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Why is my Credit Card Denied?

You see your friend swipe his credit card. The new laptop and Smartphone are soon his. You are tempted to do the same. You apply for a credit card with a bank. But surprise….The bank has denied you a credit card. You wonder why is my credit card denied?

The Age Restrictions

Banks issue credit cards if you are between 18-65 years of age. Banks generally do not issue credit cards to minors (Below 18 years of age), and senior citizens above (60-65 years) of age. If you fall in this age group, banks believe that you do not have the necessary income to avail a credit card. You could fall back in repayments and default on your credit card dues. The bank would have to chase you to recover the dues. This means banks are reluctant to issue credit cards to senior citizens. There are exceptions, and if a senior citizen has a good source of income, then the bank may issue him a credit card.

Your Income

Banks issue you a credit card, only if you earn a certain minimum salary. You need to have a minimum salary/income of over INR 1,80,000-INR 2,00,000 a year, for the bank to issue you a credit card.

Banks believe that you would struggle in your repayments, if your income/salary is very low. More you earn, more easily would you be able to repay your credit card dues.

The Company Where You are Employed is Not Listed

If you work for a reputed Company (listed on the stock exchange), then the bank easily issues you a credit card.If you work for a non listed Company then the bank believes your job is not secure. You could be sacked and then you could struggle with your repayments.

The banks believe that in extreme cases the factory/Company could shut down making it extremely difficult for you to make your repayments.If you have a stable employment over many years, a high income and a good credit score then you might still be issued a credit card by the bank.

A Bad Credit Score

Banks send details of your repayments on earlier loans you have availed each month to Cibil.Cibil assigns you a score between 300-900.If you have defaulted or fallen behind on your repayments on your earlier loans, then Cibil gives you a low score.This makes it extremely difficult for you to get a credit card or even a loan from the same or any other bank.

This is Your First Credit Card

If you have never availed a credit card from a bank, no history of you exists with Cibil. This causes banks to be highly careful when issuing credit cards to a first timer. The banks have no idea of your repayment history (Whether you would be prompt in your repayments or whether you would pay back the credit card dues at all).

It would be easier for you to avail a credit card if you take it from a bank where you already have an account (An existing relationship).Then you do not have to ask the question Why is my credit card denied?

So if the bank has denied you a credit card don’t be alarmed. Check for the reason and avail a credit card from your own bank if possible.

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