One of man’s greatest inventions is the credit card. By just using a piece of plastic, you can buy groceries, buy a plane ticket, shop, eat in a posh restaurant or do anything you fancy. It is the apex of human ingenuity applied in the field of finance and daily living and it symbolizes the purchasing power of the modern man. However, very few people realize that it is also a very expensive financial tool. It would be most ideal for people if they can get a lower interest rate on credit cards.
The most expensive credit facility
Using as a credit card will cost the cardholder loads of money in the form of high interest rates. The credit card is a form of unsecured loan that usually charges higher interest than car loans and other loans that have some sort of security. The creditor has no control over the amount that the cardholder will purchase by using the credit card. It is because of the fact that the card holder has a freehand in using the card that financial difficulties start to brew. When hard times come, credit card holders tend to use the card more to make up for the lack of income being experience, unwittingly driving up the cost of living.
Controlling the Use of Credit Cards
It is therefore wise to control the use of credit cards to manageable levels in order not to suffer from the consequence of high interest costs that follow. Some groups of people have a lifestyle that makes it hard for them to control the use of their credit cards. If you belong to this category, your only solution is to find a way to obtain a lower interest rate on credit cards. The best way to do this is to negotiate with the company that issues your card. It is not hard to transact with credit card companies because they are always accommodating to their clients.
Negotiating with the Credit Card Company
If you notice that the use of your card has significantly increased, you should make an appointment with your credit card company and negotiate for a reduction in interest charges. You have to make a quick survey of the prevalent interest rates of various loans in your locale so you can negotiate better. Ask the company for a lower interest rate mentioning the fact that you have substantially increased the volume on your credit card. Most credit card companies will acquiesce to such requests because they value the high volume of business generated by their credit cards.
Other Options are Available for the Cardholder
You should not lose hope if the credit card company will not consider your request. There are other ways to get a lower interest rate on credit cards. One way is to reexamine your lifestyle and see if you can get rid of some extravagant expenses that you don’t really need. Another way is to transfer your balance to another credit card company that offers lower interest rates on their cards.
You are very excited! You have applied for a credit card and you are now ready to charge that vintage bag to your much awaited card. All the while, you have assumed that it will be delivered after weeks of application. But your impatience looms after several weeks; and upon checking with the company, you finally heard what you least expected: “I’m sorry, your credit card application has been denied”.
You are left with questions hanging on your mind but no specific reasons are given by the credit issuer. This so familiar circumstance is being encountered by many credit card applicants. If you’re still wondering why you are rejected, below is a list of the most common reasons:
- Insufficient information supplied. The application form you are filling in is very vital and will be used as the main reference; it is highly advisable that you carefully check on your forms before submitting them. Apart from this, required documents such as identification cards and financial records must be complete. Missing and incorrect information will likely be a basis for your rejection.
- Financial status. Income requirements vary among different card companies. There are those who only require a minimum but there are companies who even check on the borrower’s work history to justify that they can consistently pay for their loans. If you have a very low income or an unstable job, there will be a great possibility that you will be denied.
- Bad credit report. If your financial record states that you haven’t paid for your long standing loans or if your loan balances are too high, your chances of being approved is very slim. Pay for your outstanding debts first before applying to clear out your credit balances.
- Several credit cards. Over access to too many credit companies will make lenders think if you are still capable of paying another one. Always remember that credit companies offering multiple cards will not approve individuals who have already been using one of their cards. Furthermore, applying for several cards will make you look over stretchy who badly needs an overdraft account to cover for your debts.
- Charge-off. This is a credit card balance that is not paid for six months or more. This will pose a negative picture on your credit report since this is a declaration that your existing card company cannot collect payments from you. This will thus be a factor for your rejection.
- Very limited borrowing experience. There is a risk of non-acceptance if you haven’t used any lending facilities before. Not having a credit score will not prove your history of managing your debt and will not assure the credit companies that you are responsible on paying off bills and debts on time.
It’s really frustrating to have your card application disapproved especially if you have spent time comparing and finding the best credit card for you. If you have recently been rejected considering your good credit standing, it will be timely to check your file to know what has affected your unsuccessful application.