What I learned from each of my rejected credit card applications
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With all our talk of Maldivian vacations and luxury first class flights, you might be fooled into thinking that nothing ever goes wrong for the points pros here at TPG. While it’s not always fun to talk about, rejected applications are simply a part of life in the points and miles world. In fact, I’d argue that if you’ve never been rejected for a credit card, you probably aren’t applying for enough which means you’re leaving valuable welcome bonuses on the table.
Related reading: How bad is it to get denied for a credit card?
Since 2015 I’ve submitted a grand total of 41 credit card applications. Of those, 13 of my applications were rejected (including a few rejections for the same cards). While it’s never fun to have your hopes dashed like that, I’ve done my best to learn something from each rejection, either about the specific card or issuer in question or about the broader state of credit card rewards.
Here are a few of the most valuable lessons I’ve learned from my rejected applications over the years. It’s been a few years since some of these applications and I don’t have the original rejection letters, so the reasons for denial are paraphrased to the best of my recollection but are not the exact legal language the banks used.
What to do if your application is rejected
Before I jump into my specific rejections, I want to highlight the fact that you don’t always need to take no for an answer. Just because an issuer denies your initial application, doesn’t mean you should give up hope. Issuers are required by law to give you a reason why your application was rejected, and once you have that information in hand you should always call the bank’s reconsideration line and see if you can get the decision reversed.
Of course just calling in and saying “please, I want it” won’t work, but if you can explain to the reconsideration agent why they made a mistake and why you’d be a good customer, you might have some luck. For example, a common reason for rejection (especially as you get deeper into the points-and-miles game) is that the bank has already extended you too much credit and won’t give you any more. A common workaround for this is to offer to transfer some credit limit from one of your existing cards to the new one.
There’s no guarantee that this will work, but given the potential upside it’s always worth making the five-minute call to try. I always call the reconsideration line when I’m rejected, and so all the examples you’re about to see are applications that were denied even after reconsideration line.
Related reading: How bad is it to get denied for a credit card?
Too short of a credit history
Card I applied for: CitiBusiness® / AAdvantage® Platinum Select® Mastercard® The information for the CitiBusiness AAdvantage Platinum card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Reason for denial: Less than one year of established credit history.
What I learned: When I was just starting out with my first couple of credit cards, I had a huge advantage (no pun intended). Before I left for college, my dad had added me as an authorized user on his United Explorer Card which he’d had open since before I was born. This meant that at age 20 I had 20 years of credit history, and had no problem getting approved for the Chase Sapphire Preferred® Card as one of my first cards.
I managed to successfully get approved for seven credit cards in my first year before I ran into my first rejection. Opening so many cards so quickly dropped my average age of accounts, an incredibly important factor that accounts for roughly 15% of your credit score, down from 20 years to just a handful of months.
This is how I learned the hard way that many credit cards will auto-reject you if your credit history is less than a year long. There was nothing I could say to change that, it was a hard rule and I wasn’t getting around it.
If you find yourself just starting out with less than one year of credit history (or even no history at all), that doesn’t mean there’s no hope for you. Focus on starter cards and build a relationship with the issuers you’re interested in, instead of applying for their best cards out of the gate. Speaking of which…
Going premium too fast
Card I applied for: Chase Ritz Carlton Rewards card (closed to new applicants)
Reason for denial: Not enough established credit history
What I learned: The second major international trip I planned with my points and miles was two weeks in Thailand with my girlfriend. I scored an incredibly elusive Cathay Pacific first class award on the outbound, and wrote my first ever flight review for TPG on the way back, flying Air Canada 787 business class from Tokyo (NRT) to Toronto (YYZ).
This trip included a great mix of luxury accommodations and affordable Airbnbs, but after spending three nights on the island of Koh Pha Ngan for the infamous full moon party, I really wanted to surprise my girlfriend with a few nights at the Ritz Carlton Koh Samui. At the time the Chase Ritz Carlton Rewards card (now closed to new applicants) was offering a sign-up bonus of two free nights at most Ritz Carlton hotels, and it seemed like it was meant to be.
Back in 2016 this card wasn’t subject to the 5/24 rule, so I thought I’d have pretty good odds. Unfortunately, Chase wasn’t interested in giving its most premium credit card (at the time) to a 20-year-old college student whose income barely exceeded his beer budget. While I’d had no problem getting approved for the Chase Sapphire Preferred and a handful of other Chase cards, I got the message loud and clear: without a higher income, a more established credit history (or ideally both), premium cards would remain out of my reach for a while longer.
Inquiry sensitive banks
Cards I applied for: Capital One Spark Miles for Business, Citi® / AAdvantage® Platinum Select® World Elite Mastercard®. The information for the Citi AAdvantage Platinum card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Reason for denial: Too many recent inquiries
What I learned: The most frustrating rejections in my mind have always been the ones where I felt like I did everything correctly, I followed all the rules and still couldn’t get approved. On Oct. 19, 2017, I tried my first “app-o-rama,” applying for multiple cards at the same time in the hopes of getting approved for both before the new inquiries hit my credit report. I was sitting in the back of a physiology lecture when I hit submit, and I had to contain my anger when both applications returned instant rejections.
