Fine print, Living with credit

Why your credit application was declined and what you can do

Lyn Mettler

You’ve got good credit and want to add a rewards credit card to your wallet. Maybe you’re already planning how you’ll spend that bundle of points from the sign-up bonus. Your application, though, is denied.

What can you do? I’ve received the dreaded decline more times than I care to admit, but often it’s not the final word.

When playing the miles and points hobby, banks tend to tighten their approvals even for those of us with good credit scores.

When your application for a credit card is denied, the bank is required to tell you why or explain that you have the right to learn the reason if you ask within 60 days, under the Equal Credit Opportunity Act. Usually, the bank sends you a letter within seven days listing a reason why your application was declined.

Here are some reasons your application was declined (based on my own experience) – and some things you can do to maybe get the card you want.

Not enough information

My first foray into miles and points was to earn the Southwest Companion Pass, which lets one person fly nearly free with you for up to two years.

My strategy back in 2015 was to apply for one personal Chase Rapid Rewards Plus credit card and one business Rapid Rewards card, netting me most of the 110,000 qualifying Southwest points I needed to earn the pass.

My application for the personal card was approved, but I was declined for the business card. There went my Companion Pass hopes!

However, when I received the letter from Chase, it stated that the bank did not have enough information to approve me.

What to do: Time to call the reconsideration line.

When I called, I learned Chase just needed more paperwork to verify I owned my business. It was inconvenient to gather the papers that the bank needed, but it proved worth it when I received my business credit card in the mail.

I had my first Companion Pass in hand by the end of that year.

Too many credit inquiries

Another common reason card applications are declined is you have made  “too many credit inquiries or applications.” Sometimes the bank may add “in the last 30 days.”

This has happened to my family.

We received the “too many credit inquiries” reason after buying a new car and shopping around for the best interest rates and deals. We had been told that the credit bureaus would count all those inquiries as one, recognizing they were clearly for one major purchase, but that is not the case if a vehicle search drags on.

What to do: Simply wait 30 to 60 days, then apply for the card again.

We also received the “too many card applications in the last 30 days” when my husband applied for Chase Sapphire Reserve. Less than a month before, he’d applied for a Chase Slate, a great balance transfer card to help work down balances with high interest rates.

Turns out we applied for the two Chase cards too close together.

We’re not alone. Many of my Go to Travel Gal readers also have been declined when seeking a card too close to applications for other cards.

What has worked for my family, and what seems to always work for my readers, is to wait until 30 days have passed from your first card application and then call the reconsideration line.

Once we did this, my husband was approved for the Reserve and its then 100,000-points sign-up bonus.

Issuer limits on the numbers of cards you can hold

According to William Charles, who writes the Doctor of Credit blog, American Express allows you to hold only four AmEx cards at once, and he says Capital One limits you to one card every six months.

Chase, as you no doubt know, has its 5/24 rule, which means the bank won’t approve you for any new Chase cards if you’ve opened five or more credit cards from any issuer within the past 24 months.

Chase also has given me as a reason for a decline that I can hold only three Chase cards. This doesn’t seem to be a universal standard, but one set for “lucky” me.

What to do: If you really want the credit card and run into a card issuer’s limits on the number of cards you hold, ask the bank to close one of your other cards from that issuer. This would let you get the new card or move credit lines between the closed and new cards.

Note, though, that I haven’t tried this tactic yet.

The common lesson here is don’t give up or despair if you were declined despite good credit. It happens to the best of us and usually, with a little patience, you can ultimately get that next card on your list.

See related: 10 things NOT to do when you apply for a credit card, Credit card application rejected? 3 steps to getting the next one approved

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