What To Do If You’re Denied For A Credit Card

We’ve seen an uptick in card denials recently, especially when it comes to Chase Ink cards. So, on that note, let’s go over some best practices and what to do next if you’re denied for a credit card.

Find out the reason

First and foremost, you need to know the reason for the denial. Banks are legally required to send you a letter explaining their reason for denying your application. This is typically a letter in the mail, and it can take up to 10 days to receive. However, sometimes you will receive an email sooner that includes the same information as the mailed letter.

Many times, the reason is as simple as a mistake on the application. Maybe you entered your social security number or address wrong. This can be fixed quickly by calling the bank to inform them of the mistake.

Other common reasons for denial include:

• Low credit score
• Low/no credit history
• Too many recent inquiries (hard pulls on your credit report from credit card or loan applications)
• Too much extended credit

Call the bank

If you’re denied for a credit card because of a mistake on your application, the first step is to call the bank. You can explain the mistake, and they can take a look at your application again. If there are no other reasons for the denial, you should be able to turn it into an approval once the mistake has been fixed.

If your denial is for other reasons, you can still try calling the bank and asking them to take another look at your application. You can see if there are any questions that you can answer that may help turn it into an approval. If the reason is too much extended credit, you may be able to move credit from one of your current cards to the new card you’re applying for.

This article has all of the bank phone numbers.

Close old cards and/or lower credit limits

If your reason for denial is too many cards and/or too much extended credit, you can do a few things. First, if your cards have been open for at least a year, you can consider downgrading or closing them. This article is helpful in deciding which is the best option.

This can be especially helpful with Chase since they are more sensitive to the amount of cards you’ve opened and credit that you have with them. As I mentioned we’ve been seeing more denials recently from Chase, especially with business cards. I would highly recommend waiting a full 90 days between applications and alternating between business and personal cards.

Switch things up

Furthermore, to help spread applications out, it can be helpful to alternate between banks so that your applications within one bank are further apart. Some banks, like Capital One and Chase are more sensitive to recent inquiries, while others, like Amex, are not. If you’ve been denied for a credit card by one bank, it can be helpful to try a different one.

There are four major banks which offer flexible points and co-branded cards:

• American Express
• Capital One
• Chase
• Citi

And there are a handful of smaller banks which offer cash back and co-branded cards:

• Wells Fargo (although they did just come out with a flexible points card, it’s still considered a “smaller” bank in terms of travel rewards cards)
• U.S. Bank
• Barclays
• Bank of America
• Discover

If you were denied by one bank, check out options from one of the other ones. I would recommend waiting at least 30 days between a denial and a new application.

One other thing to note is that each bank pulls from and reports inquiries to different credit agencies. There are three – TransUnion, Equifax, and Experian. You can search online which banks use which agencies. You can also get free credit reports through nearly all banks (even if you only have a checking or savings account), or you can get your credit report online. This is helpful when deciding which bank to use to apply for a new card. You may want to choose one that is showing fewer inquiries on your credit report.

Wait it out

And finally, sometimes you have to just wait. This is especially true if the reason you were denied for a credit card is too many recent inquiries, low credit score, or low credit history. Here are some ways to improve each of these situations.

If the problem is recent inquiries, this just requires time. You will need to wait longer until your next application. Alternatively, you could apply for a card through a bank like Amex which isn’t particularly sensitive to recent inquiries.

If the problem is low credit history/low credit score- If you have very few (or no) credit lines in your name, then it’s harder to get approved for cards. Additionally, approval can be difficult if you have a history of late or missed payments. To help with this, you can open a simple beginner card, like the Capital One VentureOne Rewards Credit Card or the Chase Freedom Unlimited®. These are cards with no annual fee and a smaller bonus. They are typically easier to get approved for and can help build your credit history and score over time. Just remember that it’s imperative to pay on time and in full each month. This is what helps your credit!

Another option for helping your credit score and history is to have a friend or family member add you as an authorized user to one of their oldest cards. Make sure it’s a person who you trust, who has good credit, and is financially responsible. Even if you never use the authorized user card they open for you, their credit history will be reflected on yours, which will help.

In conclusion

Denials happen to all of us, myself included. And that’s okay. It’s important to understand why they happened and consider your options moving forward. Make a game plan for what to do over the next 3-6 months, and keep going. Award travel is a marathon, not a sprint, so it’s important to focus on the long term.