Debunking credit card myths: What can you do if your application isn’t immediately approved?

Editor’s note: This post has been updated with new information.

It’s no surprise that travel rewards credit cards are a popular discussion here at TPG. By strategically opening and utilizing them, you can earn large sign-up bonuses and extra points in a variety of categories of everyday spending, which can lead to fantastic redemptions like premium-class flights and luxurious hotel rooms.

However, there are a number of misconceptions out there when it comes to credit cards.

Today, I'll take a look at what happens when you aren't immediately approved for a new credit card.

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Myth: There’s nothing you can do if your credit card application isn’t immediately approved

Those of you who have been involved in the hobby for a while know there’s a certain euphoria that comes with getting approved for a new credit card (or maybe it’s just me). When you submit an application, those 20-30 seconds of processing can seem like an eternity. But when that immediate approval comes through, your mind starts thinking about how you’re going to redeem those bonus points or miles.

Unfortunately, there are two other pages that can come up after you click the button to submit your application, and these can bring the exact opposite reaction.

The first is an immediate denial — which is typically a done deal. If the issuer immediately decides to decline your application, there's rarely anything you can do.

However, there's another result: the approval pending page.

In general, this means you've falling into the limbo known as a “pending” decision. When this happens, the issuer can’t immediately approve you based on the information on your application and the inquiry it ran on your credit report. Instead, it needs more time (and sometimes, more information) in order to come to a final decision.

In some cases, the approval comes without action on your part. In the past, I’ve received an email a few days after getting the “pending” notice letting me know that I have been approved. At least one other time, the new card simply showed up in my online account (and then arrived in the mail a few days later).

Related: Why banks are struggling to assess creditworthiness during the coronavirus pandemic

That being said, if you want to help ensure that a “pending” application turns into an approved application, there’s an important step you can take: Call the issuer’s reconsideration line.

Using the reconsideration line

All banks that issue credit cards have automatic systems for processing online credit card applications, and these systems have a variety of factors that they consider. A large chunk of this is your credit score, which includes details like your payment history and credit utilization rate. But banks will also look at the income you reported on your application and the relationship you have with them. If your details fall below the preset thresholds, you won’t be automatically approved (and may even get denied).

This is where reconsideration comes in, as it allows you to speak to an actual person who may be able to override those systems.

If you’re immediately declined for a credit card, I’d generally wait until you receive the formal rejection letter in the mail before calling. This will outline the reason(s) your application was denied and give you a chance to plan your talking points before calling — though convincing a customer service agent to overturn an immediate denial is a relatively hard task.

On the other hand, if your card goes into “pending” status, there are two schools of thought about calling the reconsideration line:

1. Some feel like you should let the process unfold and then call if your application is eventually denied. They believe that calling preempts the regular review process and could actually hurt your chances.
2. Others believe that you should call a few days after applying — or even right away, before an issuer has a chance to turn a pending application into a denied one.

Personally, I belong to the latter camp. I would rather get ahead of the issuer's process — and I've had plenty of success doing so. It’s often as simple as verifying the information you submitted or shifting credit lines from an older card to the new card.

Now, keep in mind that there are cases where there's little chance of a successful reconsideration call. The most prominent example is Chase’s 5/24 rule. If you’ve opened five or more new card accounts in the last 24 months, you will almost certainly be declined when you apply for many Chase cards.

However, other reasons you're likely to be denied include:

• Insufficient income.
• High debt-to-income ratio.
• Applying for a credit card outside your credit score range.

In these instances, calling reconsideration generally will get you nowhere. Nevertheless, in most other situations, it can’t hurt to try.

Related: Your guide to calling a credit card reconsideration line

Bottom line

When you apply for a new card, there are generally three results: approval, denial or “pending” status. While one of those is (obviously) preferred, all hope is not lost if you get either of the other two notices. Calling a reconsideration line and speaking to a customer service agent can go a long way toward turning a non-approval to an approval.

Be sure to keep this in mind the next time you aren’t immediately approved for a new credit card.

Additional reporting by Madison Blancaflor and Robert Thorpe.

Photo by Stevica Mrdja/EyeEm/Getty Images.