Credit Card Application: DECLINED

Sep 4, 2016

If you would prefer to listen to me read this blog post, please click on the play button.

When I pushed the “publish” button on my June 19th post about getting a new credit card I then had nothing to do but wait for my shiny new rewards packed card to arrive. At the time we had started planning a trip overseas so I was looking forward to booking flights etc on my new card and gaining some cash back rewards. AKA FREE DOSH!

But it did not quite work out that way...

This is an update on the very long and ultimately fruitless journey I have been on to get a new credit card. 

But there is a happy ending for at least one of my subscribers. Yay!

OK. You may recall I had decided upon a BNZ card after some extensive research. I believed they were offering the best reward scheme on the market at the time. Over the phone they had also agreed to waive the annual fee of $155. I was all good to proceed.

I did go down to my local BNZ branch on a very cold day and sat in the very warm office of a gentleman who declared himself to be ‘MY’ Banking Advisor. He advised me that when I provided the appropriate paperwork we would be good to go. Too easy!

As an excellent salesman he obviously then went away and had a think and sent me the following (poorly written) email:

If you were to bring your transactional banking to bnz along with your credit card we would be able to look at waiving your annual credit card fee but unfortunately if that credit card was going to be the only business you brought to bnz we would be unable to do so.

Oh, OK, so the deal is effectively off from my point of view. I’ve got no intention of changing my other banking and to be quite frank that email surely didn’t entice me to either. That is the worst sales pitch I have ever seen! Plus, he had been gazumped by the very friendly and helpful lady on the phone who had already said the fee would be waived...

So back to the phones I went. Once again I was assured that they would waive the fee. So, online I jumped and completed the application process there, instead of another trip out in the cold to the bank.

A week later I received a letter “regretting to advise” me that my application was unsuccessful. What, pardon, do I hear you correctly?

Back on the phones again to speak to a number of Banking Advisors who were “terribly sorry” but their online banking application failed to take “my financials” into consideration. Of course it didn’t. I thought at the time that their online application never asked enough questions.

“Fear not” they said! All I will have to do is go into a branch with some supporting documents (bank statements for three months, identification etc) and they will sort it out for me there. To be honest I was getting a bit bored of all this by now (each person I emailed or spoke to, although friendly, had no record of what the other had said) but I dutifully got everything together and as I was in a bigger city that week I visited a Banking Advisor there. Oh, and for my pain and suffering because this was taking far too long they would like to offer me two years of the annual fee for free. After me pointing out that my pain is greater than what they could possibly realise we finished the conversation with three years of fees waived. Nice.

My lack of an income due to my current early retirement then became an issue. I have not worked since March now because I’m spending time with my Mum and Dad who are both very ill.

“With no income, how could I repay the card?” was their question.

Fair point I guess, so we chose instead to use Mr Saver as the primary person on the card. But his income is TOO LOW for them to issue a card apparently.

The fact we have been paying off a credit card in full for fifteen years now with variable income, kept low balances, avoided other debt and we have money invested had precisely ZERO bearing on our application being accepted.

So, by now I had already reached the conclusion that my Great Credit Card Hunt would end without a favourable outcome but I was still interested enough to see how it would all pan out. Finally in late August I receive the following (poorly written) email:

After Long discussion with our credit Op’s team they will not approv this as per income and service ability.

I Explained your high investment yield they stated I would need proof of this. I am happy to explain this over the phone how our affordability calculator works.

So there you have it. They turned me down for a good reason: not enough income. And I have to admit that it looks fair on the face of it.

Having already showed them three months worth of bank statements which is a very private thing to be flashing about, I’m not prepared to also gather together every private detail of our investments. I just felt I had had enough by now and the rewards I was chasing were just not worth it. Almost three months into my application I have lost count how many phone calls and emails have taken place. So, I have ended my application.

Am I embarrassed to be DENIED a credit card? Nope, not in the least!

It took ages to get declined but it was a very interesting exercise none the less and it cemented for me that we are on the right path to Financial Freedom.

Put simply, banks make money on credit cards from the users who don’t pay their card off. As I was quite blatant about not taking our banking to them and also our intention to pay a card off monthly and collect rewards instead, we were probably never their target customer.

When you work in sales you often have A, B and C clients. You give the majority of your time to the A’s and barely keep in touch with the C’s; but there is the hope that one day you may make money out of them. I think I would be referred to as a D client!

Had I moved all my banking to them would they have issued a card? Possibly.

If I had a mortgage that I was paying down, would that have made a difference because they could see my income paying it off - even if having a credit card would have placed greater financial strain on me? Definitely.

If we both had higher incomes would they have given us a card. Probably.

This has also sent me on an interesting side journey of working out my “credit worthiness”. If you read any American blog they regularly mention their “Credit Score”. Indeed they advise that you do get things on HP to build up a good credit score. I am still looking into what information New Zealand gathers in relation to my financial reliability.

At the end of the day I’m not bothered in the least. I still have a credit card with another bank and I just had a peek. There are $150 of rewards sitting there waiting for me…

I feel freedom in taking or leaving what the BNZ will or will not offer me. For me, Financial Freedom is not being beholden to the decisions of others. The day we cleared our mortgage the bank could no longer tell me what to do. I don’t want this post to read as being mean to banks, indeed we NEED banks but I just don’t believe the marketing hype that they have my best interests at heart is all.

The point of this blog is to research things I find interesting in the hope that others find use with the information I gather. So, to finish off I said there was a bright side...

A Happy Saver subscriber let me know that she signed up for a new card and by asking the right questions… the annual fee was waived. Thats a great result and all she said she needed to do was ask for it! GO YOU GOOD THING!

Happy Saving!

Ruth

P.S. In case you missed it: I receive no financial gain by mentioning BNZ!

Since writing this blog post I have heard from Zan. He has created a New Zealand credit card comparison website that he thought you and I might find useful. When I wrote this posts I was unaware of this site but having now looked through it, I found it is pretty good. If you are on the hunt for a card go and check it out: www.creditcardscompare.co.nz