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Rejection of any kind is fraught with emotion — sadness, frustration, embarrassment — and that includes credit card rejection. According to a new NerdWallet survey, most Americans (70%) say they would turn their back on a bank that rejected their credit card application and would not apply for another credit product from that bank. And many say a rejection would give them a darker view of credit card issuers in general, as well as of the overall state of their own finances.
Credit card rejection isn’t uncommon. According to the Federal Reserve Bank of New York, 15% of credit card applications in June 2016 were rejected. That means a lot of Americans are dealing with the emotional toll of being evaluated on their income and credit scores — and being told they’re not good enough. In some cases, however, that toll is compounded by a lack of understanding about why credit card rejection occurs and how you can improve your chances of approval next time around.
NerdWallet commissioned a survey of more than 2,000 U.S. adults in September 2016, conducted online by Harris Poll. We asked how they’d feel and what they’d do if they were rejected for a credit card. Here’s what we learned:
More than one-third of Americans (35%) believe, incorrectly, that credit card applications are commonly rejected because someone already has too many cards.
Almost half of Americans (48%) say they would be too embarrassed to share a credit card rejection with friends and family. About one-third (34%) say people who have had a credit card application rejected are irresponsible with their finances.
More than half of Americans (51%) don’t know that credit card issuers are required to tell applicants why they were rejected.
Knowing why you’ve been rejected is an essential first step toward gaining approval for a different card. Without that information, you could end up applying for credit cards and getting turned down over and over. Each application knocks points off your credit scores — so repeated rejections move you further from approval, not closer.
Rejection happens; here’s why
More than one-third of Americans (35%) believe, incorrectly, that credit card applications are commonly rejected because the applicant already has too many cards.
Consumers get rejected for credit cards for all kinds of reasons, including having bad credit, too much outstanding debt, little or no credit history, insufficient income and past bankruptcies. When asked to identify the most common reasons that issuers reject credit card applications, many Americans were able to point to these: 80%, 67%, 57%, 46% and 44%, respectively.
But there are also misconceptions. More than one-third (35%) say that simply having too many credit cards is a common reason for rejection. One-quarter (25%) say having a previous rejection commonly causes another rejection. A small number (7%) even think applicants are commonly rejected because they aren't in a job preferred by credit card companies. Here’s a breakdown of the results:
While having too many credit cards or a previous credit card rejection could signify that your finances aren’t in good shape, they won’t directly trigger a rejection. And while credit card companies commonly look at income when deciding whether to approve you for a card and what your credit limit should be, the kind of job you do doesn’t affect whether the issuer approves or denies your application.
Americans don’t take rejection lightly
About one-third of Americans (34%) say people who have had a credit card application rejected are irresponsible with their finances. Almost half (48%) say they'd be too embarrassed to tell friends and family about a credit card rejection.
Rejections elicit strong emotions from consumers
Americans have strong feelings around credit card rejections — toward the banks that reject them, toward themselves and toward others who get rejected.
Seventy percent of Americans say they would not apply for another credit card or credit product from a bank that rejected their credit card application.
Almost 2 in 5 Americans (39%) say their opinion of the overall state of their personal finances would be affected very or somewhat negatively if they were rejected for a credit card.
About one-third of Americans (34%) agreed with the statement, “People who have had a credit card application rejected are fiscally irresponsible.”
When the survey asked people what emotions they would feel if they were rejected for a credit card, the responses included annoyance (36%), frustration (33%), embarrassment (32%), anger (19%) and sadness (15%).
Millennials seem to take rejection hard, but they’re likely to take action to fix their credit
The millennial generation, those ages 18-34, is often criticized for a perceived sense of entitlement. However, the survey found that millennials are more likely than people 45 and older to apply for a different card rather than go without a card (61% versus 51%) and to look for solutions to improve their credit as the result of a rejection (56% versus 41%).
Two in five millennials (40%) would feel negatively about the overall state of their personal finances if they were rejected for a credit card. And more millennials seemed to direct negative feelings toward their finances than toward a particular outside party such as a credit card issuer (35%), banks (34%), credit cards in general (31%) or retailers (26%). In every other age group, the opposite was true — more said they would feel negatively about an outside party than their own finances. (1)
Millennials (36%) are more likely than those ages 55 and over (25%) to apply for another credit card or credit product from the same bank that rejected their previous application.
Millennials (61%) are more likely than those ages 45 and over (51%) to apply for a different card, such as one with lesser rewards or a higher interest rate, if their application was rejected, rather than go without a card
Almost 9 in 10 millennials (88%) would take action if rejected for a credit card application. They’re more likely than those 45 and older to look for solutions to improve their credit (56% versus 41%), research their financial situation (44% versus 34%) or ask friends or family for advice (30% versus 3%) after getting a credit card rejection.
