Imagine this: You’re a seasoned credit card user, juggling multiple cards from various banks, each with its own credit limit. Your credit score is stellar, your income is impressive, and yet, when you apply for the coveted SBI Cashback Credit Card, you’re met with a rejection citing “over-leverage.” Frustrating, right?
This scenario isn’t uncommon. Many applicants have faced similar hurdles when trying to obtain the SBI Cashback Credit Card. The reason? Over-leverage—a situation where your total credit limit exceeds what the bank deems appropriate based on your income and credit profile.
Understanding the Over-Leverage Issue
What Does ‘Over-Leverage’ Mean?
In the context of credit cards, over-leverage refers to a situation where your total credit limit across all cards surpasses what the bank considers manageable relative to your income and creditworthiness. Banks assess the risk of lending based on various factors, including your existing credit exposure. If they perceive you as having too much available credit, they might be hesitant to extend more, fearing potential defaults.
Why Does SBI Reject Applications Due to Over-Leverage?
State Bank of India (SBI) has stringent internal policies to mitigate risk. If your cumulative credit limit is disproportionately high compared to your income or if you have numerous credit cards, SBI may classify you as over-leveraged. This classification often leads to automatic rejections, even if your credit score and payment history are impeccable.
Real-Life Experiences: Tales of Rejection and Persistence
The Persistent Applicant
One Reddit user shared their journey of applying for the SBI Cashback Credit Card multiple times, only to face rejections each time. Despite having a high income and a good credit score, their numerous existing credit cards led to the over-leverage flag. Undeterred, they decided to take matters into their own hands.
They reached out directly to SBI’s customer service, explaining their situation and expressing their desire to obtain the cashback card. After several discussions and providing additional documentation, their application was finally approved.
The Shared Limit Conundrum
Another applicant faced challenges due to shared credit limits across multiple ICICI cards. While CIBIL reported only two cards, the actual number was higher, leading to confusion and subsequent rejection by SBI. The applicant’s strategy involved closing the shared-limit cards and reapplying, which eventually resulted in approval.
Step-by-Step Guide to Overcoming the Over-Leverage Issue
Assess Your Current Credit Situation
Begin by evaluating your existing credit cards and their respective limits. Identify which cards have shared limits and which are reported separately to credit bureaus. This assessment will help you understand your actual credit exposure.
Close Unnecessary or Shared-Limit Cards
If you have cards with shared limits or those that you no longer use, consider closing them. This action reduces your total credit exposure and can positively impact your credit profile.
Reduce High Credit Limits
For cards with high individual limits, especially those not frequently used, consider requesting a reduction in the credit limit. This can help align your credit exposure with your income.
Wait for a Cooling Period
After making adjustments to your credit profile, it’s advisable to wait for at least 3 to 6 months before reapplying for the SBI Cashback Credit Card. This waiting period allows your credit profile to reflect the changes and demonstrates responsible credit management.
Reapply with a Strong Application
When reapplying, ensure your application is robust. Provide accurate and up-to-date information, including your income details and any supporting documents. A well-prepared application can increase your chances of approval.
Alternative Strategies to Obtain the SBI Cashback Credit Card
Apply Offline
Some applicants have found success by applying offline through SBI branches or agents. In-person applications may allow for direct communication and clarification of any issues, potentially leading to approvals that online applications might not secure.
Utilize Existing Relationships
If you have an existing relationship with SBI, such as a savings account or loan, leverage that connection. Banks are often more inclined to approve credit applications from existing customers with a history of responsible banking.
Seek Professional Assistance
Consider consulting with financial advisors or credit experts who can guide you through the application process. Their expertise can help you navigate the complexities of credit applications and improve your chances of success.
Conclusion
Facing an over-leverage rejection for the SBI Cashback Credit Card can be disheartening, but it’s not the end of the road. By understanding the reasons behind the rejection and taking proactive steps to adjust your credit profile, you can enhance your chances of approval.
