Credit cards are unsecured debt which ranks well down the list. The risks to the bank or credit provider include the estate being insolvent as well as there being delays arising in administration. The bank has no immediate say in the matter. Common advice where there is a responsible executor appointed is to minimise where possible any interest charges on outstanding payments. It can go well for the bank or not so.
P.S.
Understood @PhilT per following.
Yes, but they are on the list with any and every other unsecured debts. Once again my reply was related to the issuerās risk in taking on an elderly client for the sole reason of age.
The issue for credit cards for retirees is they are unsecured debt. It becomes problematic when some doesnāt or canāt pay as there are ho assets used to secure the debt and sold to recover the outstanding debt.
Maybe an option is for legislation and card issuers to have a secured debt optionā¦such as a individuals house are secured against the credit card. This however might mean the security is listed as an interest on a land title etc, which might not be acceptable to many.
Anyone of any age can die having a job but without assets, and they often do. Some aged persons have substantial assets and others nil, with the former not always taken into account in an obvious manner.
Maybe not.
There are a number of reverse mortgage options (lower interest cost) which may be a better solution in providing funds in retirement, assuming one owns a home mostly or outright.
Iām empathetic to the older Australianās plight of
A) it being difficult to obtain a credit card
Or
B) change banks or credit card products
Both trigger the financial rigours of the system.
Personally I align with
But would note that what might be best at 67 years of age might not be the best product or option in 5 or 10 years time. Banks often change products, and can even drop options forcing change. Weāve surmounted the first hurdle and are facing the second too soon as local branches continue to close.
Providing funds for retirement through reverse mortgage is very different to having a credit card. Credit card is for convenience and I imagine most retirees will pay of sny accrued statement amounts when due.
Reverse mortgage is about selling an asset to provide income for living expenses.
This is the first I have heard of this. Iāve been retired since 2009 and my husband longer than that. Our credit cards are paid off every month, in full. I have a husband who keeps a full budget with estimated as well as actual costs we incur. We organised a debit card after retirement as we were heading overseas and wanted to use it to access money, cheaper than travellersā cheques. We use our credit cards for most purchases and we inquired a couple of years ago about getting an extra different card and it was not going to be a problem. We declined as it had a cost associated with it, annual fee.
My experience was about 5 years ago. There was an inheritance of $150000 coming into my bank account and it was touch and go as to whether it would come before 30th June. I had the work test for that current year as I ndid the census and was paid. I would not be working the following year and I wanted to put this money into my superannuation. I applied to the ANZ for a loan of the same amount which I would pay off as soon as it came through. The first person I spoke to just said no flat out, even though we own a house, have no debts, pay off the credit card each month and an income from superannuation plus a part pension. So I then applied online and someone else called me. He asked what limit we had on our credit card. I said $25000 in case we needed it overseas when travelling. He said if we changed it to $5000 they would give us the loan. He said they worked on you maxing out the credit card to the full amount and looked at how much per month that would cost to pay back plus the loan payment and then matched it against your income. So we changed the limit and the loan was approved. in the end we did not need it but it was a useful thing to know.
We have swapped credit cards within the same bank with no problems but have never tried to get a new one from another institution.
I am just trying to clarify how your post fits into the discussion.
What havenāt you heard of? That it is difficult for a retiree to obtain a credit card, often credit, or something else?
Did you have those cards prior to retirement? Once one has a card there is rarely a problem; or did you apply and get approved after you fully retired?
Thanks for the clarification.
Yes. Even though we have substantial term deposits with them, far outweighing the measly credit limit of 10 grand on the card, Bankwest refused us a credit card, and only offered a debit card.
Ludicrous when they said had we been receiving the old age pension weād have been given one with no issue.
What was being discussed.
We lived in London for almost 10 years, hubby was well paid so we had no problem getting credit cards (after we enrolled in the electoral roll - AU citizens are allowed to vote in UK elections!). Hubby retired a few years ago, we returned to AU and I tried (unsuccessfully) to apply for an Amex charge card and was declined as I had no job / regular income, even though we have assets and savings and are not getting any govt benefits or pensions due to our assets. I had an Amex charge card in the UK for 8 years - high annual fees but getting good benefits with hotels and lounges for travel - there was no requirement for income (here in AU they want regular income and donāt care about assets and savings!). We have already had on-going AU credit cards with 2 banks based on our banking relationships, so are not envisaged that we would need to apply for new credit cards (likely to be denied because we are retirees - with no regular income!)
