New Credit Card When Retired

[ethernet]

A pre-retirement financial planner was good advice.
In retirement I have a very good Cwth pension on the old CSS plan and depending what age, annuity and 100K in the bank. A housing loan for 120K was actually difficult and took 4 weeks to process!! BTW, no debts, own another house outright. For stupid expenditure forms and a right pain. So I will be voting against the govt because APRA or whoever have no brains - only for sinking the economy with a one size fits all affordability template. A year ago I withdrew the savings and bought asx ticker GOLD and PMGOLD and did well. So I am not renovating and creating jobs (again, red tape and Spanish inquisition) and the banks don't get to pay me chickenfeed decimal points interest.

The only thing to do about older age discrimination is vote the b***ds out until banks stop acting like a building society, using us boomers for iron clad security. I also dumped excess savings into the mortgage offset, so their profit from the loan is negligible. I wanted to get a trading account with shares, but again too hard, never mind 5 or more percent garbage vs 2.9 on housing loan.

I'd like to create jobs, can afford to, but I am sitting on bullion because wise older persons see trouble ahead

 

[Seat0B]

Sorry, not correct (perhaps we are talking at cross purposes).

I've been in pension phase for 7 years and have made contributions in all but one of them. Provided you are 67 or under (previously 65), or pass the work test, you can make contributions subject to certain limits, balance caps, etc. The contributions go into an accumulation account (not back into the existing account-based pension). You can then start a second pension based/converted from the accumulation account. in fact, you can start a second, third, fourth, etc.

which is exactly what we do with our SMSF and industry fund super, whilst having govt super in pension mode (which you can't easily re-open for anything other than getting re-employed by the government!)

 

[Flashback]

This problem is going to be ours when we eventually can return to Australia (borders open again). Hubby has retired from work in the UK for almost a year. We currently have 2 cc (in Australia) - one from CBA and one from HSBC. We will keep those, but suspect will not be able to apply for any new Australian one, once we are back.

You could perhaps try and do an AMEX transfer from your UK card to an AU one; when I did the reverse (AU to UK) I was still eligible for the sign on bonus. This will only get you 1 card of course, but better than none!

 

[Myrna]

You could perhaps try and do an AMEX transfer from your UK card to an AU one; when I did the reverse (AU to UK) I was still eligible for the sign on bonus. This will only get you 1 card of course, but better than none!

Thanks, Flashback. Good to know that I will still get the sign on bonus.

 

[Jacques Vert]

I am over 67. Sadly the inability to obtain credit cards isn’t widely known so the advice to those on this forum is to get the cards you think you might want, and also obtain higher credit limits whilst you can.

I'm also over 67 and my last credit card approval was in May this year. I don't disagree with your advice; I was merely pointing out that while getting approved for a new card is much more difficult once you have retired, it is not impossible.

 

[tatzcon]

It is not just retirees having this problem.It is also an issue for those of us self employed. I have been knocked back for two CCs that I applied for purely for the bonus points even though i have a $4 million property portfolio. $3million SMSF and $300000 cash in the bank. Because we are self employed we keep our wages we pay below the high tax treashold. The reason they reject my applications is that they don't think I can make my repayments on the income on my tax return even though I have a perfect credit rating. It seems that they only want to issue new cards to salary earners with no assets or accompanying debt. Mind you these people could lose their jobs tomorrow.

 

[Infrequent traveller]

... people could lose their jobs tomorrow.

So true - especially for those “bankers” so smart at their credit assessment

 

[suki]

It is not just retirees having this problem.It is also an issue for those of us self employed. I have been knocked back for two CCs that I applied for purely for the bonus points even though i have a $4 million property portfolio. $3million SMSF and $300000 cash in the bank. Because we are self employed we keep our wages we pay below the high tax treashold. The reason they reject my applications is that they don't think I can make my repayments on the income on my tax return even though I have a perfect credit rating. It seems that they only want to issue new cards to salary earners with no assets or accompanying debt. Mind you these people could lose their jobs tomorrow.

This was the argument I put to the credit assessor. Any employee could lose their job tomorrow so who is more likely to be able to pay credit card debt, me with high cash assets or someone with a family, bills and probably a mortgage? Nope. If you don’t fit into their algorithm it’s almost impossible. It can be done but it’s a very frustrating process. In my case all I wanted was the Qantas points but it’s much worse if you actually want the card.

 

[tatzcon]

This was the argument I put to the credit assessor. Any employee could lose their job tomorrow so who is more likely to be able to pay credit card debt, me with high cash assets or someone with a family, bills and probably a mortgage? Nope. If you don’t fit into their algorithm it’s almost impossible. It can be done but it’s a very frustrating process. In my case all I wanted was the Qantas points but it’s much worse if you actually want the card.

I even sent a complete balance sheet prepared by our bank the Commonwealth private bank showing we were several million in the green. it is so frustrating because when we fully retire CC churning is really the only way to get big chunks of points because we will no longer have business expenses to pay on ours cards.

 

[Infrequent traveller]

I am really not sure if the banks (or at least their credit department) are that smart BUT one possible justification of their approach is asset-rich people are never their target customers. They make money by charging interest on unpaid balance so they embrace people spending on their future earning power, ie future salary stream, for immediate consumption. It’s not that they worry about our creditworthiness but simply they won’t make money by issuing cards when we pay off the balance in full every billing cycle...

Hard to say if they really think it that way. However, if that’s the case (not that the front line staff we are dealing with understands, let alone acknowledges), a pension income (Age or Government, not sure SMSF) may be more relevant to them.

This argument applies to credit card assessment only though. I am still bothered by the fact that I can’t refinance my investment property for a more competitive rate albeit I can easily pay off the loan with my SMSF balance

 

[DC3]

I found Citi (Manila Call Centre) to have no understanding of superannuation. No idea whatsoever. If it’s not in the script, then it does not compute.

