Credit card applicants rejected in bid to reduce debt

Credit card lenders are tightening up their application processes and reducing the number of new applicants they accept, says a new study.

Lenders have previously been criticised for encouraging consumers to apply for additional credit cards and for making it easy for people to run up huge bills under a variety of providers.

It seems that recent warnings raising awareness over the growing issue of consumer debt have caused lenders to rethink their old policies and take a more responsible stance.

Figures from the "This is Money" survey revealed that Barclaycard is currently rejecting around half of new applications, while Lloyds has also introduced stricter criteria.

Mounting bad debts are costing banks millions of pounds and the study suggests that allowing consumers to continually switch provider, to take advantage of introductory offers, was adding to the problem.

"We prefer to concentrate on franchise business where we already know the customer and they already have one of our products. With new applicants the rejection rate is currently around 50 per cent," explained a spokeswoman for Lloyds.

Policy Warehouse