Bad credit credit cards: Smart consumers could be declined credit

Banks could decline credit accounts to people they do not consider to be profitable, bad credit credit cards customers have been told.

Justin Modray, of Candidmoney.com, said that consumers who pay off their credit card balance every month could find that their positive financial management goes against them when applying for new accounts.

However, Mr Modray suggested that people should check their credit record with one of the three main credit agencies, Callcredit, Equifax and Experian, if they are unsure why they have been turned down for a source of credit.

He added: "Being turned down for a credit card shouldn't affect your credit rating in itself, but a series of rejections over a short space of time might cause problems, so it's best to find out what's wrong."

The latest figures released in September by Credit Action showed that the write-off rate on consumer lending by UK financial institutions increased in quarter two to 7.4 per cent.