Re: HSBC QF Platinum - 20K points (+2 QP passes) - $199 Annual Fee [extended] to 30/0
Thanks wafliron, was not suggesting lying at all, even white ones.
And I wasn't suggesting that you were - just saying it as a general thing.
Just don't understand why most cc companies don't ask your assets as this would change many of their views on your ability to apply/ retain / pay off a card.
We're getting out of areas I can speak on authoritatively here, and into semi-speculation, but... I'd guess that for relatively small, unsecured loans like credit cards, your non-liquid asset position is pretty much irrelevant to the lender. I say this because I'd imagine the cost of recovering an unpaid debt by seizing / selling these assets would almost always exceed the amount of money the lender is trying to recover - it's a long, slow, drawn-out, expensive process for a lender to pursue court-ordered seizure of assets / bankruptcy / etc due to
consumer loan default under Australian credit laws.
Your liquid asset position will be a bit more relevant to them though, as even though it would be just as hard for a lender to recover an unpaid debt by going after those funds, they at least know you have a certain amount of readily available cash you can draw upon to pay them back if you're hassled enough / put under enough pressure / etc. With non-liquid assets this isn't the case - you may even
want to pay them back, but can't, because the money is locked up in a house, car, etc.
What they're much more interested in overall though is serviceability - their estimation of your ability to repay based upon your income vs other regular expenses. This is because, for most people, their free cash flow (income minus expenses) is going to be their main source of funds to pay off the card, and hence governs a lot of the lender's risk. e.g., even if you have $1mil of property, if your free cash flow is only $500/month and you rack up a $20,000 of CC debt, it's going to take a
long time for you to be able to pay that off - and you might even decide that you just can't pay it back at all. And hence this is why credit card apps focus so much on income and expenses - including the outstanding balance, and more importantly, minimum repayments, of any other loans (without necessarily caring too much about the assets they were used to purchase).
Most of them just see large loans and freak out even if your income is ell within the range to pay them.
I don't think this is a fair characterisation, really. Every lender has their own credit acceptance policies, and while some are more sophisticated than others, and some are tighter or looser than others, they're all based on some sort of logic and a set of "rules". i.e, it may seem like they "freak out" to you, but there is (almost) always a "real" reason for their decision behind the scenes.
Additionally, you have to remember that in Australia lenders operate in an environment where:
1) We don't have comprehensive credit reporting, so they can't get authoritative data on applicant's historical "responsibility" when it comes to credit, and largely have to rely upon what an applicant tells them voluntarily (as per my previous posts).
2) It is very slow and expensive to pursue consumers over unpaid loans, meaning the cost of making a bad credit decision is high (as per above).
3) Under the relevant credit laws (previously UCCC, and more recently NCCP), lenders face hefty fines (amongst other potential penalties) if they provide credit that is "unsuitable" for a consumer applicant. The problem is that "unsuitable" is not strictly defined under law, so lenders have to make their own subjective assessment and this also factors into their risk/return models.
Hence, I don't think you can really place much "blame" on the lenders when they appear to be being conservative - as HSBC seem like they often are, based on the info in this thread.
I guess they just see large loans, multiple cards, large income and just put you in the too hard basket and refuse you.
Again I don't necessarily think this is a fair generalisation to make. Some lenders may do this, but most don't as they'd be turning away good, profitable business in most cases. When this appears to happen it'll just be that unfortunately your particular set of circumstances don't match a risk profile they're happy with, and their computers (or humans, sometimes) say "no". For the reasons set out above - and many more.
