Almost five million product applications** from people seeking new credit cards or personal loans have been rejected by lenders in the past six months, according to new research* commissioned by MoneyExpert.com.
The independent financial comparison website says around 56 per cent of people in Great Britain - around 25.8 million adults** - have applied for a financial product in the past six months.
Of those, 13 per cent of people who have applied for a financial product in the past six months have had credit card applications rejected and six per cent have had unsecured personal loan applications turned down.
This equates to around 3.27 million credit card applications and some 1.56 million loan applications - or around 27,000 application rejections every day, assuming each person has made just one application.
And those whose applications are approved are being forced to pay far higher charges for borrowing money than they were 18 months ago, the website warns. MoneyExpert.com analysis shows that the average APR on credit card purchases has increased from 16.77 per cent in March 2007 to 17.46 per cent now. And the average rate on a £5,000 personal loan has rocketed from 8.6 per cent to 15.3 per cent now.***
People aged between 25 and 34 are most likely to be rejected, with more than one in five (21 per cent) applicants in that age group failing to get a credit card in the past six months, and one in ten (10%) failing to get unsecured personal loans, according to MoneyExpert.com.
Sean Gardner, Director of MoneyExpert.com, said: "The banking crisis means lenders are terrified to lend to almost anyone.
"They are battening down the hatches and focusing on getting as much money back as possible. In the current climate lenders are tightening up on already tightened rules for new applications.
"Anyone whose credit record is even remotely suspect risks rejection. Banks want to recover their bad debts and they don't want to create more of the same."
MoneyExpert.com is warning consumers not to apply for multiple credit cards and says people should be wary of applying for market leading offers if they know they have aa less than perfect credit score.
Sean Gardner added: "It makes sense for lenders - and even borrowers - to reject applications from people with debt problems or who have already made multiple applications.
"People who know they don't have a perfect credit record shouldn't apply for the top products. Lenders just won't accept your application, particularly in the current climate. Make sure you apply for a product that is suitable for you and that you only try to borrow what you can afford to repay."
* YouGov interviewed 2157 GB adults online between 10th - 12th September 2008
** Figures grossed up by Citigate Dewe Rogerson based on YouGov survey findings. % figures were factored up using the ONS population figures which state there are 46,300,400 adults aged 18 and over in GB.
*** MoneyExpert analysis