As the UK emerges from economic turmoil, consumers are finally feeling confident enough to spend money on credit. But as the ‘Credit Index’ and interactive map released today by TotallyMoney.com shows, it’s not a free-for-all out there. Research reveals that over the past year 61% of UK consumers applying for new credit cards have been turned down, a figure which is actually up 2% on the previous year. That said, these statistics are far from universal with consumers across the country experiencing varying levels of success according to their circumstances. Every region has a different story to tell with vast variations in unemployment, cost of living, home ownership and indebtedness alongside many other factors.
Of all the cities in Britain Dumfries has been crowned the credit card rejection capital of the UK with a whopping 64% of all those who applied for a credit card being turned down. A huge number of factors can affect acceptance rates, but from an economic perspective this region has suffered with falling house prices (-11.3%) in the last year alongside higher than average unemployment levels (7.6%).
Alongside economic concerns the type of cards that people are applying for will also have a large effect on acceptance rates. Overall, 64% of those applying for mainstream credit cards were rejected last year compared to just 52% of those applying for credit repair cards. Therefore, many of the consumers who experienced a rejection could have had a better chance of acceptance if they opted for a credit repair product with more lenient lending rules rather than a table topping best buy deal.
The North/South Divide
Looking across the UK, the Credit Index identifies a clear North South divide when it comes to securing the best credit card deals. The top ten places that have the lowest chances of securing credit cards are dominated by areas outside the South of England. There is just one appearance from the Midlands with Wolverhampton in fourth place. The Index shows that alongside Dumfries with a 64.2% rejection rate, Sunderland comes in second with 64.1% and Kilmarnock comes third, with 63.7%. Unemployment rates are however hitting 11.4% in Sunderland and 10.9% in Kilmarnock alongside respective rates of 4.2% and 4.9%for residents claiming job seekers allowance, so this could go some way to explaining the rankings.
The opposite is clear in the South, which is populated with the highest concentration of people with cleaner credit records. Interestingly, the top three areas in this table are outside of central London in the Home Counties cities of St Albans which boasts a 44% acceptance rate, Bromley with 43.6% and Kingston upon Thames rounding out the leaders with 43.5%. These three areas also hold the top three spots for successful applications for credit repair products, with just under half of all applications likely to be approved. Harrogate is clearly the ambassador of the North in the top credit acceptance table as the only Northern area in the ‘best of’ rank at number four.
Blackpool is the credit hungry capital of the UK
The Index also examines the most credit hungry areas in the UK and Blackpool clearly towers over the country, securing the number one spot for the most applications for credit cards per capita, with an overall rejection rate of 62% it’s also closely aligned with the national average. However, when applying for market leading products this figure rises to 66%.
Second and third in line for the most prolific applicants for credit were Kilmarnock and Manchester. On the other hand, those living in West London and Shrewsbury made the fewest applications for credit per resident.