Auto-Declined for St George Credit Card

JudgeRizzo on 07/03/2023 - 15:38
Last edited 07/03/2023 - 19:39 by 1 other user

Hi all, I just got auto-declined for the min-limit ($15,000) on the St George Amplify Visa Signature Card, which came as a bit of a surprise.

I've had my current credit card for about 4 years, so not in the churning game. I think I applied for one credit card probably two years ago (also auto-declined). They don't give you much information as to why, just a message saying to check my credit score online for possible reasons. My credit score is 850 on credit savvy, with no negative events ever as far as I'm aware. Does anyone have any insight on why I would get auto-declined? Perhaps expenses are a bit too high (interest rate hikes have smashed cash-flow in the last few months). Here's the details of my situation:

Income (after tax): $13,060/month) - EDIT: I had this number wrong when it was $10,060 - I had put my wife's post tax income (~1k/week) as 1k/month, so this number was low by 3k/month. It was correct in the application however.
Expenses: $8,200/month)

Assets
Property: $1,700,000
Cash: $10,000
Shares: $100,000
Super: $150,000
Other: ~$100,000 (don't remember exact values I entered, but made up of cars/boat/house contents etc)

Liabilities:
Mortgages: $900,000
Current Credit Card ($0 balance): $6000 limit (this would be closed if credit card application was successful, but I guess there's no way they know that from the application)

This is combined household income from my wife and I - the application did have a place for spousal income, and all expenses were specified as combined for the household.

1 dependent child, four years old. Once she starts school next year I'll free up $12,800/year in daycare expenses, so I guess I will try again next year. But in the meantime, if anyone in the know has any insight, I'd love to hear it!

Cheers!

EDIT: Whoops, total income is incorrect - it should be an additional 3k more a month (13k instead of 10k post income). But, I also realised I had a credit ban on all agencies ever since the Optus hack which may also be the cause of the auto-decline.

Financial Credit Card

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St.George Bank
St.George Bank

Comments

  • Muzeeb on 07/03/2023 - 15:46
    +12

    Mortgages: $900,000

    This and only $2k spare at the end of the month will make the algorithm panic these days.

    • JudgeRizzo on 07/03/2023 - 15:52

      yea that does make some sense. I wish they would just let you know where you can make changes. i've got options to increase that free cash number at the end of the month, like changing one or even both loans to interest only but I don't really want to at this stage, but hopefully ditching the 1k+/month daycare cost at the end of the year will help. if it isn't all consumed by rate rises by then haha. thanks for the response

      • Gunnar on 07/03/2023 - 16:35

        Yeah that was my first thought was your debts. The $6k limit is taken into consideration with your application. You’ve got $2k disposable BUT they need to factor increases to interest rates.

        Id hold off on another application for a while. Credit card applications (incl requests to increase your limits) hammer your credit ratings, esp if you’ve been declined. Rack up enough of them it will impact you with home loans.

      • Meho2026 on 07/03/2023 - 17:45
        +3

        You should have your investment property loan on interest only

        • JudgeRizzo on 07/03/2023 - 18:00
          -1

          yea it's on my list, but right now the interest is lower as principal+interest and the rent covers it in full, so I'm holding off a bit longer

  • MrThing on 07/03/2023 - 15:55
    +1

    st george are weird, just like citibank.

    my and my partner make the same and obviously share all expenses. but I routinely get approved and she gets declined….. no idea why

    banks will just send you to a credit report, which is useless, as you say, you have an excellent rating so its not part of the issue

  • Kaz0551 on 07/03/2023 - 16:15
    +1

    When the kids start Kindy insert throwing money meme

  • Drakesy on 07/03/2023 - 16:30
    +3

    Geezus christ.
    You're a few interest rate rises from treading water.

    I want to know which bank lets someone leverage themselves that hard.
    I was expecting something that didn't add up.

    But yeah it's kinda self explanatory.

    How does someone buy a $1.7 mill property on $170k a year?1

    • donga100 on 07/03/2023 - 16:38
      +1

      How does someone buy a $1.7 mill property on $170k a year?

