24% of Britons face ‘credit card decline shame’

Almost a quarter (24 per cent) of Britons had their credit or debit card declined at least once last year. 

A new study by thinkmoney has discovered that a significant number of people have not been able to use their plastic because of insufficient funds, a worrying sign for their financial future. 

While 14 per cent only had to suffer the shame of their card being rejected once in 2013, it happened more times for ten per cent of individuals. Aside from the humiliation that comes with being turned down for credit, it could also have an effect on a person's long-term credit profile. 

Young people (18 to 24-year-olds) were found to be much more likely to have their cards declined, with nearly 20 per cent suffering the ignominy, compared to only four per cent of over-55s.

Those living in the West Midlands had the most problems with card rejections (15 per cent), while people in Yorkshire had the least (five per cent).

Keeping on top of finances

Ian Williams, director of communications at thinkmoney, said it can be very easy for consumers to lose track of their spending. 

"Just one unexpected payment can tip you over your credit or overdraft limit. But there are ways to stay on top of your finances and avoid the embarrassment of having your card declined in a shop surrounded by other people. One way to do this is to make a commitment to check your balance on a regular basis."

In the digital age, when mobile, online and telephone banking is available, consumers should be able to stay aware of how much money is in their account. In fact, budgeting can be much more in-depth thanks to internet resources.

Of course, Britons need to make sure they are using credit cards in an effective way. Statistics from Consumer Intelligence show that 44 per cent of people clear their debts before transferring to another card, thus preventing them from dealing with high interest rates. 

Only 22 per cent of those questioned failed to make any progress on reducing their arrears, while around six per cent admitted exceeding their card's limit. If consumers are going to use plastic, paying off the bill every month is advised, as it is the simplest way to manage outgoings. 

Debt management

If Britons feel like their financial position is out of control, seeking a debt management plan (DMP) could be the best course of action. This informal debt restructuring solution is available to those who have debts above £1,500 and owe money to more than one creditor.

In order to qualify, consumers must be able to afford a £100 payment each month. Among the benefits of a DMP are that it will reduce monthly outgoings to a more reasonable sum – housing costs, children's needs etc are taken into consideration. There is also the possibility that a freeze on any further interest will be approved, which stops any further debt getting from building up.

By Joe White