Credit card rejection numbers continue to rise

It is been revealed that 48% of all credit card applications in the UK were turned down in 2009 against 42% in 2008. These figures compare unfavourably to the standard rejection rate which was running at around 30% prior to the credit crunch. So why are credit card companies rejecting more and more customers?

It is becoming obvious that credit card companies in the UK are becoming ever more concerned about potential defaults and losses on their credit card operations. As a consequence more people than ever before are being rejected even though many of them may have "clean credit records". The points-based system which is used when considering applicants for new credit cards and new finance has been tightened to ensure a "higher than average degree of safety" for credit card companies.

Even though 2010 is still seen by many as a turning point for the UK economy it is highly unlikely we will see a sudden flurry of successful applicants in the short term. Credit card companies have struggled to maintain their profit margins in these most difficult of economic times and indeed their strategy of increasing credit card interest rates to maintain their margins, and offset the impact from those who have defaulted on their repayments, has made the situation worse in the short term.