Bank of America & Barclays Tighten Up On Business Credit Card Applications
Recent data is building a bigger picture that banks are tightening up on business credit card applications. Approvals are much less automatic these days. Given the economic downturn many are facing and uncertainty banks are facing, they’re not so willing to give out credit. Here are 2 experiences my wife had this past week that help build the picture of what’s happening with banks regarding business credit card applications.
Quick Summary of Where We Stand
In April, we reported that Chase tightened up on business credit card applications. Most of this is related to sole proprietor businesses, however. Additionally, many of those who were rejected also had no deposit accounts with Chase (savings, checking, CDs, etc.), so Chase seemed wary of extending credit to people with nothing the bank could grab onto for repayment.
We assumed that, given uncertain economic situations, other banks would extend less credit going forward. Shawn even had his credit limits cut by Chase last week. Banks also close unused cards to avoid risks, and right now is a prime time for this to happen. All of this points to a picture of banks taking less risks right now.
My Wife’s Business Credit Card Applications
Last month, my wife applied for 2 business credit cards:
- Barclays Hawaiian Airlines Business Mastercard
- Bank of America Alaska Airlines Business Credit Card
My wife is no stranger to either of these banks. We thought she was a shoe-in for both cards.
Preparing For the Applications
Given that we knew Barclays and Bank of America have specific guidelines, we made sure my wife was within their application rules. We worked to avoid new inquiries and new personal accounts on her credit report for several months. Here is my wife’s credit picture before the applications:
- 4 new credit cards in the last 12 months
- 4 credit inquiries in the last 12 months
- 780 credit score
- Applied using the information from our reselling business, which has all necessary tax documents to prove it exists
My wife was within the Barclays and Bank of America application rules. She also had the Barclays AAdvantage Aviator Red Mastercard in the past. She currently has a Bank of America checking account with several hundred dollars in it.
Rejected For Both Cards
My wife was rejected for both cards. That in itself was a bit surprising, but the reasons in the rejection letters we received in the mail are the real surprise. Both of them contained 1 simple line as the rejection reason.
- Barclays rejection reason: too many recent applications
- Bank of America rejection reason: “current economic risk related to your industry”
The Barclays rejection surprised us given the fact they normally accept 5 inquiries or will re-evaluate during a reconsideration call. They gave us a hard ‘no’ during that phone call and had no interest in discussion.
Bank of America’s reason is honestly something I’ve never seen before. The economic uncertainty at this time makes them wary of a reselling business. We are gathering documents to show that we are making a profit right now and putting more money in her BofA checking account before calling in. I’m 50/50 on my optimism here.
Final Thoughts
As more data rolls in, the picture is getting bigger and clearer. Banks are wary about who will be able to repay right now. They’re less willing to extend credit, both on personal cards and on business credit card applications. Barclays is tolerating fewer inquiries on credit reports. Bank of America appears suspicious of retail-based industries with no physical presence to use as collateral.
If you’ve been denied on a business credit card application recently, let us know if the rejection points to anything new. New reasons? Lower tolerance than previous rules showed us? Any data that helps build a bigger picture can help.
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Hi, I applied for the Citibank AAdvantage Platinum Select Business card last week and immediately got the message “We could not approve your application at this time”. I called the reconsideration line and was told I needed to send the 4506T form in to verify income. I was hesitant to do that. Then I received the letter in the mail saying I was not approved because “You have submitted multiple applications for credit”. I’m confused by what that means. Then today, I see Barclays also has an AAdvantage business credit card so I figured I would try that approval instead of sending the 4506T form into Citibank and I got instantly approved. I have only ever had one personal card at each of these banks in the past, both are open and I use my personal Citi card monthly. I do not use the Barclays anymore but have left it open. For my small business I am a delivery driver with a small amount of business income in addition to my regular income. Hope this data helps (or maybe it makes it more confusing!)
Odd that Citi is being the more difficult one here, but thanks for the data. Someone might see this when deciding on a card to apply for, and more data helps those people. Thanks!
Just imagine if the banks all got rejected for bailouts in 2008-2009 due to “current economic risk related to your industry.” LOL Karma always has it’s day. Just a matter of time…
That made me laugh. Thanks.
Chase can NOT debit or hold your Chase checking & sv. They are part of a big giant comp but banking & cc are 2 different entities. Yeah they can use “you don’t have banking relationship with us” for denials. CC entity can’t grab/touch/debit your ck/sv/cd
Thanks for the info. I applied Alaska Business card last April and got denied. I was tempting to apply it again this Spring. Not sure if I should do it now.
Not advising you to not apply, just be extra-prepared.