Whilst I agree with this, the current rules do need work. I am retired and older than my wife. Our credit card is in my name for historical reasons. When I die all my accounts will be frozen. When we tried to apply for a credit card for my wife wife, also retired, she did not meet the income tests - it’s geared to showing your last three payslips. If you don’t have them, then the computer says no. We have assets over a million dollars and can’t get a credit card!!!
That could be because they may not have the liquid funds at the time the funds are needed. So a short term loan that once the funds are available is paid off. A Debit Visa or MC does not have that flexibility to meet a sudden demand beyond the balance in the account.
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I know that @grahroll, but I was asking if credit was the reason for a credit card. If not, then debit card works just as well without the problems of approval for those who are not employed.
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They may not wish to divulge their personal reasons so was just speculating on a possible reason.
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Welcome @Rayden, I moved your short discussion about credit cards and retirees to this older relevant topic. Prior posts may be helpful or just reinforce you are not alone.
Prior to her retiring I had my partner get credit cards from 2 banks since I knew once the pay slips stopped the world of finance would change dramatically overnight. When facing the change after retirement and ‘meeting with it’ the first time, it can be too late.
If you scan prior posts there are ways, bank dependent and your/her personal situation dependent, but as you learnt, in general it does not happen, at least not easily.
Some have been discussed in prior posts and a dedicated topic
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Join the club. I have a CBA MasterCard and my wife has a Woolworths Visa card and a Latitude card.
The rewards points have been drastically reduced on both the MasterCard and the Visa card but we are stuck with them despite paying all cards in full by the due date every month.
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I suppose the advantage (or problem) of a credit card versus debit card is that at purchase time, it is not my money paying for it. When the bill comes a month later, the realisation comes in, and the choice is there. Pay up in full, or just pay a part of it, maybe just the minimum. If the later choices, then the high interest kicks in, and the iceberg looms.
I have a “sweep” facility visa branded debit card that if I choose to is a credit card also. The bulk of money is in a money management account earning high interest (I know, laughable these days), and covers what is in the card account if there are insufficient funds. Deliberately, I have a low limit to avoid possible nasties.
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The topic I linked above might be a good read. Sometimes there is a noticeable difference.
Some include:
- rewards cards that include travel insurance or other useful (to the holder) perks
- when there will be a hold on the card, such as a guaranteed rental or room booking that could freeze or impinge on cash availability
- where credit processed transactions (debit or credit card) have surcharges
- a stolen debit card can result in a cleaned out or compromised account; ‘you’ do have multiple transaction accounts don’t ‘you’?
A few years ago debit cards did not have the same protections as credit cards, but today they are essentially identical (at least for Visa and Mastercard issued debit cards).
It was also not so many years ago one could not guarantee a rental car booking with a debit card, or in some cases having to post a ‘debit card cash’ bond to rent one at all; some agencies would just not accept it, and others would make it effectively a cash transaction where you essentially posted a bond and a few days after returning the car your refund would appear. Not always convenient. But that was then, not always now, at least with the majors.
I once had similar until I realised the ramification of a stolen or otherwise compromised card being able to drain the lot. Fraud detection has come a long way since then and there are guarantees, but at the minimum while working through it one may or may not have working cash or credit available.
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Banks are more interested in your cash flow, not your assets. They want to have a reasonable certainty that you will have the readies to pay off the debt at the end of the month. I have heard of people on the pension getting a credit card (with a low limit) because they had money coming in regularly.
Bank tellers do as they are told, and don’t have much discretion to ‘bend the rules’. Work you way up the food chain at your bank; find out who the manager is and talk to them. Perhaps if you explain you aren’t planning to spend more than you currently are, it is just a security blanket issue, they agree to a new credit card…
Have you tried applying at different brands of banks, or credit unions? You may or may not have better luck elsewhere?
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Have you tried getting a card issued to your wife under your credit card account…I think they are called a authorised user.
Then see if your issuer will swap you around or change status so you are both principle cardholders. If they don’t (note, this may not be legal), she should still be able to use the credit card if the credit card company isn’t notified through probate… and she maintains any fees and pays on time.
This info may be useful as well…
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I believe that this is his concern which my wife also had before getting her own cards.
Whilst I have a card on my wife’s Visa account and vice versa, she won’t be left in the lurch when I go and she also has her own bank account.
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I think that option is not an option for the purpose raised.
If she can be made a joint primary card holder after being made an authorised card holder, in the event of one primary card holder dies, the account should remain open and the deceased primary card holder is removed from the credit card account.
As I indicated and if the partner remains and authorised person on death of the primary card holder, if the credit card company isn’t notified through probate the account will remain open providing debts and fees are paid - but such path may not be legal.
Our experience shows adding an authorised person to a credit card account doesn’t require proof of income, unlike when opening up a new credits card. If the card issuer allows ready change from authorised to primary card holder after some time, this may be a solution.
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There is indeed a significant difference between an authorised card holder and a joint card account holder. I missed that, thanks. I lost the plot in your last paragraph. Mea culpa.
In contrast to authorised users where there are no qualifications, issuers will not always add another to an account as a joint account holder unless they are ‘qualified’ in their own rights, and others might, so worth a chat with the bank.
As I unintentionally demonstrated it is important to keep the concepts of authorised user and joint account holder correct.
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Yes and this is also recommend, and it won’t be the first time they have had to resolve such an enquiry with similar extenuating circumstances.
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Complex territory?
How couples and families structure their finances for retirement and provision their wills varies greatly.
There may be good reasons things are as they are. For some couples there may be unsuitable arrangements the result of poor advice or a lack of knowledge.
We have managed using various strategies including several joint accounts. In our state and for our arrangements if one partner is widowed there is no probate required and a will can be cheaply and expeditiously complied with. The freezing of accounts or assets is not a concern.
Perhaps the solution for @Rayden involves some further advice from professional legal and financial services.
That’s aside from the more general issue of CC providers and their income tests applied to retirees. Security of the income streams is what the banks seek to establish. Wealth is not a factor unless it is in turn generating an assured income. And the asset is not free to be gambled away in a night at Crown Casino?
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And the bank where one holds their accounts as they will have financial history and may be more sympathetic.
Also, some credit card companies allow for independent proof of ability to pay debts…such as an audit statement from a certified practicing accountant, where proof of salary income is not possible. This question should be asked of the card issuer…what alternative information would satisfy their requirements.
Note: a audit statement from a CPA is at the individuals cost and may not guarantee a primary card being issued.
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Without knowing your particular financial situation I will let you know what happened when I needed to increase the amount on my credit card. I had always kept it low but once I started cruising and had to pay large amounts I needed to increase it to $25000. At that time I decided to get a new card and I went with Amex because they had a great FF programme (and which I was forced to changed to Altitude a year or so ago) and they required me to have an income over $65,000 p.a. I was a self funded retiree with the bulk of my income coming from my super and so I went in to the bank and spoke to an officer. I gave her my last tax returns plus I took in my super statement showing how much it had made for the last year. They accepted the super profit/return as part of my income and gave me the credit card. Whilst it is in my name my husband also has a card which he can use. I do not know whether he would be able to continue using it after I died, I would think not.
Another poster mentioned being charged $5 monthly for a savings account. If you are over 55 and retired you do not have to pay a bank fee and you are paid the same as the deeming rate - again at present the rate is a joke, currently on smallish amounts .05%.
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