Millennials also are more likely than those 55 and older to say they would experience embarrassment (37% versus 25%) or frustration (42% versus 25%) after being rejected for a credit card. Millennials are twice as likely as those ages 65 and up to say they would feel sad (18% versus 9%, respectively). Both millennials and older baby boomers (65 and up) are more likely to feel annoyed than those ages 45-54 (38% and 40% versus 28%, respectively).
Student cards are hard to get, and students are stumped
One-third (34%) of students over 18 (2) say they would feel confused if they were rejected for a credit card — and they have good reason to be. Getting approved for a student credit card isn’t nearly as easy as it once was.
Before the Credit Card Act of 2009, college students across the U.S. could apply for credit cards on campus, often in exchange for a free pizza or Frisbee, and approval was easier. It was much easier to start building credit then, but it also allowed many young adults to get into serious credit card debt. Since the act passed, Americans under 21 aren’t likely to get approved for a credit card without a full-time income or help from someone else.
The common advice for students under 21 is to apply for a student credit card with a co-signer. However, many credit card issuers don’t accept co-signers on applications, leaving students with nothing but their student loans to get the credit history ball rolling. That said, there are some options to consider.
“The easiest way to build credit is to be added to a parent’s credit card as an authorized user, so your credit can benefit from their good money management,” says Sean McQuay, NerdWallet’s credit and banking expert. “If that’s not an option, explore opening your own student credit card or secured credit card.” Secured cards require a cash deposit but are easier to qualify for, although you’ll still need to show income.
What you can do if you’re rejected
More than half of Americans (51%) don’t know that credit card issuers are required to tell applicants why they were rejected.
More than 8 in 10 Americans (83%) say they would take action if they were rejected for a credit card. That’s great — if you know the best actions to take. Here’s what you should do if you’re denied for a credit card:
Step 1: Find out why. Legally, the credit card issuer that rejected you has to tell you why by sending you an “adverse action notice.” You’ll typically receive this via snail mail soon after you’re rejected. Knowing why you were rejected gives you an idea of what you need to do to get accepted next time. That leads you into Step 2a, Step 2b or both.
Step 2a: Check your credit reports. If you were rejected based on something in your credit reports, you should first make sure the reports are accurate. You have a right to a free copy of each of your credit reports once a year. You’re also entitled to a free copy of the report used to make the rejection decision within 60 days. Even if everything in your credit report is correct, it will show you what’s going on with your finances and give you a better idea how to improve them.
Step 2b: Double-check your application. If your rejection was based on something in your application, like insufficient income or high expenses, check your application to make sure you stated everything accurately. If you made a mistake on anything, call the issuer and let it know. It might reconsider your application.
Step 3: Ask for reconsideration. After reviewing your credit reports and/or application, if you think you were right on the cusp of having your application approved or you believe you can explain the circumstance that led to your rejection, you can ask the issuer for a second chance. Call the customer service line and plead your case. We can’t promise anything, but it should only cost you a few minutes of your time to try.
Step 4: Apply for a different card that better fits your financial profile. If all else fails, it’s time to get realistic about your financial situation. If you have no credit or bad credit, a secured card might be the way to go. If your credit is good but not great, look for a card marketed to that segment, even though the terms likely won’t be as good. Work your way up to the card of your dreams by practicing good credit habits and patience.
“Use a rejection as a reminder to improve your credit and spend a few more minutes finding a card that matches your credit profile. Every rejection hurts your credit score, to say nothing of your ego, and the right card can save you money,” McQuay says. “And don’t beat yourself up if your application isn’t approved. Excellent credit takes time, and the best thing you can do is work to build your credit and be patient.”
This survey was conducted online within the U.S. by Harris Poll on behalf of NerdWallet from Sept. 28-30, 2016, among 2,007 adults ages 18 and older. This online survey is not based on a probability sample, and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact [email protected].
 More adults ages 35-44 would feel negatively about credit card issuers (40%), banks (37%) and credit cards in general (37%) than about the overall state of their personal finances (36%). More adults ages 45-54 would feel negatively about credit card issuers (41%) and credit cards in general (37%) than about the overall state of their personal finances (36%). More adults ages 55-64 would feel negatively about credit card issuers (48%), banks (45%), credit cards in general (40%) and retailers (42%) than about the overall state of their personal finances (37%). More adults ages 65 and older would feel negatively about credit card issuers (53%), banks (51%), credit cards in general (45%) and retailers (50%) than about the overall state of their personal finances (42%).
 Our sample size for students was 86, which is lower than the recommended minimum sample of 100 for statistical analysis. Therefore, this result should be viewed as more directional or qualitative in nature.