The past decade or two has seen a real boom in credit card use, with competition between issuers leading to ever lower rates of interest, constantly improving features, and a consistent relaxing of acceptance criteria. Such has been the activity in the marketplace that it's become quite normal for people to carry several cards, often building up quite a collection as attractive new offerings tempt them into making yet another application. Card issuers were also desperate for custom, such are the potential profits available to them from every customer, and so having your application approved was usually quite a straightforward matter.



This situation has seemingly come to a screeching halt, with many people finding that it's far more difficult these days to get a new card. Why is this?

The basic answer is that we're facing a global credit crisis, where banks themselves are finding it increasingly difficult to obtain the credit they need in order to finance lending to their customers. The causes of this crisis are complex and beyond the scope of this article, but in essence the years of easy lending have come back to haunt the banks. Lending criteria had become so relaxed that finance was extended to people who would never have been considered previously, because their credit profile made them a risky prospect to lend to. The banks thought that they had covered the risks of lending to these customers via a complex system of financial machinations, and so lent money with what many analysts now say was reckless enthusiasm.

Unfortunately, many of these loans are now being defaulted on, leaving some banks facing huge losses, and the whole system of lending money is freezing up as financiers worry about who owes what and how much will be lost. This is feeding through into consumer lending in the form of higher interest rates and drastically raised acceptance criteria, making it much harder to have your credit card or loan application approved.

This doesn't mean that you really can't get a new card with better features though - you just might need to try a new approach. Firstly, you may well have to lower your sights a little, and apply for one of the second tier cards rather than an all singing and dancing one from the best buy tables. These elite cards are only available to the select few, and many people who were once considered prime customers are now slightly less than prime as lenders adjust their criteria.

Also, it makes sense to give your credit file a spring clean, making sure that it doesn't contain any inaccurate information, and that you don't have any overlooked debts unpaid that you didn't know about. Sorting out any small problems of this nature will improve your chances of being approved.

If you already have a number of cards, try canceling ones that you don't use any more, as having too much credit available to you already will be a hindrance to obtaining further finance. If you still have balances on these cards, then you may consider a debt consolidation loan to be a worthwhile idea, allowing you to get rid of those old expensive card debts and package them up into a cheaper and more organised loan.

There's no telling how long the current financial problems will last, and indeed we don't know if we'll ever see a return to the days of easy credit, but by following the above steps you'll at least maximise your chances of having your application approved, whatever the future might bring.