Applying for a credit card for the first time is an exciting prospect, as it opens up possibilities to make purchases and manage expenses more easily.
However, once you submit your application, you may have a question in your mind whether the credit card will be approved or not, if approved are you bound to accept it?
You will have many options but make the right decision while applying for a credit card as per your financial goals. In this article, we will explore the different scenarios of credit card decline after applying.
Credit Card Application Process
Before considering the options for declining a credit card, let’s go through the general credit card application process. When you apply for a credit card, you usually fill out an application form either online or through a physical application.
The form requires personal information such as your name, address, income statement and social security number, along with other relevant details.
After applying, the credit card issuer reviews your credit eligibility by checking your credit history, credit score and other financial factors.
Based on their reviews, they will either approve or reject your application. If approved, you will receive a formal credit card offer from the issuer.
Credit Card offers and terms
Once your application is approved, the credit card issuer will send you a formal offer letter. This letter will detail the specific terms and conditions of the credit card, including credit limit, interest rate (APR), annual fee (if any), rewards program and other relevant information.
See also – Credit card dimension
Credit Card Decline Options After Applying
If you get a credit card and are wondering whether to accept it, here are your options:
- Accept or Reject: One option for you is to accept initially and close the credit card account later. If you feel it does not meet your needs or expectations, you may cancel it by contacting customer service. Keep in mind that closing a credit card account may affect your credit score.
- Contacting Issuer to Decline: If you decide not to accept the credit card or credit card offer, you may contact the credit card issuer directly to inform them of your decision. Most issuers will honour your choice, and the application will be cancelled without any negative impact.
- Returning Card: The credit card issuer may also send the physical credit card along with the offer letter. If you have received a credit card but wish to decline the offer, you may choose not to activate it and return it. Be sure to check with the issuer about their policy for card returns.
- Ignoring Credit Card Offers: You can ignore the credit card offer, although it may not be effective immediately. The credit card issuer may continue to send reminders or even contact you to encourage acceptance.
What happens if we decline a credit card?
You have the freedom to decline a credit card offer without immediate consequences, but here are a few things to keep in mind:
- Impact on Credit Score: When you decline a credit card, it can have an impact on your credit score. Credit card issuers may report declined applications to the credit bureaus, and multiple declined applications within a short period of time can negatively impact your creditworthiness.
- Decrease Credit Limit: Declining a credit card offer means losing the credit limit provided by the card issuer. So, this may limit your large purchases or unexpected expenses.
- Missing out on rewards and benefits: Credit cards often come with rewards programs, cashback offers or other benefits. By declining the card, you miss out on the opportunity to earn rewards and offers.
- Lost balance transfer opportunities: If you were planning to use the new credit card for a balance transfer to consolidate debt or take advantage of a promotional interest rate, declining the card means you’ll have to pay interest.
- Delayed financial goals: A credit card decline can affect achieving certain financial goals, such as improving your credit score or getting a card with better terms and benefits.
- Application Challenges: If you are declined after applying for a credit card, it may be difficult to get approved for other credit cards. Repeated rejections may indicate to lenders that you are a high-risk borrower, which may also pose challenges in securing a loan.
After a credit card application is declined, review your credit report for any errors or inaccuracies. Monitoring your credit report helps you maintain a healthy credit profile.
Tips for credit card management
Credit card management is essential to maintaining a healthy financial profile, here are some tips to keep in mind:
- Read the terms: Always read credit card offers carefully and understand the terms and conditions such as interest rates, fees and rewards programs.
- Use a credit card wisely: Use it responsibly and avoid maxing out the credit limit and try to pay your balance in full on time every month.
- Monitor Your Credit Score: Monitoring your credit report will help you maintain your financial health and resolve any issues promptly.
- Avoid multiple applications: Multiple applications for credit cards in a short period of time can have a negative impact on your credit score.
Conclusion
Once you apply, you are not bound to get the credit card accepted. You have the option to decline the offer, return the card (if received) or close the credit card at a later date if it does not meet your requirements. However, regardless of the credit card options you choose, responsible credit card management is vital to a healthy financial future.
