Declined credit increase - why?

[_kab_]

Just last week I requested a credit increase for my Wizard Clear Advantage CC from $5k to $10k (in prep for an o/s trip so as to avoid fees ). It was declined.

By pure coincidence a few days later I applied for a Westpac Platinum earth CC ( to replace my current Westpac Altitude CC) which was approved with a limit >$20k.

Just struggling to understand the 2 very different outcomes

FWIW I have a small home loan with Westpac and they are aware of my good CC repayment history (balance paid in full each month) but my investment accounts are held at another bank and my salary is paid elsewhere again. All of this info was provided to both lenders (neither asked for proof). When the info given to both lenders is identical I have to wonder how one can say 'nay' and the other 'yay'? It's no real biggie other than the fact I will have to cop a few hundred dollars in fees... but I am curious

 

[oz_mark]

GE and Westpac have different sources of credits to fund your expenditure. GE is finding the going tough at the moment and there have been reports of people having their credit card limits decreased.

So, might be nothing to do with you, and everything to do with the current credit situation.

 

[borsa]

Just last week I requested a credit increase for my Wizard Clear Advantage CC from $5k to $10k (in prep for an o/s trip so as to avoid fees ). It was declined.

By pure coincidence a few days later I applied for a Westpac Platinum earth CC ( to replace my current Westpac Altitude CC) which was approved with a limit >$20k.

Just struggling to understand the 2 very different outcomes

FWIW I have a small home loan with Westpac and they are aware of my good CC repayment history (balance paid in full each month) but my investment accounts are held at another bank and my salary is paid elsewhere again. All of this info was provided to both lenders (neither asked for proof). When the info given to both lenders is identical I have to wonder how one can say 'nay' and the other 'yay'? It's no real biggie other than the fact I will have to cop a few hundred dollars in fees... but I am curious

Why not load your card with $5000 to $10000 cash before you go. If there's any left over when you come back, you can always withdraw it in cash.

 

[Nigelinoz]

Having worked in the lending department of a major bank in the past I can advise that your
application for the credit increase will have been assessed against the lending criteria for that
particular product .
The criteria used is different for each financial institution but I would think would be based on
factors such as recent payment history,purchasing profile etc.
Having said that if you have paid at least the minimum payment on time within the last six months and your employment circumstances etc have not changed I would think a call to a lending
department team leader at GE would lead to a change of heart,especially in light of the increased limit on the other card.

 

[JohnK]

Interesting points on credit limit increase. I guess it all depends on who provides the credit, how long you have been with them and your repayment history. I have a CBA Mastercard and Visa and both have very high outstanding balances.

A recent BPAY to Amex on a Thursday from CBA cheque account did not show up on the Amex account on the weekend. I needed to make a $1,000 purchase in Sydney before coming back to Brisbane and Amex were quite happy to give me a temporary credit limit increase if I could provide the receipt of the BPAY which I did not write down on Thursday.

I called CBA on Sunday morning to enquire about the BPAY. They could not help me track it and asked me to wait until Monday. I said I needed to make a purchase that day and they advised me that I have approved and available $5,000 credit limit increase offers for both of my CBA credit cards. I ended up taking a $1,000 increase on the Visa and made a new BPAY to Amex and then called Amex with the receipt number for a temporary credit limit increase and I could make the purchase.

 

[NM]

...especially in light of the increased limit on the other card.[/SIZE]

That fact may work against them. They now have a potential debt of >$20K on the new Westpac card that was not included in the original GE assessment that was declined.

 

[_kab_]

Thanks for the replies.

I have heard on the grapevine that Wizard are hard task masters when it comes to lending so perhaps I am fortunate to have the $5k limit that I do. I dunno. Nonetheless it strikes me as odd ( and ever so slightly annoying). I have to wonder how the 'average' person manages to get credit from these guys if someone with my income/assets and liabilities (or lack thereof) cannot.

Virtually no debt ($10k mortgage), income >$65k p.a, assets >$500k and a 8 year history of paying credit card balance in full at the end of every month. How is that not considered a good risk...

Hmmm. I wonder if some person in a far away land pushed the wrong button :-|
Maybe I will contact them to ask

 

[Diesellife]

Another thing to mention, some non-bank financial institutions just don't like to giving out large amount of credit. There are 2 problems which might against your limit increase (Don't know for sure as I haven't worked for GE before).

Your application is too good for them. Your income and assets are way beyond and there is no need for them to increase your limit. (It is because you paid them off in full every month, there is so little incentive for them as there are no interest involve.)

Also I believe you use this card as a backup or non primary card, so your spending habit/history does not justify the limit increase regardless your reason. There will be more regarding this but I'll keep it simple in here

Plus, you have a mortgage provider and they will assume you have one of their credit card (Under normal circumstances), GE simply cannot see where is the need to increase your limit. They kinda know whether they increase it or not, you'll have enough money to support what you need to do...Unless you are experiencing financial difficulties which in that case, they will not increase your limit anyway....

Therefore, no matter how good is your credit history etc, once the account is established, the provider is more likely to concentrate on your spending habit....

Thats why you get the Westpac card instead....good credit history and satisfy Westpac's criteria...There is nothing much you can do about it unless you want to build a very strong relationship with them?!

 

[_kab_]

Your application is too good for them. Your income and assets are way beyond and there is no need for them to increase your limit. (It is because you paid them off in full every month, there is so little incentive for them as there are no interest involve.)