So what went wrong? I’d already applied for nine credit cards that year, to say nothing of the 11 (eight approved and three rejected) from the year before, and while my credit score was above 750, my credit report was littered with recent inquiries. Unfortunately Citi and Capital One are both incredibly sensitive to this. I’ve heard stories from plenty of friends with 800+ credit scores who’ve been rejected by both issuers for having too many recent inquiries on their credit report.
Related reading: How does applying for a new credit card affect my credit score?
From the bank’s perspective, too many recent inquiries signals some level of desperation. Either you need access to more lines of credit (which suggests underlying financial problems), or you’re churning through welcome bonuses too quickly, and either way it means you’re less likely to be a valuable customer.
This is not to say that you shouldn’t apply for Citi or Capital One cards if you have recent inquiries on your credit report, only that you shouldn’t be surprised if you get rejected despite a high score.
Forgetting about issuer-specific rules
Card I applied for: American Express Platinum Card® for Schwab
Reason for denial: Too many cards opened in the last 90 days
What I learned: Certain application rules like Chase’s infamous “5/24” are deeply ingrained in my mind. I know I’ve been over 5/24 for most of the last four years, and I knew the exact day I dropped back under this spring. Many other issuers have rules limiting the total number of cards you can open with them, or how fast you can get new cards, and in my eagerness and impatience, I simply forgot.
Related reading: The ultimate guide to credit card application restrictions
Amex, in addition to its “once per lifetime” welcome offer policy, only allows you to be approved for two cards in a rolling 90-day period. That’s about the most you should be applying for anyway, so I filed this rule away in the back of my brain and eventually forgot about it. When I went to apply for the Amex Platinum card for Schwab, my application was automatically rejected and there was nothing I could do about it.
Whether you’re new to the world of credit cards or an award travel veteran, it never hurts to double check the rules before you click submit. Wasting an application that has no chance of getting approved made me feel pretty stupid, and a quick 5-minute check could’ve saved me from making that mistake.
The information for the Amex Platinum Schwab card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Forgetting the lesson about inquiry sensitive banks…
Reason for denial: Too many recent inquiries
What I learned: Citi and Capital One remained my nemeses for years after that stinging dual rejection. I’ve gotten a few Citi cards approved here and there, but Capital One has still never issued me a credit card despite three applications now and an 800+ credit score. When the Capital One Spark Miles for Business launched its best ever welcome bonus of up to 200,000 miles, I figured I’d chance it again.
Only five months had passed since my initial rejection, and while a few inquiries had fallen off my credit report, I’d replaced them with a few new ones. I knew my odds of approval were low, but I decided to take the chance anyway. I was less surprised to be rejected this time around but equally disappointed to be locked out of a bonus worth a whopping $2,800.
Applying during a recession
Card I applied for: Ink Business Preferred® Credit Card
Reason for denial: “Insufficient balance in deposit and investment accounts with us”
What I learned: I started my credit card journey in 2016, about halfway through the longest bull market run in history. Things were easy and good for many years, and I’ll admit I was shocked at how many cards I was able to get approved for on a student’s income.
Of course all that ended with lightning speed this year, when the coronavirus pandemic ripped through the economy and sent the S&P 500 tumbling into a bear market in just 16 days — the fastest ever. After months of waiting, I finally dropped under 5/24 at the beginning of May and was eager to apply for the Chase Ink Business Preferred® Credit Card, which is offering a welcome bonus of 100,000 Ultimate Rewards points after spending $15,000 in the first three months.
Related reading: The surprising reason I was rejected for a Chase Ink card
I figured that a strong credit score and years of history with Chase would make it easy for me to get approved, but my application was rejected for “Insufficient balance in deposit and investment accounts with us.” Banks have taken drastic steps to lower their risk and exposure during this recession, including tightening up lending standards and cutting credit limits for existing customers.
I tried moving $20,000 into a Chase business checking account I already had open, and explaining to the reconsideration agent that this was just a first step, and I’d be willing to make Chase my primary business bank if my application was approved. Unfortunately that wasn’t good enough, and I have to say this was the most disappointing rejection of all. I’m not sure how much money it would’ve taken to overturn the decision, or if Chase is only to approve long term banking customers right now. For me the takeaway was clear: I’ll have to wait until this recession is over and the economy gets back on solid footing to reapply for this card.
Related reading: How to recession-proof your credit score
There’s no sugarcoating it: rejections suck. Even though they don’t harm your credit score in any significant way (beyond the inquiry that appears even if your application is approved), it can be hard not to take them personally even if you did nothing wrong. If you are rejected, your first step should always be to call reconsideration and see if there’s any wiggle room. If that doesn’t work, the least you can try and do is learn what went wrong so it won’t happen again.
Featured image by Isabelle Raphael / The Points Guy
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