question about applying for a credit card...

**scramble** · 03-05-2011 09:57 AM

I tried signing up for the Amazon visa card, and my application got a rejection notification because of something like (1) my existing credit card balances are too high, and (2) too few accounts have been open for long enough. I don't remember the exact words...

My situation is that I have a credit card that I've had for 4-5 years now. Some months, my balances reach 95% of the limit, some months I spend $0. But regardless, I've never missed a payment... I have a second credit card that I opened at a clothing store (to get the initial discount) about 4 months ago... I used it when I initially opened the account, spent ~25% of the limit, paid it off immediately, and never used it again since.

Is my credit situation really "bad" that I can't get another credit request approved?? How can I improve this situation? (or is Amazon-Chase visa card really that picky??)

I guess it just doesn't make sense to me how all these credit cards have a rewards system to encourage you to spend more money... but somehow this is a bad thing when you're trying to apply for a new credit card (even if you pay everything off in time)...

**WildChild** · 03-05-2011 10:10 AM

Pay down your card balance to below 50% of your limit and keep paying it down. This may relate to your debt to income ratio. It isn't just a matter of not missing a payment, there are many factors. These days the lower you can get your debt the better.

**Seeker_Advice** · 03-05-2011 01:23 PM

WC, as she so often does, NAILED it!

There are many factors that are considered when extending credit and things have gotten A LOT tighter in the U.S. over the last couple of years.

Try not to EVER exceed 35% of your allowable limit on any one card. If you do, make ENORMOUS payments to make it up.

I would suggest establishing additional credit with a gas card like Marathon. Be careful with the charges. The ability to make minimum payments when you've piled up some debt sends the wrong message.

**scramble** · 03-05-2011 02:15 PM

Is this relevant even if I don't have any debt??

I've never paid just the "minimum payment" and I've always paid everything in full on time... argh, I did not know that credit card companies cared how much you spent, as long as you don't fail to pay on time...

So it would be better for me to open up a couple of other credit cards (ones that won't reject me) and spend only <35% in each card?? I mean, my credit limit is just $800 right now, so if banks cared about the percentage, I shouldn't use more than ~$300 on my card per month?

Well, I guess I could get away with not using a credit card at all... but then I'm not sure what the point of getting a credit card is... which then defeats the purpose of my initial inquiry anyway!

**CHANDLERS WISH** · 03-05-2011 02:54 PM

1) my existing credit card balances are too high, and (2) too few accounts have been open for long enough.

The best way for you to answer this to yourself, is what is the credit limit at present on the card, verses your income.

If the credit amount is what they feasibly think you can manage on your income, then they will be reluctant to give you more credit...

The second thing is there isn't a good enough track record as the second card has not been open long enough for them to gage your spending and payments on it....

Credit card rates are rediculous your best just having the two you have and no more....

**Seeker_Advice** · 03-05-2011 08:34 PM

I have quite a bit of credit information that you may find helpful, as I have worked in the "financial world" in various areas for about 25 years.

Instead of clogging up a thread with a bunch of data, perhaps a better way to get it to you, IF you are interested is via a PM. Unfortunately, you can't send me a PM until you've made at least 33 posts (I think that's the number) and I don't know if I will be able to respond or not since I lost my PM privileges a while back.

I think you will find the information helpful now and going forward in your life.

So hang tight until you reach at least 33 posts, then let me know.

**rcoreyus** · 03-06-2011 12:06 AM

They will look at your income vs your total credit limit. Never making a late payment is a BIG help and you have been doing that. They also want to see a longer payment history. If you have student loans out that also counts (maybe partially) against your available credit.

Its really annoying to create a good credit history. I think you are doing the right things, it just takes time.

**Cyndie32** · 03-08-2011 10:12 AM

One thing that hasn't been mentioned is getting a copy of your credit report. You may have other credit cards open out there that you just dont remember. If you have other cards open out there, even if they don't have a balance, it affects your debt to income ratio, which in turn affects your credit score. Once you get a copy of your report, read it. Study it. If you have open revolving credit on there that you no longer want, call the company and close the account.

**jns** · 03-15-2011 05:13 AM

Originally Posted by scramble

I tried signing up for the Amazon visa card, and my application got a rejection notification because of something like (1) my existing credit card balances are too high, and (2) too few accounts have been open for long enough. I don't remember the exact words...

My situation is that I have a credit card that I've had for 4-5 years now. Some months, my balances reach 95% of the limit, some months I spend $0. But regardless, I've never missed a payment... I have a second credit card that I opened at a clothing store (to get the initial discount) about 4 months ago... I used it when I initially opened the account, spent ~25% of the limit, paid it off immediately, and never used it again since.

Is my credit situation really "bad" that I can't get another credit request approved?? How can I improve this situation? (or is Amazon-Chase visa card really that picky??)

I guess it just doesn't make sense to me how all these credit cards have a rewards system to encourage you to spend more money... but somehow this is a bad thing when you're trying to apply for a new credit card (even if you pay everything off in time)...

One thing you could do is always pay say double the minimum payment. That shows that you can afford to carry a higher balance. Call your credit card company and see if you can increase your credit limit. If you can, be bold in what you ask for, you may just get it. Otherwise you may get a larger increase in limit than what you would have conservatively asked for. A higher limit will make it so you have a lower percentage of the limit used. this is a double edged sword. Do not, I repeat, do not, carry any higher balances on the card. Once you have used credit and shown that you can make large payments, credit companies will beat a path to your door. Your credit score will also go up.

**Little** · 03-15-2011 01:29 PM

Are you saying that you have a zero balance on all your cards? Because that's how I'm reading it. In that case, they shouldn't say that your balances are too high ... you HAVE no balance!
Check your credit report. There's always the chance that your identity has been stolen and somebody has cards with your information and high balances.