'Excellent' credit rating, 10 plus years with bank but credit card refused

agnomen

I have been with the Co-op for 40+ years and have had a premium account (with £300 o\d) for at least ten. Apart from a tight patch 15 years ago during redundancy/ illness, I have had no problems in that time.

I have two credit cards (Aqua & Sainsburys), each with around £7k limit which is way more than I need. I usually clear them within a month or two and pay little interest. If pushed or if I need extra cash, I use a draw down from a small pension pot (now around £20k).
My Experian credit score is currently 999. 
With Sainsbury's now switching to NatWest (not for me) I am thinking of getting another credit card to replace it. I am on housing benefit and just a state pension so my Income /Expenditure hasn't a lot of leeway and I use the cards to help with cashflow. Aqua for day to day expenses, the other to manage internet costs I contribute to a charity.
I applied to the Co-op for a credit card but was refused 'because they didn't think I would be able to manage my expenses'. To me it looks as if they think that because I am on benefits I will be irresponsible and get into debt.
Two questions:
1. Are they being reasonable?
2. Is there an ethical credit card company that might look more favourably on an application (not holding my breathe but...) ?
Any comments, fellow Forumites? 

TadleyBaggie

If your income is just the state pension AND you have £14K of existing available credit, it's not surprising you were rejected. As you have discovered, having a perfect credit score is meaningless, no one else can see it.

lr1277

Completely agree with @TadleyBaggie. It is a case of your total income less your fixed expenses. Then compare that figure to your available credit. If they gave you a further card, that is an even higher available credit which would be harder to pay off if you ran it up to the full amount.

Also if you don't always pay your card balance in full every month hence are attracting interest, the card company will think you can't manage your money. This is a red flag for any card company.

I am not suggesting the following will work but if you cancel one of your cards and close the account, then wait a few months for your credit file to be updated, it is possible you may get another card. At this point you could try again with the Co-op. Like I said, no promises. And if this application failed, you would be down to 1 card.

Edited to add: If you are trying for another card it will also be helpful if you pay off your card balance in full every month preferably by direct debit. You need to do this for a few months to get over the red flag of when you last didn't make a full payment.

sammyjammy

Agree with above posters, close the Sainsburys card if you don't want to be with Natwest and reduce the limit on the other card.  If you leave it a few months you may get another card with a lowish limit, if you still need two cards.

born_again

agnomen said:

I have been with the Co-op for 40+ years and have had a premium account (with £300 o\d) for at least ten. Apart from a tight patch 15 years ago during redundancy/ illness, I have had no problems in that time.

I have two credit cards (Aqua & Sainsburys), each with around £7k limit which is way more than I need. I usually clear them within a month or two and pay little interest. If pushed or if I need extra cash, I use a draw down from a small pension pot (now around £20k).
My Experian credit score is currently 999. 
With Sainsbury's now switching to NatWest (not for me) I am thinking of getting another credit card to replace it. I am on housing benefit and just a state pension so my Income /Expenditure hasn't a lot of leeway and I use the cards to help with cashflow. Aqua for day to day expenses, the other to manage internet costs I contribute to a charity.
I applied to the Co-op for a credit card but was refused 'because they didn't think I would be able to manage my expenses'. To me it looks as if they think that because I am on benefits I will be irresponsible and get into debt.
Two questions:
1. Are they being reasonable?
2. Is there an ethical credit card company that might look more favourably on an application (not holding my breathe but...) ?
Any comments, fellow Forumites? 

Question?

If you already have 2 cards with £14K limit which you state is which is way more than I need. I usually clear them within a month or two and pay little interest.

Why are you wanting a 3rd CC?

Coop are protecting themselves from a unaffordable lending claim. As well as being a very responsible lender 👍

enthusiasticsaver

It is probably more to do with low income.  Do you not take a regular withdrawal from your private pension and include that in your income figures? As you say £14k is a high limit for someone on minimal income so maybe close one of the cards down and try again in 6 months. 

I think they are being responsible.  If you are just on state pension that is only around £12k (housing benefit is presumably because you do not own your house and cannot be included in income) so your current credit card limit is already more than your annual income. Agreeing another card with more credit availability does not seem sensible so I think Co op are being reasonable. 

lr1277

Despite what I said above, be careful closing any of your existing cards, irrespective of the reason.

My experience is that when I was working I had 3 cards. I then stopped working due to health issues. So I have a minimal income. I now have 1 card because of closures not initiated by me.

The first card was the old John Lewis card, which was closed for all customers by John Lewis. I could not get the replacement card from Newday because of my income.

My 2nd card was the old Post Office card which became the Jaja card. This was closed for many customers as we weren't paying interest and thus weren't making Jaja any money.

Essentially the cards that were closed were co-branded cards. I think co-branded cards are more likely to be closed than cards offered directly by banks/building societies/other financial institutions.

Which left me with my final card which was the card from my bank. Which is great.

My point is that any card can be closed by the supplier and there is nothing you can do about the closure. So you could get another card, but you would need a sufficient income. As you are on a pension I suppose you can be confident about your income going forward.

When looking at cards check you have the required income. Into google type

[card name/company] minimum income

Google should return the minimum income required for that card.

My other point is that I suspect (but don't know) that Natwest won't close their own brand of card. So that is something to think about.

I don't know if you consider the Nationwide to be an ethical intitution but the minimum income for their card is £5k. Though if you are not aware, some Nationwide customers have a problem with Nationwide's takeover of Virgin money, but I certainly don't know how that is going to play out.

jbryce

sammyjammy said:

Agree with above posters, close the Sainsburys card if you don't want to be with Natwest and reduce the limit on the other card.  If you leave it a few months you may get another card with a lowish limit, if you still need two cards.

Just bear in mind that your card balance should be <= 25% of your limit. If you reduce the limit, you could find yourself breaching that.

Olenna

agnomen said:

I have been with the Co-op for 40+ years and have had a premium account (with £300 o\d) for at least ten. Apart from a tight patch 15 years ago during redundancy/ illness, I have had no problems in that time.

I have two credit cards (Aqua & Sainsburys), each with around £7k limit which is way more than I need. I usually clear them within a month or two and pay little interest. If pushed or if I need extra cash, I use a draw down from a small pension pot (now around £20k).
My Experian credit score is currently 999. 
With Sainsbury's now switching to NatWest (not for me) I am thinking of getting another credit card to replace it. I am on housing benefit and just a state pension so my Income /Expenditure hasn't a lot of leeway and I use the cards to help with cashflow. Aqua for day to day expenses, the other to manage internet costs I contribute to a charity.
I applied to the Co-op for a credit card but was refused 'because they didn't think I would be able to manage my expenses'. To me it looks as if they think that because I am on benefits I will be irresponsible and get into debt.
Two questions:
1. Are they being reasonable?
2. Is there an ethical credit card company that might look more favourably on an application (not holding my breathe but...) ?
Any comments, fellow Forumites? 

1. They simply don't think they'll make any money from you. Given that you're on housing benefit, I'm guessing that you don't have property that they could come after if you don't pay or pop your clogs - which probably doesn't help. 

2. Credit card providers are there to make money not provide credit because you're a decent person. 

I'm struggling to understand what negative that NatWest has over Sainsburys - who are are owned by a Middle Eastern Sovereign wealth fund?!