Credit card rejections up 17%
Monday, 05 November 2007 12:00
Credit card rejection rose 17 per cent in the last six months.
Some 3.27 million people have had applications for credit cards turned down since March, compared with 2.7 million in the previous six months, according to figures from MoneyExpert.com.
The rise in rejections is a knock-on effect of the credit crunch, as credit card firms become more wary about whom they lend to.
"Credit card companies have had a rough ride with bad debt so it's no surprise that they are becoming stricter on who they'll lend money to," said Sean Gardner, chief executive of MoneyExpert.
"And with so many of us feeling the pinch following five interest rate rises since summer last year, credit is undoubtedly harder to come by than it has been for a long time."
Young adults are the most likely to be turned down for credit cards with 15 per cent of those aged 25 to 35 being rejected for credit card applications in the last six months - compared with just three per cent of those aged 55 to 64.
Mr Gardner added good credit card deals are still available.
"It's just that fewer people will be able to take advantage of them now that the financial environment has become stricter. If you can't convince a provider that you can afford to repay them, they may not take a risk on you," he said.
"The real worry is that many people who are already in debt will find it increasingly difficult to drag themselves into the black. As your disposable income decreases, the hardest hit are those who owe money as simply servicing your debt can become a burden, let alone paying it back."
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