Owning a credit card has tons of benefits especially if you use it properly. I have mentioned this repeatedly in my previous credit card blog posts and I’m going to say it again – credit card is one of the most powerful financial tools available to a lot of people.
It can help you a lot if you know how to manage your credit card usage or it can break you if you get out of control in using it.
Getting a credit card is like a ritual passage to adulthood, and if you are worried about whether you’ll get approved for your first credit card, then read on.
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Note to Readers: Please be advised that the information written here such as Minimum Income Requirement, etc is valid as of the time of writing but may have been updated by the time you see/read this post. Please refer to the banks’ webpages to get the updated details. Please also note that the reasons itemized here are just possible reasons based on my observation and other available data/articles online and may not be the actual reasons why your credit card application may have been denied. Kindly take this blog post with a grain of salt and do your own diligence as well.
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Why is it Difficult to Get Approved for a Credit Card?
I often hear this statement back in my previous employments. A handful of my colleagues seem to be always getting denied whenever they apply for a credit card.
Even some of my friends get denied whenever they try. In my personal experience, there is a variety of possible reasons why a credit card application gets denied.
Bear in mind that when a bank or a credit card company, approves your credit card, they are taking a risk on you – the risk of not getting paid back. This is most probably why they take great measures in knowing each and every credit card applicants by checking their credit history, calling their references such as their present employments, etc.
Here are some of the possible reasons why people get denied on their credit card applications.
Unpaid Credit Card Debt
If you have an unpaid debt with your previous credit card and if it went to the collection agencies because you just ignored your credit card debt, then chances are, your future credit card applications may get denied.
Just think about it, why will another bank or credit card company, take a chance on you if you already have a history of not paying your credit card?
Unpaid Bank Loans
Even if your unpaid loans are not taken from credit card companies, it might still have an effect on your credit card application. A friend of mine who is a high-earner keeps getting denied with her credit card application even if she doesn’t have any outstanding credit card debt. She does have though an unpaid bank loan which she hasn’t settled yet.
You’re Not Qualified
The basic qualifications in getting a credit card are clearly enumerated in all of the banks’/credit card company’s websites. Some of the basic requirements include (please note that this may vary depending on the bank/credit card company):
- Valid Government ID
- Landline
- At least 21 years old (might vary depending on where you are located)
- Latest Payslip
- Latest Income Tax Return
- Certificate of Employment/Business Registration Documents for Business Owners and Entrepreneurs
- Minimum Income Requirement (varies depending on the type of credit card)
If you don’t meet any of the basic requirements, then there’s a chance of not getting approved.
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How to Get Approved for a Credit Card
Settle All Delinquent Debts
If you have any delinquent debts with banks or credit card companies, settle them all ahead of your credit card application to increase your chances of getting approved. Aside from getting a higher chance of getting approved for your credit card application, settling your debts would also give you more peace of mind, right?
Meet the Requirements
To ensure that you increase your chance of getting approved, be sure to meet all the requirements and to submit all the documents being asked from you by the bank.
Another thing to keep in mind is to meet the minimum annual income requirement for the card that you are applying for. Different credit cards have different minimum annual income requirements.
For example, let’s say you want to have a Citibank credit card and you specifically want a Citi PremierMiles credit card, even if you have the first 6 requirements (that I mentioned earlier) if your income falls below their minimum annual income requirement which is P360,000 (as of the time of writing), then there’s a chance that you might get disapproved.
However, if you apply for a Citibank card that meets your annual income then you’ll have a higher chance of getting approved.
Citi Simplicity has a much lower annual income requirement than Citi PremierMiles. Its annual income requirement is just P180,000.
Click here if you want to apply for a Citibank credit card and if you want to see the list of Citibank credit cards and their requirements.
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Go for The Entry Level Cards
If you don’t have a credit card yet, I suggest that you apply first for the entry-level credit cards. Entry-level credit cards are the cards that are marketed towards young professionals who are just starting out in their careers. Usually, these cards are the ones with:
- Lower Annual Income Requirement
- Lower Annual Fee
- Fewer Perks than Elite Cards (of course)
Once you established a good credit standing, and once your annual income has increased, then, that’s the time to apply for a more feature-packed credit card. Bear in mind though that most credit cards with tons of features tend to have higher annual fees too.
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Get a Secured Credit Card
Secured credit cards are credit cards guaranteed by a deposit made to the bank. In my observation, approval tends to be easier (100% according to some articles I’ve read online) because technically, you have a deposit that acts as some sort of collateral.
Make Follow-Ups
When I applied for my RCBC Platinum Visa Credit Card, I initially thought that my credit card application was rejected. A friend of mine who I applied with on the same day/time already got his RCBC card weeks before I got mine. I really thought that my application was denied.
So, I called RCBC and asked for an update. They said that it was still being processed. Perhaps, they conducted additional checks or whatnot, but I eventually got my credit card.
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What to Do When You Get Approved for Your First Credit Card
Once you get approved for your first credit card, I highly suggest that you do the following:
Get Familiar with the Terms and Conditions and Charges
This is one mistake that I will never forget. When I got my first credit card, I didn’t bother with educating myself about important information such as:
- Important dates to remember (Cut-off date and Due Date)
- Charges I could have avoided such as Late Fees, Interest Rates, etc
I was a fool when I got my first credit card and I maxed it out right away. I also didn’t pay for the full amount which cost me charges that I could have avoided only if I educated myself about the proper use of a credit card.
Be Mindful in Using Your Credit Card
I remember when I got my first credit card, I got so excited, I swiped it to my heart’s content as if it was my own money. The thing is, credit card balance is THEIR (banks/credit card companies) money made available to us. That means it’s THEIR money that we need to pay back in a certain period of time to avoid getting charged whatever applicable fees.
As I have said earlier, if used properly, you can reap the tons of rewards and benefits that credit cards offer. However, if you are not mindful of using your credit card, then you might end up in debt.
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Pay on Time and In Full
The best way to avoid unnecessary charges, make sure to pay on time and pay in full. After my stumble with my first credit card, I have trained myself to only swipe what I can pay for in full every due date.
By only charging what I’m capable of paying, month after month, I get to avoid paying for charges such as Late Fees and Interest.
Secure Your Credit Card at All Times
Credit card scams are increasing as days go by. It was only recently when the news broke out about a public official in the Philippines who’s credit card got hacked.
To minimize the risks of getting your credit card compromised, secure your credit card at all times.
Banks and credit card companies do make an effort in educating their customers about this issue. I often get emails from Citibank, BPI, and RCBC about tips on using and securing my credit card.
Also, educate yourself with the existing credit card scam cases in your country to help protect yourself from getting victimized.
It would also help if you familiarize yourself as well with the security features of your card. If you think that your credit card has been compromised, call the customer service hotline of your credit card company to check if there are any floating charges that you are unaware of.
Final Thoughts
Owning a credit card can be a blessing and a curse depending on how you use it. The rewards and benefits are really amazing if you use your card properly.
How to Get Approved for a Credit Card Click To TweetDo you have additional tips and suggestions to share? Feel free to share your inputs in the comment section below.
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