Ever been hounded by a credit card sales person? He assures you that the sole criteria to qualify for a card is to pass the minimum income criteria test. And then he will dutifully sit by your side and help you fill out the form. Which you prompty do.
A week or two later, reality hits. You get rejected. The reason: none listed. But the reject letter comfortingly assures you that non-approval of a credit card is by no means a reflection of your credit standing.
Credit card issuers may be eager to grab a slice of the big market. But, mind you, they can be extremely discriminating. And dont for one single moment ever be under the assumption that earning the specified income will guarantee you a card. There are a host of other factors at play.
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Income: You can forget about a card if you do not even cross this threshold. Only after this factor is taken care of, can you think of proceeding to the next. The income specifed includes salary, business earnings and income from other sources. The amount will not only vary between banks but is also dependent on the card that you opt for.
While this is the minimum criterion, it certainly is not the sole one. Bank officials may have absolutely no qualms about specifying the qualifying annual income to get a card, but they tend to be discreetly mum on the other factors.
Residence: Amazingly, residence is the next most important criteria. Is your apartment an ownership one? Great. Staying in a rental place is not taboo but may not be taken well either. Youre one up if it is a cottage or a bungalow. Admit that you are residing in a one-room or a chawl system and you may as well forget that you even took the trouble of applying for a card.
Take Santoshs case (all applicant names in this article have been changed on request). He and another colleague applied for a card from a foreign bank. Both working for the same company and displaying identical salary slips. While his colleague got the card, Santosh did not. And according to the sympathetic sales person it was probably because he lives in a chawl. His colleague was lucky. He resides with his parents in an ownership flat.
Liabilities: However, a bank official, speaking on condition of anonymity with a foreign bank says that it is wrong to pass such a statement as that is not the only factor taken into account. And what are the others? Does the applicant have any dependents? A wife, parents and a child to support? If that is the case then you should be earning a great sum to net a credit card.
And what are your liabilities? You are paying off your housing loan, an automobile loan and a consumer loan? That should get them to take a second look at your earnings.
Malini also got rejected but for a different reason. This time she was told by the sales person that it was probably in the area where she resided (Sahar, Mumbai). Certain areas are declared as danger zones. Tough luck if thats what you call home.
However, the bank official claims that this criteria is not so prominent in Mumbai where housing is such a hazard and people are lucky enough to have a roof above their head. Pretty contradictory to what the sales person revealed when he named Dharavi and Mohammad Ali Road as two examples of localities in Mumbai being blacklisted.
Company: So much for your address. Now lets move on to your company. You will have to state whether it is a public sector, public limited, private limited, a proprietorship or partnership. The more reputable the better. And have you been here long? Good for you, if you have. It shows that you have some stability and are not fond of job hopping. What is your designation? The logic probably is the more senior you are, the more chance of your reputation being at stake, so less chance of default.
Malini recollects how she lied in her application after she was rejected by Citibank as well as Standard Chartered Bank. Stating the truth did not get her the card so she changed tack.
In the application form she stated that she had been employed with the company for around two years, in reality it was just two months. And, yes, the car was her own. Here again she did not reveal that the company had provided her with the Maruti Esteem and the petrol bill was not hers to foot. She got the card, a Stanchart Gold, within 12 days.
Verification: That brings us to another factor. How come the bank did not verify? They did. But they did so with her. Someone rang up my office to check if I was employed with the firm and for how long, she says. But since they did the mistake asking for me and then double checking with me I played along.
And yes they did drop by her office. But being totally overwhelmed by the secretary ushering him in and the plush cabin that Malini occupied was all the proof required. This time too, no verification was done with anyone else in the office.
The only difference between the earlier application and the latter one was in the number of years I put in at this firm and the fact that I have my own car. This could have probably offbalanced the fact that I live in Sahar, if that was the reason for the reject in the first place, concludes Malini.
Santosh did not have such an easy time with the sales person. They rang up the accountant and the receptionist at my office to double check on me. That was alright. But they did so at least twice or thrice. And then they rang up my place at least four times, always in the afternoon, before paying a visit.
Gillian Monterio, on the other hand, says that when a sales person dropped by Deutsche Bank where she works and offered the Stanchart card, she got it with absolutely no double checking or clarifying. Looks like they work on an ad-hoc basis.
So non-approval of a credit card application is probably not a reflection of your credit standing. Perfect discretion on part of the bank. After all, it would not be business etiquette to state that they did not fancy your address, or the fact that you have too many liabilities and quite a few dependants. Whats the point of a card when you wont have the money to spend on it or worse still make payments on the card and then default.
A message for you though. Try not to lose your temper with the salesperson. The more approved applications to his name, the better for him. So he probably wants you to have the card just as much as you do.