topic USAA Denial in Credit Card Applications

USAA Denial

cs91 — Sun, 02 Aug 2020 02:17:19 GMT

Yesterday I applied for the USAA Preferred Cash Rewards Visa and received an instant denial.

The reasons per the denial were:

- Maximum Credit Extended

- Time since recent account opening too short

- Too many inquiries last 12 months

- Recently seeking credit

Stats at the time:

Income: Low Six Figures

Utilization : 0-1% across my 8 open CC's. (I try to stay AZEO, but may not be reporting any usage at the time of the app)

CLs ranging from $14k-50k

Mortgage that was opened last year.

Auto Loan opened in 2019 that is 25% paid off.

AAoA: 5 years 11 months

Oldest Account : 11 years xx months

EX FICO 3 - 763

No derogs at all

EXP INQ: 2 last 12 months, 5 last 24.

4 accounts opened in the 12 months

Other versions of FICO (8/9) my scores are 780-794-805 across the different bureaus but obviously that doesn't matter since USAA uses EX Fico 3.

I've been a full USAA member since 2008 and currently have one credit card with them (my oldest open account) which has a CL of $35k. I honestly only use this card twice a year to keep activity on the account. It's an old World Mastercard I opened in 2012 that was converted to a VIsa and follows the same rewards structure as the current Rewards Visa. I also found it interesting that when I attempted to see if I could request a CLI, after I clicked on "Increase Credit Limit", I immediately received a message saying they were unable to process my request online and that I needed to call in. This message came up before the screen that usually asks for income and housing info.

The main reason I was applying for this card was to have a card with USAA that I find more useful and could use on a more regular basis for rewards. I have other daily drivers I use for cash back/rewards (NFCU Flagship and Costco VISA) but since I use USAA for banking and insurance I was wanting to show a bit more loyalty when it came to CC spending. I should have held off, I certainly don't "need" the credit by any means.

i know that opening 4 accounts in the last year, especially in this current economic climate would cause a lender to be cautious, which I completely understand.

I just wanted to share my story and hopefully with more activity I can try again in a year or two.

Thanks for reading!

Re: USAA Denial

credit_endurance — Sun, 02 Aug 2020 12:13:35 GMT

Sorry to hear about your denial...

I have currently (2) USAA cc with them. Limitless & Rate Advantage. I rarely use my Limitless card now due to obtaining AOD 3% card which was a big hit around here in March & April. Because of my sporadic usage my rate advantage credit limit was decreased from $22k---> $2k 😲 which I certainly wasn't happy about but do understand their position. I believe max exposure with USAA is $50k on a cc or combination of cards. With a few exceptions around here.

With your profile it really doesn't make since and should be a slam dunk for approval! I think most reliable lenders have begun to "tightened " up things now. Not sure if USAA does recons as my cards have been instant approvals but I would give them a call as you have been a longtime member of the institution and that should hold some weight no matter if we are experiencing a pandemic mode.

Re: USAA Denial

CreditInspired — Sun, 02 Aug 2020 16:33:41 GMT

IMHO, if you're not using any of the $35K that USAA has already extended to you, I understand why they would not extend any more credit your way?

Is it possible to ask for some of that CL to be used to open another one of their CCs?

GL2U

Re: USAA Denial

cashorcharge — Sun, 02 Aug 2020 16:32:05 GMT

I'd agree with @CreditInspired

Your profile looks good but without any usage logic, and with things tightening up, I can see their point on this

Recapturing some in a CLI may be a better option.
Best of luck

Re: USAA Denial

cs91 — Sun, 02 Aug 2020 19:57:59 GMT

Thank you for the responses! @CreditInspired and @cashorcharge I took your suggestion and ended up requesting a CLD from 35k to 10k. Hopefully this will open up some room for a future card. I'm not sure I'll apply again right away as I'd hate to burn another inquiry and be denied again. Also, I imagine I'd receive less than favorable terms with the factors they listed.

Re: USAA Denial

Aim_High — Mon, 03 Aug 2020 02:08:35 GMT

@cs91 wrote:
Yesterday I applied for the USAA Preferred Cash Rewards Visa and received an instant denial.
The reasons per the denial were:
- Maximum Credit Extended
- Time since recent account opening too short
- Too many inquiries last 12 months
- Recently seeking credit

Stats at the time:
Income: Low Six Figures
Utilization : 0-1% across my 8 open CC's. (I try to stay AZEO, but may not be reporting any usage at the time of the app)
CLs ranging from $14k-50k
Mortgage that was opened last year.
Auto Loan opened in 2019 that is 25% paid off.
AAoA: 5 years 11 months
Oldest Account : 11 years xx months
EX FICO 3 - 763
No derogs at all
EXP INQ: 2 last 12 months, 5 last 24.
4 accounts opened in the 12 months

I've been a full USAA member since 2008 and currently have one credit card with them (my oldest open account) which has a CL of $35k.

Sorry for your decline @cs91. As much as I like USAA in some ways, their banking policies have been a frustration for me as well. They are not only conservative but also pretty rigid and not consumer-friendly.

Their products are pretty good, but having researched the competition and being on My Fico for the past couple of years, I have come to see that they don't truly lead the industry in any credit product. The closest they came was the briefly-available Limitless 2.5% cash back card, which has now been topped by AOD FCU's 3% card.

USAA previously had my oldest open account (from the 1980's) but they made me close it in a divorce a few years ago since it was joint. (Other lenders allowed the card history to be retained and assumed by one of us.) That was very annoying.

USAA won't allow product conversion.

USAA won't allow limit consolidation.

USAA won't allow rate reduction. My "Rate Advantage" card, which I applied for after my divorce, is not at their best rate. Even though my credit and finances have dramatically improved, they won't lower my rate. So I have several other cards that beat my "Rate Advantage" and most of them earn rewards too, while the "Rate Advantage" doesn't. That includes my Navy Federal Platinum, my AOD FCU Visa, my PenFed Power Cash Rewards, and my Capital One Quicksilver.

USAA hasn't offered special "Balance Transfer" promotions like many of my other cards that could be helpful.

Consequently, I don't use my USAA card and it wouldn't be the first card I reach for when I need a "low rate." But they haven't closed it since I bank and have insurance with them. I've considered closing it and later reapplying for the Rate Advantage or another card of theirs. One day I may get around to that, but for now, I just leave it open for history.

Re: USAA Denial

Meanmchine — Mon, 03 Aug 2020 02:25:47 GMT

Sorry about your denial

Try again in 6 months

Re: USAA Denial

cs91 — Mon, 03 Aug 2020 02:35:47 GMT

@Aim_High Thanks for sharing your situation! It is a bit frustrating that they aren't as flexible as other lenders. It would be nice if they would periodically review accounts (or upon request) for APR adjustments and/or allow for product changes. Maybe as time goes on and they continue to see other lenders allow this they will adjust their policies. I know some people have had several issues with them but they've always treated me well with my banking and insurance needs. Hopefully with some the recent leadership changes and restructuring of services they will get become more competitive.

Re: USAA Denial

Conceptual23 — Fri, 18 Sep 2020 21:41:16 GMT

Sorry to hear about your denail. I was thinking of pulling the trigger with them later today.