Amex denial- what does this mean?

[Anonymous]

I got the denial letter from my appilcation for the Starwood Preferred Guest card. I've never seen a denail that states per federal regulation we are required to evaluate your capacity to take on new debt. Your income and resources known to us is insufficient in relation to the credit you applied for and overall debt obligations as reflected in our records. 

Is this because of my large student loan? I have no lates, a current FICO of 709 and good income approaching six figures. I spoke to a CSR by phone and they couldn't tell me any more than this. I'm going to try and send a letter to get more information. If it was due to the account discharged in chpater 7 in 1992, I would understand but that's not mentioned anywhere. The Delta card I just closed never grew past a lousy 1K starting line either. I'm trying to determine what in my profile makes Amex hate me.

[Anonymous]

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@Anonymous wrote:

I got the denial letter from my appilcation for the Starwood Preferred Guest card. I've never seen a denail that states per federal regulation we are required to evaluate your capacity to take on new debt. Your income and resources known to us is insufficient in relation to the credit you applied for and overall debt obligations as reflected in our records. 

Is this because of my large student loan? I have no lates, a current FICO of 709 and good income approaching six figures. I spoke to a CSR by phone and they couldn't tell me any more than this. I'm going to try and send a letter to get more information. If it was due to the account discharged in chpater 7 in 1992, I would understand but that's not mentioned anywhere. The Delta card I just closed never grew past a lousy 1K starting line either. I'm trying to determine what in my profile makes Amex hate me.

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The Credit CARD Act of 2009 requires lenders to evaluate a borrower's "ability to pay."  What the letter is saying is that based on your income and assets that you declared to Amex in your application, and compared to your financial obligations(loans, etc) recorded on your credit report, Amex does not think you have sufficient "ability to pay."   

Do you know what your current DTI is?

[RonM21]

OP sorry it is not working out for you with them. As MaizeandBlue said, the lender can evaluate your ability to pay. Now, how often these lenders actually dig deep enough may easily vary from profile to profile. Often times, we see they give out limits that might clearly be too much for an individual. But there are those times when they do evaluate it closer. Hopefully, you can get the answer you are in search of from them.

[joltdude]

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@Anonymous wrote:

I got the denial letter from my appilcation for the Starwood Preferred Guest card. I've never seen a denail that states per federal regulation we are required to evaluate your capacity to take on new debt. Your income and resources known to us is insufficient in relation to the credit you applied for and overall debt obligations as reflected in our records. 

Is this because of my large student loan? I have no lates, a current FICO of 709 and good income approaching six figures. I spoke to a CSR by phone and they couldn't tell me any more than this. I'm going to try and send a letter to get more information. If it was due to the account discharged in chpater 7 in 1992, I would understand but that's not mentioned anywhere. The Delta card I just closed never grew past a lousy 1K starting line either. I'm trying to determine what in my profile makes Amex hate me.

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A 1K Amex card is a red flag, ditto for the discharge in 1992,  a large student loan that *im guessing isn't paid down much*, Amex has a long memory... Amex was forgiving with the 1K amex... but they didn't forget... Can I ask how much you burned them for? 

Might be worth offering to pay them back if you can afford it.... 

-J

[Malcono]

Amex has a long memory.  

Closing the Delta card may not have been the best choice if you're trying to show them you aren't as bad as before.

[Anonymous]

They took a loss of 3K in 1992 on two cards. I have much better luck with Citi, Navy and Penfed so closing the Amex wasn't a big loss. I just find it interesting I never have a problem with anyone else but Amex. Never had an issue getting an auto lan and i have three of them paid off in the last five years, so definately have shown i learned my lesson from being young and stupid back in college. 

As to the Delta I closed, never carried a balance, so no interest paid. I tried heavy use as advocated by some here paying before the statement date and I tried the leave it locked in the sock drawer neither had an impact on the account growing. Frankly an airline card with that low limit is worthless for travel and there was no way to convert it to a cash back card so it had to go.

[Anonymous]

Thanks for the insight Jolt, the student loan hasn't moved down much. My daughter has an illness which requires a number of expensive meds each month so the loan has taken a backseat. She's 19 now and recently got her disability claim approved, now i should be able to get back on track with the student loan and start brining that balance down.

[blindambition]

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@Malcono wrote:

Amex has a long memory.  

Closing the Delta card may not have been the best choice if you're trying to show them you aren't as bad as before.

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+1

I think this is also a reason. After rebuild, it is showing impulsive by not aging account. IMO I also can see them possibly coming to think you are just chasing.

[Anonymous]

Perhaps but the account was two years old so i didn't just open then close it. I even upgraded to the platinum thinking maybe it would help. 

[joltdude]

Give it some time... If you wanna take another go at it.. wait untill some of your student loan moves down.. even 6 months of payments... I'm guessing once that starts moving down.. you might have a better chance..  Only thing i might have done different would have been to hold on to the 1K card for a bit longer and see if they would bite for a CLI a few months once you start making some payments on that student loan... watch to see what happens with your score and then try for just an SP CLI in 6 months... or then app for a new card...  Really do think they remember.. and possibly want to see the loan moving down... remember reason codes are still kinda vague... the other thing if you kept the old card it could have possibly a SP on denial and HP only if you were approved.... you closed that door by closing the card as well... 

I know, hindsight is 20/20.. but its something to keep in mind for next time if your still interested in going for it..

Though i would be trying preapprovals but wait until you have at least a few payments under your belt... 

Revisit this situation with your scores (preferably a FICO or two, or all 3 even) and even come back on here in 3 months.. At that time try a prequal even...

Might be able to point you in a direction a bit better.. 

I think you still can. but your gonna have to have even a bit more patience..

-J