      Their mortgage is only $900k so they either bought the house when it valued far lower or they contributed a large deposit, or both. They also mentioned "both loans" so I presume they have two properties and one is an investment which generates rental income.

      • JudgeRizzo on 07/03/2023 - 16:44

        Yeah this is correct, two mortgages at around 450k each left owing, with each property being worth 850k or so currently. One property is rented out at 590/week

        • trapper on 07/03/2023 - 17:45

          Does the bank know you are receiving this $590pw?

          • JudgeRizzo on 07/03/2023 - 17:46

            @trapper: yep, it is included in my income

            • spackbace on 07/03/2023 - 18:14
              +4

              @JudgeRizzo: Well put it this way, imagine if your rental property didn't have a tenant for a few weeks, even a couple of months… By your sums, you would be under water

              • JudgeRizzo on 07/03/2023 - 18:20
                +3

                @spackbace: i guess so, but there's 110k in pretty liquid assets (cash and shares) to ride it out tenantless for a good while before having to do anything drastic like selling it - around 40 months or so.

    • JudgeRizzo on 07/03/2023 - 16:51

      Yeah the interest rate hikes have been brutal - an extra 2.4k/month in interest since November or whenever the rises started. I've got a few options before things get dire with cashflow. I guess the frustrating part is I have a credit card, which has been paid in full every month for years, but I just want to take advantage and get some better reward earning potential.

      As for leverage - I wouldn't say I'm leveraged that hard? I'm at about 50% LVR or so on both mortgages … I'm sure there's people with alot more debt at 80% or higher.

      Credit cards are weird, what's another 15k credit on top of 900k, against 2mil+ of assets? Like I get it, but I'm not sure where the risk is for the bank.

      • trapper on 07/03/2023 - 17:47
        +1

        If it's the same bank then go into a branch and tell them you want to switch over to the other reward deal, this way they can just flick it over all else remaining the same and you won't need to do a new credit application etc

      • trapper on 07/03/2023 - 17:49
        +1

        Credit cards are weird, what's another 15k credit on top of 900k, against 2mil+ of assets? Like I get it, but I'm not sure where the risk is for the bank.

        The credit card debt is unsecured.

        If someone has to choose between losing their house or paying the credit card, well guess which ones not getting paid.

  • DingoBilly on 07/03/2023 - 16:32
    +1

    My own experiences are that St. George are very bizarre with their practices. They're the only bank that has declined me for a credit card (I am a credit card churner and otherwise all other major banks have accepted), and when I refinanced to them it took me 9 whole months to do so. Every other bank has been 1-2 months tops… but they had severe issues with a missing middle name on one piece of documentation which led to months of back and forth and signing affadavits and was just ridiculous.

    So I wouldn't take it too personally - just maybe stretch the truth a little in future in terms of income/credits or just avoid them altogether.

  • Godric on 07/03/2023 - 16:37

    fairly obvious why

  • try2bhelpful on 07/03/2023 - 17:15
    +5

    Wait until you retire. We own our own home, have lots of money to pay off cards but they won’t let us have one because we aren’t “employed”. It is just ridiculous.

  • brendanm on 07/03/2023 - 17:28

    Have you done it as a joint application? Or just your name on it? Pretty sure a the end of the day it's because your free cash is low, and they know most people lie about their expenses to make them lower.

  • JudgeRizzo on 07/03/2023 - 17:48

    As a bit of an experiment I recalculated my asset/liability/income/expenses as if I sold the investment property - this would leave me with 100k of debt instead of 900k, and around $400/month interest.

    Assets: $1,210,000
    Liabilities: $100,000
    Expenses: $3,376
    Income: $7,700

    Maybe this would be auto-declined, probably not - who knows. Just odd to me that this is essentially the same overall financial position, just trading out income producing assets/liabilities/expense for cash-flow and lower liability.

    • doweyy on 07/03/2023 - 18:00
      +1

      The bank generally only assesses based on free cash flow or servicability. You have $1800 free cashflow at the end of each month, the bank assumes you have $21k to pay back if you get approved (as you still have the $6k card open at the time of the application), so regardless of interest charged it would take you at least 12 months to pay back the balance from FCF alone.

