5+ Reasons Credit Card Transaction Not Approved
5+ Reasons Credit Card Transaction Not Approved. Since credit cards make transactions of business and payment of goods and services easy, it is better to have them and to use them. Especially now that it can be used to transact business across the globe and placing of orders. In the payment of fees for tertiary institutions too, the usage of credit cards has become even more needful considering the fact that many institutions now offer a significant amount of their course online. And with time, almost everyone who owns a bank account has a credit or debit card.
The difference between the two is that with debit cards, you must have money in your account to use them. With credit cards, you are given money to use and then given a time period to pay it back in bits and when you fail, you have some form of penalty to pay in the form of interest.
While it is very easy to acquire a debit card, it is not that easy to get a credit card. You will have to apply for it and then your credit score will be assessed and after that, it would be approved or denied.
The question however is why would you be denied a credit card. This write-up seeks to find out why your application would be denied.
Herein are a few reasons, even though this is not an exhaustive list.
5+ Reasons Credit Card Transaction Not Approved
1. A bad credit score
When you have a bad credit score, it is going to be very difficult for you to have your application approved. Credit scores will always be assessed before credit cards are approved. A lot of the companies that issue credit cards will review your application before the card is given to you. Many of them have a standard score you have to get, others might not take it that seriously but most do. This is one thing that they would use to determine if you are able to pay back the money they are going to lend out to you. A good credit score is any score that is equal to or above 750.
Some of the things that can affect your credit score are:
If you have borrowed money from many sources and are still paying
If you have put in an application for credit cards with a lot of companies
You still owe EMIs and you don’t clear your debts early enough
You have taken loans previously and didn’t pay.
Note that if you do not have a track record of taking a loan too, this can affect you as there is no what to judge if you can pay back a loan.
2. Having a low income
One of the things that can affect you and lead to your application not being approved is your income being low. Companies normally want to be sure that you have the ability to repay the loan they are giving to you. One of the ways this can be known is the amount of income you receive each month. This is one of the things that is considered when credit limits are being set. To properly gauge your income level, you will be expected to put in some forms, these include Form 16, your salary slips, if you have any income tax returns, they would come in handy, and then any other relevant document that attests to your income. You can submit all these in addition to your application. Once the issuing company requests all these, make sure you submit them otherwise your ability to pay back a loan will not be ascertained and your application could be rejected.
READ ALSO: ARE CREDIT CARDS RATES GOING UP?
3. The work you do
Your occupation is a serious indicator when your application for a credit card is being considered. Sometimes, some companies might reject an application because of your occupation. It is not necessarily about your work but how stable the work is. Work that is not stable or if you have a working history that is not stable, you only put yourself in a very uncomfortable situation where the company might not be convinced of your ability to consistently pay your bill since your job security is not assured. This can greatly affect your application and could lead to your application being rejected.
4. Making mistakes within the form you are submitting
This doesn’t look like a major issue, one could think that since every other information needed is provided, all is well, but it is not. If while filling out the application form, you make a lot of mistakes in the form, these errors could cause your application to be rejected. Be careful you are not leaving out the necessary information that is demanded of you. Also, mistakenly giving our wrong details could be detrimental to your application. Make sure you are putting in the correct information and make sure you are not leaving out any spaces when filling out your application form. If you should omit anything that is needed, you might not be called for it, it could just lead to an outright rejection of your application.
5. Having a lot of cards
You increase the chances of having your application rejected if you already have a lot of cards in your name. Your debt-to-income ratio has to be good. When you have too many cards, what happens is that the money leaving your account will be too much and that will affect how convinced the issuing company will be that you will be able to pay loans given to you.
Credit card companies like it when there aren’t too many deductions from your account all the time. Lending companies do not prefer people who are almost always having money leaning their account at a frequent rate. This is something you have to look out for before you apply for a credit card. It is one reason why your application can be rejected
6. Verifying where you stay
Not much can be said about this, but if you do not have a traceable location, it is going to be very difficult to have a credit card to use. The problem is that it is going to be difficult to find you. Also if your history is such that you are almost always on the move and do not stay in one place for even six months, a company giving you its money cannot trust your availability at your current residence. This can affect your application as well.