Can A Credit Card Company Retract Their Offer To Give You A CardJanuary 22, 2010 - 1:48 am
Credit card offers arrive in the mail all the time. Some of them look like great deals, even offering balance transfers at zero percent for six months. You decide to take one of the credit card companies up on the offer and send in your credit card application. A few days later, you get a letter saying your credit card application was denied, or that the company will offer you a card, but with a much lower limit than advertised. How could this be? It’s because a credit card company can retract their offer to give you a card.
While there are many reasons a credit card company may decline an application, certain reasons for doing so are unlawful. Creditors cannot discriminate against anyone on the basis of age, race, color, national origin, religion, sex or marital status. If you were denied or offer a lower limit, it probably has to do with a financial factor in your credit. It’s important to understand that the offers you get from credit card companies are always contingent on other factors. Check the ad again and you will notice that the limit advertised says “a limit up to”, not “limit of”. Most credit card offers reserve the right to issue a card with a higher interest rate or lower limit based on your credit score and application.
Credit card companies also look at your current level of debt, length of residency, other credit cards you already have and your monthly income before deciding on a credit limit and interest rate on a new card. If they don’t like what they see, they may even decide to deny your application, even though they made first contact in sending you the offer.
Unfortunately, credit card companies cannot accept or deny an application without running your credit report. Once they run your credit report, the inquiry already exists and cannot be taken out again. This is why the company needs your signed application before they can tell you the limit and interest rate they will set. They must have your permission before making any inquiries into your credit score that will result in a new entry in the report. The best way to handle this situation is to use the card carefully and judiciously. Never charge more than half your credit limit and pay off all but a small portion of your bill every month. After a few months, call the credit card company and ask for a credit limit increase. Once you have established yourself as a reliable borrower, it will be much easier to convince the company to increase your credit card limit.