      Sure, you could sell an IP and it removes all that stress, but properties are illiquid and the bank assumes that won't happen. You have shares which can pay off the balance, but they don't particularly factor this in within the algorithm either, it's more about the servicability from your overall income.

      Hence why you have been denied, unless you can improve this position practically, I would stay away from CC's for the moment.

      • JudgeRizzo on 07/03/2023 - 18:02

        thanks, i appreciate the input. that's pretty much it at the end of the day, free cash flow is king - i'll leave it another year or two and see how things look then.

      • JudgeRizzo on 07/03/2023 - 19:38
        -1

        just realised I put the incorrect income in my initial post (but it was correct on the application) - it should be $13000 post tax income vs $8200 expenses, so there is more free cashflow than initially indicated. what i also realised though was that i put a credit ban on all agencies after the Optus breach/hack, which is certainly also a good reason for an auto-decline

        • Grunntt on 08/03/2023 - 10:49
          +1

          what i also realised though was that i put a credit ban on all agencies after the Optus breach/hack, which is certainly also a good reason for an auto-decline

          I believe that you just answered your own question there.

          Did you receive any notification from the credit reporting agencies that a credit application/enquiry had been made? (I thought that was supposed to happen automatically when you place a credit ban).

  • Ghost47 on 07/03/2023 - 17:52

    With interest rates going up and a mortgage that size I’m not surprised you got knocked back.

    The bank is probably thinking by applying for a credit card you’re actually getting to the point where you need to rely on credit to pay for things.

    • JudgeRizzo on 07/03/2023 - 17:57

      right, i suppose so. although no human is looking at it, the decline is instant as soon as I hit submit. i could probably go to a st george branch, use equity to pay for a deposit on another investment property, and have them lend me hundreds of thousands - but a credit card to put my expenses through to earn some rewards and pay in full each month is a different story!

      • brendanm on 07/03/2023 - 18:06
        +3

        A house is secured credit. A credit card is not secured credit.

        • JudgeRizzo on 07/03/2023 - 18:08
          -1

          yea, fair enough. that's the distinction I was missing in my head I think. thanks

  • Typical16-bitEnjoyer on 07/03/2023 - 18:43
    -4

    IF a human is looking at your application, they're wondering why you're needing a 15k CC when you apparently have 100k of shares you could dispose of. Smells of risk.

    • JudgeRizzo on 07/03/2023 - 18:55
      +1

      i just want those sweet velocity points, 3-4k/month in non-interest expenses going through a credit card is a lot of points. my current card gives 0.66 points/$, this one is closer to 1 point per $, plus the sign up bonus of 75k points. 15k is their minimum limit, i get by fine with 6. i don't want a credit card as a loan … but as has been pointed out in other comments, it just comes down to free cash flow since a CC is for all intents and purposes an unsecured loan - assets don't matter

    • JIMB0 on 07/03/2023 - 20:29
      +1

      The bank mostly cares about whether you can service your debts and not so much why you want the money. Their maximum profit is realised when people are up to their eyeballs in debt.

    • donga100 on 07/03/2023 - 21:39

      wondering why you're needing a 15k CC when you apparently have 100k of shares you could dispose of

      So you don't need to "dispose of" your investments?

  • FrugalDealSeeker on 07/03/2023 - 18:46
    +1

    Here's something that may be relevant to you, credit savvy is the Experian score which is very lenient. Most banks use Equifax e.g. Wisr and Ratecity give you both. Experian is usually your higher score so it might be worth checking out your Equifax if it's significantly lower. There's also illion but I have heard banks don't make decisions from that anymore due to being very unfair and not implementing the CCR, regardless check that one out as well.

    • JudgeRizzo on 07/03/2023 - 19:02
      +5

      oh shit, i've had a credit ban on all providers ever since the optus hack! man I'm a dummy … i don't know if it changes anything, maybe I'll give them a call and just find out if the reason it was auto declined was that they couldn't run a credit report. but after this thread and peoples comments, I don't think it would have mattered regardless. thanks mate

      • miwahni on 07/03/2023 - 23:42
        +1

        That could account for the instant decline - if they can't run your report, they're not even going to assess the application.

