Credit card rejections high

Lending companies declined credit card applications for up to 2.8 million people last year, say experts.

As lenders recoil from increasing amounts of bad debt, research by MoneyExpert.com reveals that 15,500 applications are being turned down every day.

Barclaycard, Britain’s largest credit card provider, felt the effect of higher interest rates as the bank lost £1.5 billion to bad debt last year.

Sean Gardner, chief executive of MoneyExpert.com, said: "Credit card companies have been badly burnt with bad debts and are putting the shutters up in response by turning down more and more applications…

"Rising interest rates mean it is harder to service debts and people should not be encouraged to get deeper into debt."

He added that it was sensible for banks to avoid extending credit to people who were already having problems repaying.

The highest rejection rates were felt by the 25 to 34 age group, who were turned down 11 per cent of the time. Among 18-to-24s eight per cent had their applications declined.

Londoners are also more likely to be declined; whereas the average rate of rejection for the rest of Britain is 6 percent, in the capital it is 8 per cent.