Rejection is never fun. However, you may still have a chance to reverse a credit card denial.
Before you act, it is important to understand why you were denied, and how you can find out more information from your credit card company, so you can formulate the best response and course of action. Follow these tips to get the best chance of overturning a denial.
Our guide will help you understand what you can do if you are denied a small business credit card.
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Reasons Credit Card Companies Turn Down Applicants
Small business credit card applications may be turned down for a wide range of reasons. It can be something as simple as a phone number not matching your credit report, or the issue may be more complex. Don’t give up hope right away.
Even if you don’t get instant approval, you could still get the card in the mail. If you get a denial letter, read it to find out what happened—and if you have any opportunities to still get approved.
If you get rejection due to a problem with your application, you are still in a good position to get the card. When you have a problem of this sort, you’ll generally get a letter from the credit card company explaining what’s going on. If you can resolve any outstanding issues, you may still get approved.
Call the bank at the number on the letter to speak with someone. Ask what you can do to resolve any complications. It may take a little leg work on your part to fix everything. In some cases, you may have to work with a credit reporting bureau (Equifax, Experian, TransUnion) if something doesn’t match.
Banks and other credit card issuers can be conservative when handing out credit lines. If you were giving people the ability to spend money, you would be careful, too. But again, you may have an opportunity to overturn a denial.
Sometimes it just takes a call to the bank and a review of your business finances. If your business is struggling for revenue and profits, you may be stuck without the card for now. But if you can make the case to a credit analyst that your income is enough to support a credit card, it may still arrive in the mail.
Negative marks on your credit report are often challenging to overcome. A history of late payments does more than hurt your personal credit prospects. Lenders look at your personal credit when approving business applications, too.
But before you give up hope, it may still be worth a call to the bank. A study by the FTC found that 25% of consumers have an error on their credit report that could impact their credit score—and 5% have an error that could lead to a credit rejection or less favorable rates.
Calling the Business Credit Card Reconsideration Line
Every major credit card company has a phone number you can call to dispute or discuss a rejected application. If you get a rejection by mail, a number to call is often included. An online rejection may also lead to a phone number for more information. This is not something you can resolve by email or online.
If you don’t see a number, don’t panic. A quick online search for “credit card reconsideration line” should bring you to the latest number. The phone numbers change regularly, and credit card companies don’t publicize them. Sometimes it takes a few tries to get a working number.
In some cases, there is nothing you can do. For example, Chase is known to have a hard “5/24 rule” on some cards. For the cards where this rule is enforced, you may not be approved for any new cards from Chase if you have opened five new credit cards in the last 24 months from any bank. Even so, it’s worth a try.
Business credit cards and personal credit cards have different numbers, even from the same bank, so make sure to call the right place. For example, PNC customer service offers different toll-free numbers for its business credit cards and personal credit cards. The analyst on the other end of the line isn’t a typical bank teller either. This person usually has the power to approve your application.
Proving Your Business is Creditworthy
Take some time to prepare before calling the reconsideration line. You may need some business and personal financial information for successful approval. Gather profit-and-loss statements for the last few years if you have them.
The main goal of the call is to prove to the analyst that your business is a low risk. The bank’s goal is to avoid lending to people who won’t pay them back. Using your finances and credit, you may have to explain how you can afford to pay off a credit card balance.
If your business makes just $500 per year, it is unreasonable to think that a bank will offer you a $10,000 credit limit. But there may be a way to make it work. Explain that you are flexible and want to be helpful in any way you can to get the card approved.
Transferring Credit from Another Card
If you are looking to get a new card from a bank where you already have a deep relationship, you may have another trick up your sleeve. If the credit card company won’t offer you any new credit, you may be able to take it from another account.
For example, let’s say you have a small business card with American Express that has a $20,000 limit. If you apply for a new card, Amex may not want to give you another $20,000. Instead, it might be willing to give you a card with a $10,000 limit—but you have to reduce your other limit to $10,000. That gives you the same $20,000 limit.
Computer approval systems may not have this option programmed in, so it takes a call to the reconsideration line to implement something like this.
Note: Do the reverse when closing a credit card. If you have multiple accounts at the same bank and want to close one, move over as much credit as possible to the account you plan to keep. This helps preserve your open credit access. It can also boost the credit utilization portion of your credit score.
Asking Nicely Goes a Long Way
If you do find yourself denied for a credit card, don’t take it personally. In many cases, the decision was automated and made by a computer. Your call to the reconsideration line may be the one chance to overturn a negative decision.
Credit analysts get calls from people like you all day, so it can help to be extra friendly on the phone. Following the Golden Rule can pay huge dividends. It might lead to that small business credit card you really want, so don’t be too pushy or demanding. Answer any questions and stay on your most polite behavior.
You may not be able to get every denial overturned, but it is worth a phone call and a few minutes of work to find out. Whether you are looking to land a big sign-up bonus, earn rewards for regular spending, or enjoy other benefits from the card, take the time to appeal. You might find it was just a simple question or two holding things up. If you can prove you are a good credit risk, that new card should on its way soon.
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