        • Lunarboogie on 08/03/2023 - 06:30
          +1

          Not always true. I recently applied for a citibank card and accidentally inputtted the wrong DOB (by one day - fat fingers). To my amazement, the approval letter stated that I had been approved despite Citi not being able to obtain my credit file. They then asked me send a picture of my licence to verify my details and et voilah. The funny thing is I'd also been rejected by them for the last 4 years running and this was my last attempt before giving up (I too am after Velocity points). Some times miracles happen?

          • El-Rhi on 08/03/2023 - 06:40

            @Lunarboogie: There is a difference between a credit file ban and an incomplete match due to incorrect information.

          • miwahni on 08/03/2023 - 22:44

            @Lunarboogie: Or Equifax provided a cross reference that picked up your actual report.

      • El-Rhi on 08/03/2023 - 06:24

        This would 100% lead to an auto decline. You could take the ban off then apply again, but I wouldn’t bother as you’ve failed serviceability based on the information provided and this too would lead to an auto decline.

  • coffeeinmyveins on 08/03/2023 - 09:24

    I had zero debts/liabilities and several hundred k in cash and st george still rejecetd me from a credit card app a while ago, they are weird.

    But as for yours, like others have said you have very little cash and a large mortgage.

  • Jac33au on 08/03/2023 - 10:49

    Credit Savvy only checks Experian which is the least used. You may have an amazing score with them.
    Use finder or wemoney apps to check equifax. This is the big dog and will have everything on you.

    For example. When I purchased my home and car, the checks went on equifax and not experian. They didn't even bother reporting my application.
    The same with my ING credit card, went on equifax only. As a result my experian score is amazing! with very little activity. My equifax is still good, but much less.

    • ThisUniverse on 08/03/2023 - 12:51

      If I can find my score directly from Equifax, then is there is benefit of using Finder or Wemoney?

      • Jac33au on 09/03/2023 - 09:16
        +1

        Every month they check both ratings agencies and send me a notification of any changes. I can just see everything right there. The rating agencies are a real pain to get the info. Not simple as just opening an app and seeing everything I need.

        Yes, their goal is to sell me more credit facilities. But I just … don't get apply for them.

        There are some other functions like tracking your spending, net worth etc. I don't use any of those but I could see the value to those less financially literate.

        • ThisUniverse on 09/03/2023 - 14:27

          Thanks for the info. I have tried to register for Credit Savvy, but it says that I already have an active Experian account, so won't allow me to register.

          Regarding Finder or Wemoney, which apps would be the better option to keep track of Equifax score rating?

          • Jac33au on 10/03/2023 - 13:00
            +1

            @ThisUniverse: I tend to use wemoney the most. Found finder had too much marketing. Finder does WAY more though; you can even buy crypto with them now. If that's your thing…

  • ColtNoir on 09/03/2023 - 10:20

    I find St George is very risk averse compared to the major banks. I find their application process stupid and limiting.

    For example, where you say you have the CC. I’ve just applied through CBA for a loan and it gave me the option to say I’d close this account if approved.

    I’m in the process of getting rid of St George as my MFI as there’s too many negatives over the years.

    • JudgeRizzo on 09/03/2023 - 12:52
      +1

      right, good to know. thanks mate

  • clover on 10/03/2023 - 19:43

    I refinanced with them and asked for the credit card as part of the package. Instant approval. Got the card even before the settlement happened. I am very happy with the cashback bonus and the qantas bonus so far.

  • Benno007 on 29/03/2023 - 21:20

    I just had an issue with them too, rejected for a St George Amplify Qantas 6k limit. I have 36k in other cards total limit, a mortgage that I'm not paying interest on due to higher savings in offset, saving 2-3k/mo after all expenses and 200k+ free cash, what a blow to be denied for such a basic card lol

    • JudgeRizzo on 30/03/2023 - 13:47

      damn, that's rough. very odd

  • hawkeye93 on 01/04/2023 - 19:18

    My experience is pretty good. Applied for the Signature one ($15k limit) and got approval after 2 days. Just need to send 2 payslips. Currently have Citi Prestige, Amex Plat Charge and Latitude.

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