hottoddy: I just checked my online record and my bank did an enquiry about our new home loan the day before I applied for the card. Oops.
I guess that's a big red flag... of course the card company don't know that the loan has been approved, just that I was applying for it.
The card I was applying for is also a store card with a 10% discount voucher as an introductory offer, plus 6 months interest free. The 10% discount is the real reason I wanted to apply, since it was a $2k purchase. It doesn't really make much difference that it's declined, because the store guy could see I was getting pretty frustrated (it was my second visit there) and he knocked the price down to $1799 anyway. Because it was a straight purchase and not interest free I still have a couple of weeks to find somewhere else that can beat this price, and get refunded 110% of the difference. They should have just given me the damn card and I would have been happy to leave the price.
