[Personal Share] - Beware, unwarranted credit card rejection can hurt your credit rating

I recently applied for the Qantas Premier Platinum Mastercard with its 120,000 point offer - and was rejected without any explanation.
My annual income is 6 times the credit limit applied for.
My assets are 100 times the credit limit applied for.
My total debt is incurred on 2 existing cards and typically about 1/10 of the credit limit applied for.
I have never been unemployed - I have been in my present position for 7 years and previously ran my own business for over 35 years.
According to Credit Savvy my “Repayments on time” are 100% and my “Negative Events” are zero.
I’m a lifetime member of Qantas Club.
After 2 months of emails and in the end a snail mail letter to Citibank all have all been ignored and they have refused to answer.
Now I fully appreciate Citibank’s right not to give credit to whomever they like, and obviously I don’t “need” the card, and I would have let it rest there EXCEPT Citibank’s rejection has lowered by Credit Rating on Credit Savvy from 842 to 789 without any justification and that is unfair.
So before you apply with Citibank be prepared for the consequences.
So now I’m off to lodge a complaint with Australian Financial Complaints Authority and/or the Office of the Australian Information Commissioner.

Citi has been known for being very fickle with credit applications. Some people with excellent financial circumstances (not dissimilar to yourself) have been rejected. I have heard that sometimes you need to make yourself look like you are struggling financially to get approved (e.g. a friend increased his expenses and asked for a second consideration).

I have also heard rumours that you will be rejected regardless if you have a previous Citi (managed) application 5-9 mths ago.

As always, we can only guess/speculate how they decide when to approve or reject applicants. Take your business elsewhere, I guess.

Hi @TrevorJohn

I’m really sorry to hear about what’s happened. I know from experience that it’s always deflating and even a little bit demeaning to have a card application rejected. I have two thoughts, and please don’t take any of what follows as criticism – I’m writing to help you to understand (my take on) the system a bit better, so that your next application will be successful.

First, I’m afraid to say that “my annual income is 6 times the credit limit applied for” is less impressive than it sounds, especially given that you already have another 2 cards. Banks look not just at actual debt but also potential debt. So let’s say someone has an annual income of $100,000, and two credit cards already with combined credit limits of $40,000. If that person applied for a third card with a credit limit of one sixth their income, (around $17,000), what the banks would look at is the fact that that person would have the potential to get a personal credit card debt of $57,000 at the drop of a hat. They wouldn’t care about the fact that the current debt is way less than that. They’d look at potential debt, and it would be a highly irresponsible lender that approved a credit card under those circumstances. In fact APRA would potentially get such a lender into a lot of trouble if it did approve a card in those circumstances. I’d be very surprised if your complaint to AFCA is anything other than a waste of time.

Second, my experience of using the “churn and burn” credit card method is that it’s always best to apply for the absolute minimum credit limit that the card permits. Applying for the minimum limit both maximises your chance of success, and minimises the hit on your credit rating. Since I’ve started asking for the minimum credit limits, I’ve never had an application rejected.

This, of course, doesn’t give Citi any excuses for their very poor (lack of) communication with you. Citi are notoriously bad at customer service.

But my advice going forward would be to drastically reduce the credit limits on your existing 2 cards (it doesn’t look like you need them), wait six months or so, and then (if you’re inclined) apply for the card again with a lower limit.

I hope this helps you to understand things a bit better – I’m no expert but I’ve spent a lot of time trying to understand credit card companies in order to maximise my chance of applications being successful.

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I can confirm from a similar issue it is purely Citibank related.

If you apply for a Citibank card (or Citibank backed card eg Virgin Money, Qantas, BOQ to name a few) within three months of a prior application with Citibank or its backed cards you will be auto declined regardless of the strength of your application. It will also then reset the time period you need to wait for another 3 months from the unsuccessful application that is auti declined.

I experienced this quite recently however i took my objections to the complaints team of Citibank and was lucky enough to have it over turned and my new application progressed.

Citibank is without any question the worst. Like others who churn many, many cards, I’ll be approved for some of Citibank’s cards (eg. Qantas Premier Platinum which I’ve had a number of times) but then whenever I apply for another of Citibank’s cards (Velocity Flyer) I constantly get declined. Despite waiting out the theorised “3 month” period between applications it can make no difference. As hard as it is to swallow, probably the best advice is take it on the chin when you get declined. Whether you get accepted/declined is often literally in the lap of the gods when it comes these overseas departments that decide these things and you’re only going to stress yourself trying to get anywhere if they decline you. Just move on and try and learn from why you think they declined you (like sixtyeight’s advice). It sometimes takes thinking outside the box as to why (and then sometimes there’s no logic at all). Good luck.:grinning:

I have heard some where that it is best to wait 5-9 mths between Citi processed applications. I am waiting 9 mths just to give me a better chance of approval. The signup bonuses are very tempting but I am trying hard to ignore them.

Thanks all for your advice.

I saw the NAB Qantas Rewards Signature Card offer with 120,000 points so I reduced my Westpac credit card limit by $25k and applied to NAB.

I didn’t apply for a specific limit, just ticked the box that asked if I wanted to receive the largest credit limit that they could offer.

A few days later I received the approval - $25k higher than I had asked for at Citibank. No checking up with my Accountant on my financial status. No 3rd degree.

NAB 10/10 Citibank 0/10

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The only thing that has been hurt is your ego. this ‘rating’ on Credit Savvy is complete and utter nonsense and means nothing to nobody excepy you. Credit Savvy is a marketing company, they exist to push advertising for finance to its viewers. There are no consequences to you for this change to the score credit savvy give you - and they dont even know your application was declined, so how can it even be a thing that it hurt you.

Lenders do their own credit assessment on your loan applications, using all of the data, not the patheticly tiny amount Credit Savvy gets its hands on.

no lender has any obligation to lend you money, nor to tell you why they rejected it