BANKS are turning down applications for credit, including credit cards and personal loans, at the astonishing rate of 33,000 a day, despite billions being poured into the banking system by taxpayers.

Around 3.5m credit card applicants have been turned down for their borrowing in the last six months, according to research from Moneyexpert.com, and a further 1.6m have been rejected for personal loans. It is a clear indication that despite the banks needing a bailout from us, they are less keen to return the favour.

When all forms of credit are taken into account, including secured loans against property, hire purchase agreements and car finance, 6.25m applications have been rejected in the last six months, equivalent to 33,600 a day.

Only borrowers with perfect credit records are making successful applications, whereas loans for the rest of the population have all but dried up, said Moneyexpert.com.

Sean Gardner, director of MoneyExpert.com, said: “Borrowers might have thought the banking bailouts were designed to enable the banks to start lending again. But that doesn’t appear to be the case with more than 33,600 applications being turned down every day.

“There appears to be a credit drought setting in across the financial services industry with borrowers paying the price. The credit merry-go-round stopped spinning last year and now we appear to be stuck on a helter skelter heading down.

“People with debt problems should be encouraged to wean themselves off debt and it is entirely right that banks are reining back on them. However there are millions of people who are not accidents waiting to happen who are being rejected.

“Anything less than a perfect credit rating is giving lenders an excuse to slam the door and borrowers need to think long and hard about what they apply for. It’s a slippery slope for borrowers, with rejection only worsening the problem, and discouraging other lenders from saying ‘yes’.”

Young people are suffering most, with nearly a quarter of those who applied in the last six months being turned down for a credit card. But for an unsecured personal loan, around 470,000 people aged between 35 and 44 have been turned down since July last year.

Young people are the most likely to be suffering the effects of a stricter approach from credit card providers. Of those aged between 18 and 24 that have applied for a financial product in the last six months, just under a quarter (23%) have been turned down for a credit card.

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Alison Steed