6 reasons your credit card application was rejected
Having a credit card can be handy when you need to go cashless or even as an emergency method of payment when cash on hand isn't enough. While many claim that it's easy to get a credit card here in Malaysia, there may actually be moments where you find all of your credit card applications being rejected.
If you find yourself in such a situation, it's best to stop for a moment and consider the possible reasons as to why this is happening.
1) You made a mistake when filling the application form
Banks are not able to process your application if you forget to fill in selected fields or incorrectly write down certain information. This is especially true if the information is vital such as your NRIC number for example. To avoid making this simple and at times laughable blunder, it is always advisable to double check all your information before submitting any form.
2) You are not earning enough
A credit card is essentially a tool from which you can borrow money to make purchases and subsequently pay it back later, together with interest if incurred. With that in mind, everytime you apply for a card the bank has to determine whether you have the financial capacity to pay off what you may potentially owe. In general, excluding supplementary cards, the minimum income that you need to be earning in order to own the most basic of credit cards is RM24,000 per annum but sometimes even if you earn this much but have many other loans and liabilities – your income may be considered ‘not enough’ even though on paper you earn more than the minimum required income.
3) You have not been working long enough
This reason generally only applies to individuals who haven't been working for a very long time, namely, fresh graduates. As a general rule of thumb, most banks usually require a minimum working time period (with EPF contribution) of at least 6 months with the same company in order for your credit card application to be approved, assuming all other requirements are met.
4) You haven't been paying your current credit card bills regularly
Whenever you apply for a new credit card, the bank essentially does a sweep of all your previous spending and loans history, which is essentially a credit check. If you currently own a credit card and if you haven't been repaying your bills on time and have started snowballing a large amount of interest or had your card cut due to non-payment, then the bank might be less inclined to issue you a second card. This is why it is extremely important to try to pay down your balances before applying for a credit card if you want to boost your chances of getting an approval.
5) You already have too many credit cards
With an array of different credit cards which has various benefits available on the market, it's easy to just go crazy applying for every card that you see. After all, you can never have too many cards right? Sadly, this is very untrue. While there is no legal number on the fixed maximum number of cards that one person can own per se, there are caps if you earn below RM36,000 per annum. People with such incomes can only hold cards from a maximum of 2 issuers with the credit limit of twice their monthly salary per issuer. But even beyond this, most banks will be less inclined to issue new cards if the applicant already has a significantly large number of existing cards.
6) You applied for too many credit cards at once
This is especially true when visiting exhibition fairs where swarms of credit card booths await unknowing patrons to snag them into applying for a credit card. As you go from booth to booth applying for card after card, the likelihood of getting all applications approved slowly dissipates. Pick the card you really want and leave the rest!
It's tough to know why your credit card application was rejected specifically, so if they won't tell you why, look through this list and see if any of them apply to you.
This was brought to you by Joshua Ong from RinggitPlus.com. RinggitPlus compares credit cards, personal loans and home loans to help Malaysians get more for their money.