 

[suki]

I am really not sure if the banks (or at least their credit department) are that smart BUT one possible justification of their approach is asset-rich people are never their target customers. They make money by charging interest on unpaid balance so they embrace people spending on their future earning power, ie future salary stream, for immediate consumption. It’s not that they worry about our creditworthiness but simply they won’t make money by issuing cards when we pay off the balance in full every billing cycle...

Hard to say if they really think it that way. However, if that’s the case (not that the front line staff we are dealing with understands, let alone acknowledges), a pension income (Age or Government, not sure SMSF) may be more relevant to them.

This argument applies to credit card assessment only though. I am still bothered by the fact that I can’t refinance my investment property for a more competitive rate albeit I can easily pay off the loan with my SMSF balance

You are correct about which people they target. The profit margin on credit cards is driven purely by interest charged and all the financial modeling is based on this and assumes a certain number of people default. It’s hugely profitable which is why banks are now worried about the rise of companies like Afterpay, total credit card debt is actually going down. Why this would impact on loans though must be a different thing, they seem to ignore the SMSF sector altogether.

 

[Flashback]

I even sent a complete balance sheet prepared by our bank the Commonwealth private bank showing we were several million in the green. it is so frustrating because when we fully retire CC churning is really the only way to get big chunks of points because we will no longer have business expenses to pay on ours cards.

The other way to get big chunks of points, is to fly on revenue flights in premium so you earn both status and class of service bonuses. That's worked out pretty well for me and I have over 1 million miles.

 

[clifford]

I'm also over 67 and my last credit card approval was in May this year.

Likewise, I'm of a similar age, with moderate assets and a Comsuper (Govt) pension, and obtained a new Bankwest Platinum MasterCard with a $12,000 credit limit a couple of years ago. I wanted this card because of the fee-free forex transactions.

I was surprised how easy it was, all done online with just a copy of my CBA bank statements in support of the application. I did wonder if it was so straightforward because of my long relationship with CBA, which, of course, I didn't mention. I do have several other credit cards, which I also didn't mention.

FWIW, I also upgraded my Qantas Amex Discovery card to the Ultimate card without any trouble at all.

So it can be done (I've had a few knock-backs too).

 

[pauleg]

You could perhaps try and do an AMEX transfer from your UK card to an AU one; when I did the reverse (AU to UK) I was still eligible for the sign on bonus. This will only get you 1 card of course, but better than none!

Agree - I did it for my Amex when I worked and lived in Thailand. Australia to Thailand and then back again at the end of the posting. Quite easy and obliging!!

 

[jg::]

It's one of the downsides to the banking royal commission, and discoveries that banks were being too "lax" giving out loans. Refusing new credit cards is supposed to make them more "responsible". Very frustrating when you have decent assets. AND, I discovered that they treat your current card credit limit as if you had an on-going loan for that amount, even if you have a long record of paying the balance every month. If you have a current card limit that's been built up to $20,000, and you're applying for a $10,000 card, you may find they treat it as though you're applying for a $30,000 loan, even if you intend to cancel the other card!

 

[Jacques Vert]

...I discovered that they treat your current card credit limit as if you had an on-going loan for that amount, even if you have a long record of paying the balance every month. If you have a current card limit that's been built up to $20,000, and you're applying for a $10,000 card, you may find they treat it as though you're applying for a $30,000 loan, even if you intend to cancel the other card!

Agreed; which is why I suggested reducing your existing credit limits before applying for a new card (back at posts #10 & 34).

 

[ramboflyer]

In the last few years of my working life, I was able to amass nearly one million miles of QFF points mainly through credit card sign-up bonuses. Year after year, I had no difficulty turning these cards over and getting new ones - together with the QFF points. However, since I retired 18 months ago, I have been knocked back for new cards. I currently have two cards, cards I have had when I was working - a CBA Diamond Awards Mastercard as part of a 'wealth package' and a 28 Degrees Mastercard. I think my problem is that I'm 'income poor'. Although I have a property worth approximately $1.5million, superannuation in excess of $.5 million and two newish cars, all paid off, and $6k in the bank, it appears to me that my relatively low income from pension super and aged pension hampers my ability to gain new credit cards and the QFF points that flow from them.

Does any one have advice to get around this problem?

Thanks.

My circumstances are similar. In 6 years of retirement I have been successful in a few new cards but it can be hard work. I've been knocked back twice for a St George card and it frustrates the hell out of me because I want those 200,000 sign on bonus points. My credit score is in the 800's with not 1 blemish on it. I owe nothing ( I pay my 2 cards in full) and my income from super and age pension is over $60,000 and a healthy super balance and money in the bank. My credit card debt each month is $5000 - $6000 and never have a problem paying so I don't understand their reasoning.

At the moment I'm trying to earn Krisflyer miles through a healthy sign on bonus somewhere and I think I'll reluctantly have to cancel my Amex card to help the approval process.

 

[Battymum]

Could this be age related discrimination?
In the event of your passing credit card debt is unsecured, I don't believe beneficiaries are obliged to pay it out from superannuation death benefit.

 

[Numbat]

We have been in the new credit card denial roundabout too. Having valuable assets, multiple businesses and a SMSF amount to nothing if you don’t owe anyone anything i.e. have no debt.
We managed to get two credit cards through our local community bank when we transferred all of our quite considerable banking balances to them.
The two credit cards, one with a large limit and one with a small limit, both have my husband as the primary card holder. If, heaven forbid, anything happens to him the credit cards will be cancelled. I am going to try and procure credit cards in my name in case of this eventuality.