Don't let desperation ruin your credit this Christmas
| by R. Charlton | December 10, 2008
With Christmas just around the corner this is a time of year when many people start desperately applying for credit cards. Many credit card firms find themselves inundated with applications from those looking to put the cost of Christmas on plastic.
However, this year the number of refusals is set to be higher than normal, with tight credit conditions resulting in fewer people being approved for a credit card.
You may already have a credit card that is pretty much maxed out, and you may be deciding to apply for another one to tide you over for Christmas, be it a 0% balance transfer credit card or a 0% purchase credit card.
However, your existing credit card balance is something that lenders will take into account when deciding whether to give you credit, and this - coupled with the current tight credit conditions - could lead to your application for a credit card being rejected.
If you are one of the unlucky ones who has had their application rejected you need to make sure that you do not panic and simply start making mass applications for a card with another provider.
The more you are turned down for credit the worse the state of your credit report gets, and you could find that your rating plummets to the point where you simply cannot get finance.
Instead, simply focus on repaying the debt on your existing credit cards, along with any other debts that you have, as the lower the level of your existing debt the less ammunition the credit card provider will have to turn you down when you do eventually compare credit cards to reapply.
Give it a few months before you make another application, by which time you may have cleared some of your other debt and you will not be risking further damage to your credit rating.
One industry official recently said: "If you are declined a new card, the worst thing you can do is start desperately searching around and applying to lots of different providers."
He added: "The best thing is keep making prompt payments on all your debts so you keep your credit record clean. Pay off as much debt as you can, and then wait. As long as you haven't had more than two or three refusals in the past two months it is probably OK to apply again in three to six months."
However, this year the number of refusals is set to be higher than normal, with tight credit conditions resulting in fewer people being approved for a credit card.
You may already have a credit card that is pretty much maxed out, and you may be deciding to apply for another one to tide you over for Christmas, be it a 0% balance transfer credit card or a 0% purchase credit card.
However, your existing credit card balance is something that lenders will take into account when deciding whether to give you credit, and this - coupled with the current tight credit conditions - could lead to your application for a credit card being rejected.
If you are one of the unlucky ones who has had their application rejected you need to make sure that you do not panic and simply start making mass applications for a card with another provider.
The more you are turned down for credit the worse the state of your credit report gets, and you could find that your rating plummets to the point where you simply cannot get finance.
Instead, simply focus on repaying the debt on your existing credit cards, along with any other debts that you have, as the lower the level of your existing debt the less ammunition the credit card provider will have to turn you down when you do eventually compare credit cards to reapply.
Give it a few months before you make another application, by which time you may have cleared some of your other debt and you will not be risking further damage to your credit rating.
One industry official recently said: "If you are declined a new card, the worst thing you can do is start desperately searching around and applying to lots of different providers."
He added: "The best thing is keep making prompt payments on all your debts so you keep your credit record clean. Pay off as much debt as you can, and then wait. As long as you haven't had more than two or three refusals in the past two months it is probably OK to apply again in three to six months."
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