- 1 Has Your Balance Transfer Request Been Recently Denied?
- 1.1 What You Should Know About Balance Transfers
- 1.2 How and Why a Balance Transfer Request is Denied
- 1.2.1 The credit card company rejects your application
- 1.2.2 You Have Been Approved for a New Card But the Balance Transfer is Denied
- 1.2.3 What Are My Options?
- 1.2.4 Ask for Assistance
- 1.2.5 Resubmit the Application with a Smaller Amount
- 1.2.6 Consider Debt Consolidation
- 1.2.7 Consider A No-Credit Check Personal Loan
- 1.2.8 Ask Your Issuer for a Lower Interest Rate
- 1.2.9 Improve Your Credit Score
- 1.2.10 Evaluate the Card before Applying
Has Your Balance Transfer Request Been Recently Denied?
We are in unusual and extraordinary times. A time of coronavirus, Covid-19, a global pandemic, social distancing, and…zero interest rates! The Federal Reserve has slashed interest rates to zero as part of an emergency intervention.
The world may be upside down but it does present a unique opportunity to get some debt relief if you have been denied a balance transfer request from your credit card provider. The important thing is not to become too desperate and fall for some of those “too-good-to-be-true” offers that will continually arrive in your mailbox. For years, companies like Credit9 and Americor Funding have been peddling low-interest rate offers that don’t always work out as planned.
It is much easier to pay off debt if you manage to secure a lower interest rate, usually by applying for a balance transfer with another creditor. The only problem is that you may be denied, which can be upsetting for many applicants. It is worth noting that you still have options to bounce back from this ordeal; the important thing is to look for alternatives.
This guide will help you understand some of the main reasons why your application for a balance transfer is denied.
What You Should Know About Balance Transfers
Most people seek balance transfers because their new creditor offers them introductory periods of 0% interest rates, which enables them to put their payments towards the actual principal amount owned instead of the interest charges. When searching for balance transfer options, look for a card that offers 0% interest and is fully compatible with your financial situation. The zero percent interest period usually ranges from 12 to 21 months, which is plenty of time for most people to sort out their payment issues.
It is worth noting that some creditors charge a balance transfer fee, which starts at around 3% of your total transfer. The balance transfer fee could hit you hard depending on your financial situation and may end up making things worse. Make sure to weigh the cost of balance transfer with potential interest rate savings made to see if it’s the right choice for you.
In most cases, it is easy to secure balance transfer if you have good or excellent credit above 660. This shows you are a low-risk candidate and are more likely to pay off your balance in full.
Of course, this would be of no avail to you if your balance transfer is denied. Issuers may reject balance transfer applications for many reasons.
How and Why a Balance Transfer Request is Denied
Credit card companies deny balance transfers in two different ways.
A) You can request a balance transfer on your pre-existing card but have the transfer declined, or
B) You can apply for a new balance transfer credit card only for the application to get denied.
The credit card company rejects your application
- Your credit score is not high enough. Most credit card companies will only approve an application if you have good to excellent credit score. This is how they minimize non-payment issues and maximize their ROI.
- You have demonstrated a long history of credit balancer transfers. This leaves a bad impression on your application and issuers assume you’re not serious about debt repayment. So try avoiding too many transfers in quick succession.
You Have Been Approved for a New Card But the Balance Transfer is Denied
- This commonly happens due to low credit limits. This is the maximum amount of money that can be charged to your card at any time. If your credit limit is lower than your balance transfer, then your request will most likely get rejected. In this case, you should lower the amount of balance to transfer over. This will go a long way in reducing your interest rates.
- Some balance transfer cards have a short window of time from account opening before you can request for a balance transfer. Most people have around three months to ask for a balance transfer. Try asking your credit card issuer for how long you have before you can file a balance transfer request.
- You’re trying to get a balance transfer from the same credit card company. Trying to transfer debt from your old card to a new one in with the same company will likely get rejected. Make sure to read the fine print about any restrictions on transferring balances between cards.
What Are My Options?
Even if your balance transfer is declined, all hope is not lost and there are always options available.
Ask for Assistance
Understanding your problem is half the solution and you won’t be able to address the issue unless it can be broken down into specific components. This is why you should immediately reach out to the issuer for more detailed information. Even if you’re unable to fix the outlined problem immediately, you’ll know how to avoid rejection in the future.
Resubmit the Application with a Smaller Amount
In some cases, your balance transfer credit card will get approved but the actual transfer amount may get declined due to your card limit. In this case, you can ask for a transfer request that is under your credit limit.
Consider Debt Consolidation
You can roll up all your existing debt into one lump sum package and, in some cases, you may even secure a lower interest rate. This is the next best option if your request for a balance transfer is denied. This is an effective option that works. Learn the truth about debt consolidation.
Consider A No-Credit Check Personal Loan
Getting rejected for a balance transfer may be a blessing in disguise. You may be able to find a low-interest rate no-credit-check personal loan from Hornet Partners that is right for you. Remember to avoid personal loan companies and financial advisors with bad reviews.
Ask Your Issuer for a Lower Interest Rate
You can always ask your credit card company to offer lower interest rates. They will accept your application in most cases because it increases your chances of paying off your debt. You won’t get zero interest rate but lowering your interest rate even slightly so can help you pay off your debt faster and more efficiently.
Improve Your Credit Score
Ask for a credit report and look for any errors that you can fix yourself. False information in the credit report can affect your score significantly, so even though fixing some of the issues could take time, your priority should be to improve your credit score. Make sure to check your credit score at least 3 times a year.
You can improve your credit score by making payments on time, keeping a low balance, and not applying for too many credit cards or loans in a short time.
Evaluate the Card before Applying
Before you apply for a balance transfer credit card, it is important to take time to understand the benefits of each one.
- What is the balance transfer fee?
- How much time do I have to apply for a balance transfer request?
- What is the credit limit on the card?
- What is the typical transfer limit of the card?