The barriers to switching to a new credit card

Credit cardFinding a new credit card is just half the battle. Now you have to make sure you'll actually be accepted for it!

It's not too hard to find a good credit card as new deals emerge all the time.
Barclaycard and MBNA cut their balance transfer fees this summer, ASDA launched a cashback card last week and Santander's 123 credit card now pays cashback at bars and restaurants.

You're ready for a change, but is it that easy? Here we take a look at some of the common barriers to switching credit cards.

Your current balance is too big to transfer
Switching cards is a good way to limit the cost of borrowing if you're paying interest on outstanding balances. And there are some great deals around.

For example, Barclaycard is offering half-price balance transfer fees on its Platinum Visa card, with a 0% interest rate for up to 22 months as well as three months interest-free on purchases.

But a new lender's credit limit could be smaller than the debt you want to transfer from your old card. If you want to shift £1,500 and the new provider offers a limit of only £1,200, you're stuck with a £300 surplus.

If this happens, 'do an Oliver Twist' and try asking for more. If they say no, move the maximum that you can – at least you get 0% interest on a portion of your debt, which is better than paying a higher rate on the full amount.

Halifax MasterCard offers 0% interest on balance transfers for up to 22 months with a 3.5% fee, with no cap on balance transfers subject to status. However, with this card you could trip up at the next hurdle . . .

You don't earn enough
Some credit cards come with a minimum income requirement.

It may sound fair enough, but there are still borrowers who want cards and who can repay debt with a modest or even no salary. For example, stay-at-home parents whose partners earn enough for the household or a worker on a small salary, but who is only looking for a small credit limit.

The minimum annual salary for the Tesco Clubcard Credit Card must reach £5,000, while you need an income of at least £20,000 for the Halifax MasterCard. Many providers don't stipulate minimum income requirements but check before you apply.

You have a poor credit history
Missed payments, too much outstanding debt or even a partner with a poor record of handling money can all affect a person's credit rating. This in turn affects your eligibility for the best cards and the best rates.

Applying for lots of deals in the hope that one provider will cave only serves to damage your credit rating further. It might look like you're in the midst of a desperate scramble for credit and this could put the lender off.

Apply for a card you think you would be approved for. Find further help in how to build an excellent credit history.

The banks can afford to be picky
Even if your credit history is good or excellent, it doesn't mean the bank has to offer you anything. You will be judged against the bank's own lending criteria as well as your credit rating.

If a particular offer has proven popular, the bank can also afford to turn you away or give you a poorer rate.

You're not an existing customer (or you are)
Some credit cards are reserved for existing customers only, while some providers won't let you switch if you have a card from a company within the same group.

HSBC's Visa card offers 0% on balance transfers for 23 months – currently the longest period for any card on the market – and 0% interest on anything you buy for three months. However, it's exclusive to the bank's current account customers.

The same goes for Nationwide's Select Credit Card, which has 0% on balance transfers for 20 months and 0% on purchases for 12 months. To qualify you will need a FlexAccount into which you pay £750 a month.

On the other hand, you won't be accepted for MBNA's Europe Bank Fluid Card Visa - with 0% on balance transfers for 15 months and 0% on purchases for five months - if you already have a card with Virgin, BMI or another company within the group.

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