What Causes Credit Card Applications to Be Rejected (0 Credit History) ?

So I've had a read online on google on what are common cases credit cards will be rejected but I couldn't find anything specific to a brand new credit card applicant with 0 credit history.

I saw the deal for the ANZ Black Frequent Flyer credit card and applied but was told it was rejected but that they could offer the base frequent flyer card.
I ended up accepting it and meeting the minimum spend in a week.

When thinking about it, there's only four reasons a brand new credit card application on someone with no credit card history could be rejected (feel free to add if i'm missing).

  1. Not enough credit history (0 to be specific)
  2. Not high enough income ($100k~ Salary after tax and $40K~ p/a in side gigs and more in capital gains)
  3. Too high expenditure (from memory, $40-50K expenditure including rent)
  4. Too low expenditure (e.g. not enough expenditure to warrant a higher tier card?)

Would anyone here be able to provide some insight onto which it could be?

I've applied again with Qantas for their 120K point spend but with a lower expenditure ($10-20K) as I would no longer be renting as i'm planning on buying a residential property.

Also, does paying for goods/services on Paypal constitute as eligible spend?
Would it not be possible to send money back and forth between two accounts or a friend to meet the eligible spend if this is the case (of course there is a transaction fee).

Comments

  • If you had no prior credit history then you have no record of obtaining credit and showing you can pay it off, so some companies are wary on offering high value credit to newcomers.

    It's the equivalent of lending a friend $100 knowing he'll pay you back because the last time he asked for some he did pay it back and me, complete random, asking you for $100 and saying I promise I'll pay you back sometime…

    • This makes sense to me although I wanted to check if this was the only possibility as I've had friends with 0 credit history who've applied for the same credit card be approved.

      • +2

        It's certainly not the only factor though a major one. Stability in job or residence for a number of years instead of hopping around is also another. I'm sure there's a categorisation for companies you work for as well with some seen as less risk etc. Ultimately, credit lenders assess their perception of your risk profile.

        • Stability in job or residence for a number of years

          Exactly what I was going to say. Employment & rental history are big ones.

          • @desert eagle: I've just recently moved out of my first job to a new role (less than one month ago) and I was in my first full time job for 2 years.

            In comparison to my friend, she has been working part time with a quarter my income for a year and a half and was approved for the card.

            No rental history.

            • +1

              @Jamesrulez1:

              I've just recently moved out of my first job to a new role (less than one month ago) and I was in my first full time job for 2 years.

              This is the problem, you are still in probation at your new job.

            • @Jamesrulez1: Thats definitely it. Brand new job.

  • Also, does paying for goods/services on Paypal constitute as eligible spend?

    I've always found paying for goods/services with Paypal to count towards eligible spend (if linked to your card, obviously).

    Would it not be possible to send money back and forth between two accounts or a friend to meet the eligible spend if this is the case (of course there is a transaction fee).

    I originally wondered the same thing, but Paypal charges you 2.6% + 30c to transfer money to friends if funded by credit/debit card, so not sure that it works out worth it for the points.

    • Thanks for confirming. I was planning on buying stuff from friends / online groups that would involve paypal payments. I don't mind the fee as this spend would contribute to my minimum monthly spend requirements.

      Still doing some research into whether or not I can pay for rent with my credit card (direct debit is BSB / Acc number or a Bpay payment).

      • Search EasyBillPay

        • Thank you! This looks exactly like what I need. Do you use it? Have you had any issues?

  • I ended up accepting it and meeting the minimum spend in a week.

    Would it not be possible to send money back and forth between two accounts or a friend to meet the eligible spend if this is the case (of course there is a transaction fee).

    What is the point of any of this?
    You don't need to to prove your worthiness as someone who spends a lot of money. I don't think I've ever come close to maxing out a card, always opted for minimum credit, and still get offered to increase my limit more than I'd like.
    And for a while had the Westpac Black card (not sure if it's equivalent to the ANZ), with way less earnings and expenditure than you. But had the same job for a few years, so earnings were steady.

    Just wait out your probation and they'll start throwing cards at you

    • Yea it could very likely be due to probation. I should've thought of this before I left my other job. I left credit card too late as I'm travelling a lot for my new job and it would've been nice to get a few extra points.

  • Would be interested to know how your qantas application go

    • +1

      Was approved for the platinum FF.

      Hoping to move to titanium in a few years.

  • +1

    Your credit file is probably marked with red flags. Talk to a credit repair agency to get help fixing it.

    • How is this possible with 0 credit history?