To add further problems to seeking a credit card, each application may involve a credit check with one or more of the credit agencies, and that check would be an entry in the credit databases. Multiple applications, successful or not, would be red flag.
Now I wonder if a self-funded retiree who had a regular income stream by converting a super account from accumulation into an annuity paying regular fixed monthly amounts would fare better with credit card application.
A bank statement would show, say, $3500 coming in as essentially fixed income every month. That is fundamentally what the issuer wants to see. A regular source of income. Be it employment pay, Gov pension, rental income from a property, or in this case an annuity pension payment.
Debit cards work on the Visa and Mastercard networks, but they are not the same as credit cards.
When you present your card at a hotel reception, if it is a credit card the hotel makes a reservation for the deposit amount. If it is a debit card then the hotel actually withdraws money from your account. Once you check out it may take a couple of weeks to get the money back. If you are traveling you may run out of funds if you are staying in a number of hotels.
I travel with both debit and credit cards. I present the credit card at reception when I am checking in, and the debit card when settling the bill, as it has no overseas transaction costs. The reservation on checkin does not incur transaction costs.
Yes; to me.
I applied to my Credit Union (C.U.), in response to an offer of a credit card. Refused, mainly because my main income is the Aged Pension - with added Superannuation.
Ironically, I was not trying to increase my available credit, but swap: get up to $3k from local C.U., then eliminate $10k from on-line C.Uā¦
Applied for housing loan 18 months ago with a well known regional bank with we had been customers for over 30 years. Over the years we had previously had 4 successive housing loans, all paid off years sooner than loan period. Application was rejected before bank even asked for financial information on grounds we were āover 70 years oldā, and told they ādonāt offer housing loans to anyone over 70ā We took them to discrimination commission, and got an apology and lots of promises to change their policy. We gave up. As self funded retirees with over $2M in assets and income over $100k recently applied for $15k Qantas credit card with one of big 4 banks (so we could accumulate Qantas points), and now waiting nearly 8 weeks for a decision despite providing all the information they requested. No decision, just no response despite several promises that they were āconsidering itā. Yep, suspect age discrimination for over 70ās is alive and kicking with credit providers.
For the first point about a home loan, I can fully understand a lenderās position there.
What the lender wants is an income stream in the form of interest from a borrower for the long term. 20 years or more.
You are far less likely statistically in your 70ās to be around that long than someone much younger.
Also far less likely to be in paid employment.
Most definitely it happened to me 5 years ago because I foolishly canceled a Westpac Black Mastercard that I was paying a yearly premium far greater than the potential rewards BEFORE I applied for a LOW fee credit Mastercard.
When I applied for the NEW Westpac LOW fee Mastercard on line I kept getting auto rejection after rejection. Then I called the Cards area on line only to be told that I was not eligible for a Low fee Mastercard (with no explanation) even tho I had been a long term Westpac customer for more than 20 +years. I was classified as I later discovered as a āSelf-funded retireeā and therefore not suitable/eligible to receive a credit Mastercard.
I then applied for a credit Mastercard from Bankwest (owned by CBA) and surprise surprise I was issued with one with NO questions asked. I have used this card ever since particularly for overseas transactions since I incur NO overseas exchange rate charges when I purchase from overseas online retailers.
I then saw my Westpac Branch Manager and explained to her my situation and I gave her and Westpac an ultimatum that unless they issued me with a Low fee credit Mastercard I would transfer ALL my Accounts including selling my Westpac share portfolio and āwalkā to CBA who were willing to issue me with a Low fee equivalent credit Mastercard.
That was it, they finally ācaved inā but not before I had to read the āriot actā to them and ājump through hoopsā.
The moral of this story is stick to your guns and donāt give up and call their bluff.
Iām just glad I had a CC from before I medically retired. Alas, its with Commbank and I canāt switch to anyone else. REJECT! The Commbank Visa started out as a low rate, and its gradually crept up now to ānormalā rates, but no rewards or annual fee, and I see they have yet another low rate card. Might see if I can switch to that one. Iām betting on rejection.