Also I believe you use this card as a backup or non primary card, so your spending habit/history does not justify the limit increase regardless your reason. There will be more regarding this but I'll keep it simple in here

Plus, you have a mortgage provider and they will assume you have one of their credit card (Under normal circumstances), GE simply cannot see where is the need to increase your limit. They kinda know whether they increase it or not, you'll have enough money to support what you need to do

It probably sounds smug to say but I think that's what it may come down to
When all is said and done they're probably not making a lot of moola out of someone like me although having said that if I were to spend $10k - which is what I will be over this 4 weeks holiday - then they'd surely make something in merchant fees/surcharges or whatever they call them

I'm in 2 minds about following this up since I do have other cards to use (but they attract fees). Not sure I can stomach the aggravation after having just yesterday spent nearly 3 hours in total on the telephone with Telstra and ConnectEast respectively. Oh what joy dealing with call centres

 

[simongr]

The problem is not the merchant fees but the interest they could earn. The banks have set amounts of credit that they can advance to people so they have two options:

use $5K of their total for _kab_ and earn $50 in fees
use $5K of their total for _jack_does_not_pay_his_full_balance_ever and 18% ad infinitum...

 

[Diesellife]

The problem is not the merchant fees but the interest they could earn. The banks have set amounts of credit that they can advance to people so they have two options:

use $5K of their total for _kab_ and earn $50 in fees
use $5K of their total for _jack_does_not_pay_his_full_balance_ever and 18% ad infinitum...

Exactly... Simple calculation for profit...
For example: they increase your limit to 10k and you spend the full 10k in oversea. Lets say their merchant charge is 1% (including profit margin for O/S transaction) = $100 and knowingly it will happened once only(Because the travel arrangement).

$100 for a continue credit of $5000... thats 2%pa and technically they are losing money (Assume they get the funding @ LIBOR rate)

But anyway, you have nothing to upset about... Congratulation for your new Earth card. You are now better off with Westpac's reward and earn some real reward like QFF... who cares about GE anyway? :mrgreen:

 

[one9]

...

A recent BPAY to Amex on a Thursday from CBA cheque account did not show up on the Amex account on the weekend. I needed to make a $1,000 purchase in Sydney before coming back to Brisbane and Amex were quite happy to give me a temporary credit limit increase if I could provide the receipt of the BPAY which I did not write down on Thursday.

I called CBA on Sunday morning to enquire about the BPAY. They could not help me track it and asked me to wait until Monday. I said I needed to make a purchase that day and they advised me that I have approved and available $5,000 credit limit increase offers for both of my CBA credit cards. I ended up taking a $1,000 increase on the Visa and made a new BPAY to Amex and then called Amex with the receipt number for a temporary credit limit increase and I could make the purchase.

How do you know that Amex would not have approved your $1000 purchase anyway? I always pay by credit card statement in full each month, but on some months I find myself exceeding my credit limit. I have been more than $7000 over my credit limit before the card was declined. Most card issuers (where you have a medium - high credit limit) allow a certain buffer and let you exceed your credit limit by a certain amount. As long as you don't exceed the limit when your statement is issued, then I see it as no problem as you are only charged a fee if you exceed your limit when your statement is issued.

 

[JohnK]

How do you know that Amex would not have approved your $1000 purchase anyway?

I was not willing to drive from Belmore all the way out to Penrith and back just to find out whether Amex would approve a $1,000 transaction that would take me $1,000 over my credit limit.

 

[Holly]

I received a credit increase invite in the mail from Citibank yesterday which came out of the blue and I won’t be taking up. It was to take my limit up by another $4,000, with the option for some sort of progressive increase as Citibank deems appropriate for an amount which is 3 times what my current limit is! I always pay my statements in full, so not exactly sure what the rationale may be from Citibank’s point of view in extending my limit by so much….

 

[PLANT]

Look basically you need to blow your own trumpet!
I have rolled through 7 cards in the last year and each time got the credit limit increased from what was offered...HOW?

Get on the phone speak to credit card department.
Tell them you want it increased and don't accept any excuses they give you.
Then request to speak to manager/supervisor.
Always request $5000 more than you want to bargin down.
Be creative and say that you are prepared to lower limit on other cards.
If they ask what you want for tell them its for a PLASMA or some expensive "item."

Let me know how you go!

 

[Diesellife]

Look basically you need to blow your own trumpet!
I have rolled through 7 cards in the last year and each time got the credit limit increased from what was offered...HOW?

Get on the phone speak to credit card department.
Tell them you want it increased and don't accept any excuses they give you.
Then request to speak to manager/supervisor.
Always request $5000 more than you want to bargin down.
Be creative and say that you are prepared to lower limit on other cards.
If they ask what you want for tell them its for a PLASMA or some expensive "item."

Let me know how you go!

This may be the case last year but lending criteria have changed dramatically.... I wonder if this is still the case... Plant, if you succeeded again, please let me know and I will try to get my limit to 6 digi.:shock:

 

[simongr]

Or get a charge card with no limt

 

[Nigelinoz]

If they ask what you want for tell them its for a PLASMA or some expensive "item."

If you try this while on the phone to GE Money the response you are likely to get is that they will try and sign you up for a "No Interest,No Payments for 18 Months" deal and send you down to someone like Harvey Norman.
That's the market where GE makes a lot of it's money-from the high interest they charge to people who don't make the payments on time after the interest free period.I believe the current interest rate is something like 29.5% pa.

 

[munitalP]

I recently applied for a personal diners and was declined :shock:

I have an A1 credit rating (recently checked)
Earn a reasonable 6 figures, >150K
Own presently about 40% of my house
Have had a personal liability company diners in the past
A few debts totalling 35K

Mrs! salary takes us well over 200K

I was shocked - I also got no answer from diners as to why the decline...

Mr!

:shock::shock::shock:

 

[NM]

I was shocked - I also got no answer from diners as to why the decline...

And now you find your previous good credit record is blemished with a credit application refusal :evil:.