrFrugalFever said:

CliveOfIndia said:

WillPS said:

Paying your card off in full each month might not make you quite as attractive as you might think, since this will mean most cards will struggle to make money from you.

I sincerely hope you're not implying that people deliberately carry a balance on an interest-bearing card, purely to make themselves "more attractive" to lenders.  If so, that is very bad advice, and is in direct contradiction to everything MSE stands for.

Indeed and the CC companies make plenty from each transaction made without the added bonus of monthly interest on unpaid balances.

Visa and Mastercard issuers do not make "plenty" from each transaction made. They earn a commission from Visa/Mastercard, derived from the interchange revenue which they receive. For UK issued credit cards used in the UK, this interchange fee is capped at 0.3%.

From that, the issuer has to issue a card at least once every few years, provide some sort of customer service and backoffice and also process the payments to clear the card. Just zeroing in on that last one, most (but not all) issuers allow settlement by debit card, which of course they would need to pay their acquiring bank fees on... this alone would likely wipe out any revenue from the interchange comission since the interchange fees on these will be at least 0.2%!

At the risk of repeating what has been said in previous threads.....

I agree with you that the card issuers make a tiny percentage on each transaction.  Credit card spending for UK customers is something in the order of £20 billion per month.  So that small percentage adds up, even allowing for the fact that the spend is obviously spread across a number of issuers.

The percentage of cardholders who carry a balance compared to those who clear in full is roughly a 50/50 split.  If card issuers were indeed making a loss on those who always pay in full, one would expect to see those cardholders having their accounts closed - this is clearly not happening on a widespread scale.

I'm not disputing the fact that customers who pay interest provide an extra revenue stream for the issuers.  But at the same time, those who pay no interest but use their cards regularly also provide a steady and profitable income.  Arguably not as much income as those who pay interest, but enough to still make it worthwhile and profitable for the issuer.

WillPS

CliveOfIndia said:

WillPS said:

CliveOfIndia said:

WillPS said:

Paying your card off in full each month might not make you quite as attractive as you might think, since this will mean most cards will struggle to make money from you.

I sincerely hope you're not implying that people deliberately carry a balance on an interest-bearing card, purely to make themselves "more attractive" to lenders.  If so, that is very bad advice, and is in direct contradiction to everything MSE stands for.

Not at all, I don't pay interest on any of my credit cards. On the other hand, I don't expect that clearing my balance every months makes me objectively an attractive customer.

MrFrugalFever said:

CliveOfIndia said:

WillPS said:

Paying your card off in full each month might not make you quite as attractive as you might think, since this will mean most cards will struggle to make money from you.

I sincerely hope you're not implying that people deliberately carry a balance on an interest-bearing card, purely to make themselves "more attractive" to lenders.  If so, that is very bad advice, and is in direct contradiction to everything MSE stands for.

Indeed and the CC companies make plenty from each transaction made without the added bonus of monthly interest on unpaid balances.

Visa and Mastercard issuers do not make "plenty" from each transaction made. They earn a commission from Visa/Mastercard, derived from the interchange revenue which they receive. For UK issued credit cards used in the UK, this interchange fee is capped at 0.3%.

From that, the issuer has to issue a card at least once every few years, provide some sort of customer service and backoffice and also process the payments to clear the card. Just zeroing in on that last one, most (but not all) issuers allow settlement by debit card, which of course they would need to pay their acquiring bank fees on... this alone would likely wipe out any revenue from the interchange comission since the interchange fees on these will be at least 0.2%!

At the risk of repeating what has been said in previous threads.....

I agree with you that the card issuers make a tiny percentage on each transaction.  Credit card spending for UK customers is something in the order of £20 billion per month.  So that small percentage adds up, even allowing for the fact that the spend is obviously spread across a number of issuers.

The percentage of cardholders who carry a balance compared to those who clear in full is roughly a 50/50 split.  If card issuers were indeed making a loss on those who always pay in full, one would expect to see those cardholders having their accounts closed - this is clearly not happening on a widespread scale.

I'm not disputing the fact that customers who pay interest provide an extra revenue stream for the issuers.  But at the same time, those who pay no interest but use their cards regularly also provide a steady and profitable income.  Arguably not as much income as those who pay interest, but enough to still make it worthwhile and profitable for the issuer.

Easy numbers, presuming UK issued cards used in UK.

When a merchant processes a credit card, they pay fees to their acquiring bank. The fees will include exactly 0.3% worth of interchange, but will of course be much higher than that so that their acquiring bank earns a profit after all their expenses too.

The exact same is true for merchants processing a debit card, except this time the interchange fee will be exactly 0.2%.

Now imagine you are a UK credit card issuer, let's call it Imagine Bank. Lets ignore all the costs of administering, issuing, running backoffice etc - we've outsourced to that to some sucker who is doing that for free. Let's also pretend that Imagine Bank has got a sweet deal with Mastercard where they have for some reason agreed to give Imagine Bank their entire interchange revenue. Imagine Bank therefore knows that every time your card is used in the UK they'll be earning 0.3%! Woohoo, these are the good times right?

OK, now Imagine Bank generates a statement with all that spending. Let's say again, the process of doing this cost zero. Total transaction revenue is 0.3% of the bill - £1000 bill, Imagine Bank have earned £3! But hold the corks guys... the customer wants to pay with their debit card.

What is *the minimum* it would cost for Imagine Bank to run a charge against a UK debit card for that £1000? Remember that even though the Interchange Fee cap on debit cards is 0.2%, Imagine Bank's acquiring bank will also be expecting something. How does that sweet £3 profit look now?

CliveOfIndia

So how come Imagine Bank retains the approximately 50% of its card customers who never pay interest or fees?  People like myself.  They're making a loss out of me every month, and are getting nothing at all back.  In fact, they're making an even bigger loss because I get cashback and various other rewards on all my spending.  I must be costing them a fortune.  Yet all they ever do is offer to increase my credit limit every so often.

I think the CFO at Imagine Bank must be a sandwich short of a picnic if he wants to keep me as a customer - it makes no financial or commercial sense whatsoever to have me costing them money every month.

IanManc

WillPS said:

Easy numbers, presuming UK issued cards used in UK.

When a merchant processes a credit card, they pay fees to their acquiring bank. The fees will include exactly 0.3% worth of interchange, but will of course be much higher than that so that their acquiring bank earns a profit after all their expenses too.

The exact same is true for merchants processing a debit card, except this time the interchange fee will be exactly 0.2%.

Now imagine you are a UK credit card issuer, let's call it Imagine Bank. Lets ignore all the costs of administering, issuing, running backoffice etc - we've outsourced to that to some sucker who is doing that for free. Let's also pretend that Imagine Bank has got a sweet deal with Mastercard where they have for some reason agreed to give Imagine Bank their entire interchange revenue. Imagine Bank therefore knows that every time your card is used in the UK they'll be earning 0.3%! Woohoo, these are the good times right?

OK, now Imagine Bank generates a statement with all that spending. Let's say again, the process of doing this cost zero. Total transaction revenue is 0.3% of the bill - £1000 bill, Imagine Bank have earned £3! But hold the corks guys... the customer wants to pay with their debit card.

What is *the minimum* it would cost for Imagine Bank to run a charge against a UK debit card for that £1000? Remember that even though the Interchange Fee cap on debit cards is 0.2%, Imagine Bank's acquiring bank will also be expecting something. How does that sweet £3 profit look now?

I know that you love this topic, but to save you having to go down this rabbit hole ever again, the following article explains everything:

https://startups.co.uk/payment-processing/credit-card-processing-fees/#:~:text=The average credit card processing,fees, such as authorisation fees.