I have $1.6m in super but can’t get a credit card. Am I too old?
I once had a wonderful credit card, Wizard, just great for overseas travel. When it changed to Latitude, conditions steadily deteriorated, with the latest blow being a regular monthly charge. So I applied for other cards, and much to my surprise was knocked back. Am I too old (75 years)? Do I spend too much on holidays (that’s what my super of $1.6 million is for)? Are my other credit card limits too high? Why? The credit card companies refuse to tell me and won’t give me any indication of what I should do to be eligible. As you said last week, I shouldn’t keep applying for cards or risk my credit rating. What is the way out of this? Jan.
Jan, this is a story I hear over and over again: older Australians being rejected for credit. And when I say “older”, I mean as young as 50.
This is despite good credit scores, solid repayment histories, significant assets or money in the bank and even despite existing banking relationships.
No matter how flush you are, once you hit a certain age it can be tough to get a credit card.Credit: Dominic Lorrimer
So what’s the problem? Banks value earned income far more highly than unearned, as they do when it comes to home loans. This makes it incredibly difficult to get approved for any credit after you retire and stop earning. Or even as you theoretically approach that date.
Here’s the experience with credit card applications of several other older readers who’ve contacted me or commented on last week’s column about the best credit cards: “I wonder if you could use one of these articles to address the issue of retirees being unable to obtain a credit card,” one asked.
Another: “I tried to change card providers and despite having considerable verifiable assets and cash reserves, I was asked to provide wage slips. This despite retiring 14 years ago. [I] stayed with my current provider and was given a measly $2000 increase … baffling logic or lack of.”
And a third reader said: “I retired then asked for my credit card limit to be lifted and it was refused because I did not have weekly earned income slips (PAYG), even though my assets both in cash and investments were substantial and a matter of record with the same bank.”
Readers have also reported to me being refused as long as a decade before retirement.
Now, there are two other reasons – apart from the obvious, like a bad credit score or record with debt – that will see anyone rejected or with a balance that is reduced:
