Credit card refusal

[Fisher1]

Hi all,    I recently decided to apply for a credit card because I wanted to get airmiles rewards on my spending - it seemed like a good idea at the time. I am now an Australian citizen, have had my account with the bank in question for ten years, loads of money through it and never overdrawn.  I’ve been living at the same address in Australia for just over four years. I have a retirement income well in excess of the minimum outlined by the bank, and have most of it transferred here from the UK.  So I was gobsmacked to be told by a not-very-nice man on zoom (in the manager’s office, in place of the manager!) that I was not eligible for a credit card.     I notice they have recently changed their web page eligibility criteria to include the need for a verifiable Australian income. I’ve decided the airmiles aren’t worth it, but this seems crazy to me.   Is this typical, or are all Australian banks weird about foreign income?

[Marisawright]

When we were in the UK the banks there were weird about foreign income too. Understandable because they have no recourse to that foreign money if you default 

[Eera]

I think it's pretty common: initially I had to get one for my dad on my account as the bank wouldn't let him have one.  He's since managed to get one in his own name but I don't know what bank or what hoops he had to jump through

[ramot]

1 hour ago, Fisher1 said:

Hi all,    I recently decided to apply for a credit card because I wanted to get airmiles rewards on my spending - it seemed like a good idea at the time. I am now an Australian citizen, have had my account with the bank in question for ten years, loads of money through it and never overdrawn.  I’ve been living at the same address in Australia for just over four years. I have a retirement income well in excess of the minimum outlined by the bank, and have most of it transferred here from the UK.  So I was gobsmacked to be told by a not-very-nice man on zoom (in the manager’s office, in place of the manager!) that I was not eligible for a credit card.     I notice they have recently changed their web page eligibility criteria to include the need for a verifiable Australian income. I’ve decided the airmiles aren’t worth it, but this seems crazy to me.   Is this typical, or are all Australian banks weird about foreign income?

We had no problem at all, getting a credit card when we got ours years ago even though we were on the 410 temporary visa.

We are now citizens, all our income comes from UK, is guaranteed  income for life from pensions, I don’t know anything about rules changing, but had no problem getting a credit card from Qantas a couple of months ago for the air miles. I do find here that if you don’t fit ‘the norm’ unless you are lucky enough to find someone switched on, you face an uphill battle to get them to understand. Ask to speak someone higher up, or check out other banks, and threaten to move your account,

Hope all is well apart from that. x M

 

[Fisher1]

On 04/07/2022 at 19:24, ramot said:

We had no problem at all, getting a credit card when we got ours years ago even though we were on the 410 temporary visa.

We are now citizens, all our income comes from UK, is guaranteed  income for life from pensions, I don’t know anything about rules changing, but had no problem getting a credit card from Qantas a couple of months ago for the air miles. I do find here that if you don’t fit ‘the norm’ unless you are lucky enough to find someone switched on, you face an uphill battle to get them to understand. Ask to speak someone higher up, or check out other banks, and threaten to move your account,

Hope all is well apart from that. x M

 

Hi Ramot, yes all well with us, thankfully weren’t impacted by floods, just the endless rain. Your reply is interesting because it shows that a credit card is possible!  I was very annoyed with Westpac because we have had our account open for ten years -since long before we left the UK, and there’s been quite a lot of money through it. For a credit limit of $6000 dollars!  The guy we spoke to thought it was ‘interesting’ that I would be the main account holder, and found it hard to believe that we had no other credit cards.  So we’re thinking of moving the account anyway. I think I’ll look into the Qantas card, thanks for the info.   Hope all’s well with you.

[Fisher1]

On 04/07/2022 at 16:50, Marisawright said:

When we were in the UK the banks there were weird about foreign income too. Understandable because they have no recourse to that foreign money if you default 

Considering the account has been open for more than ten years and there’s always been a credit balance, we own our own home in Australia outright and have assets elsewhere in Australia, I thought it was a bit outlandish to refuse without even checking our income. Luckily we didn’t actually need a card, we just wanted the air miles.

[Marisawright]

4 minutes ago, Fisher1 said:

Considering the account has been open for more than ten years and there’s always been a credit balance, we own our own home in Australia outright and have assets elsewhere in Australia, I thought it was a bit outlandish to refuse without even checking our income. Luckily we didn’t actually need a card, we just wanted the air miles.

It is outlandish, I'm just saying it's the same in the UK so not exclusively an Australian thing.

[ramot]

25 minutes ago, Fisher1 said:

Hi Ramot, yes all well with us, thankfully weren’t impacted by floods, just the endless rain. Your reply is interesting because it shows that a credit card is possible!  I was very annoyed with Westpac because we have had our account open for ten years -since long before we left the UK, and there’s been quite a lot of money through it. For a credit limit of $6000 dollars!  The guy we spoke to thought it was ‘interesting’ that I would be the main account holder, and found it hard to believe that we had no other credit cards.  So we’re thinking of moving the account anyway. I think I’ll look into the Qantas card, thanks for the info.   Hope all’s well with you.

We’re fine thanks.

 

 

[Fisher1]

On 08/07/2022 at 21:40, Marisawright said:

It is outlandish, I'm just saying it's the same in the UK so not exclusively an Australian thing.

Yes. We were once refused a 20% mortgage on a flat in the UK by the UK bank to which my salary had been paid for seventeen years by the same employer, no overdrafts, no loans, one credit card. The reason? Although I was employed by the dept of Education in the UK, I was on a seconded post and living outside the UK!   We closed our account and borrowed elsewhere. Infuriating though. My husband was laughing about our current situation afterwards - he pointed out that we could win squillions of pounds on the lottery and - theoretically - they wouldn’t give us a credit card. Daft.

Edited July 9, 2022 by Fisher1

[Parley]

Having a credit card usually encourages over spending. Costs you more than any points you get.

Sticking with a debit card for daily spending is best in my opinion, and you are not going to get in trouble overspending.

I do have a Qantas credit card too, still fee free from my time as a bank employee. I use it only for emergencies or to manage large payments where i might not have the cash immediately on hand.

[Marisawright]

1 hour ago, Parley said:

Having a credit card usually encourages over spending. Costs you more than any points you get.

Only if you have that kind of personality.  I have a credit card and pay it off in full every month.  Have done for the last twenty years or so.  I claim cash rewards with the points, not goods, so I can keep track and ensure I'm getting more back than the credit card fee. 

[Nemesis]

4 hours ago, Marisawright said:

Only if you have that kind of personality.  I have a credit card and pay it off in full every month.  Have done for the last twenty years or so.  I claim cash rewards with the points, not goods, so I can keep track and ensure I'm getting more back than the credit card fee. 

Its not always down to personality, though. There have been times where without a credit card to use my partner at the time and I would have been homeless. No jobs, no income, had to get money from somewhere to pay the rent to keep a roof over our heads. For some people a credit card can be a lifeline to get you through a bad patch. It may not be ideal but in desperate times its sometimes the last resort. I feel very sorry for those who have had to go down that road and are never able to pay off the debts but sometimes there is no other way - the need to survive is greater than the common sense view of staying away from high interest debt. 

[Marisawright]

51 minutes ago, Nemesis said:

Its not always down to personality, though. There have been times where without a credit card to use my partner at the time and I would have been homeless. 

Parley said a credit card "encourages over spending".  In other words, if you have a credit card, you're going to spend money on stuff you don't need.  

IMO, that's only going to happen if you're inclined to spend money on stuff you don't need anyway.  That's all I was saying.

Edited July 10, 2022 by Marisawright

[Cup Final 1973]

On 08/07/2022 at 12:40, Marisawright said:

It is outlandish, I'm just saying it's the same in the UK so not exclusively an Australian thing.

Yes you’re right.  I’ve had a Barclaycard for over 20 years but as soon as I hit 70 the spending limit was reduced to £250.  This is not brilliant but I get round it by paying it off every week.  Like Marisa I always pay the bill to avoid interest and use it for the cash back it gives.  I have applied for other cards but no one is interested in how much money you have in the bank.  If you have just a pension as income it’s an automatic refusal.

[Tulip1]

2 hours ago, Cup Final 1973 said:

Yes you’re right.  I’ve had a Barclaycard for over 20 years but as soon as I hit 70 the spending limit was reduced to £250.  This is not brilliant but I get round it by paying it off every week.  Like Marisa I always pay the bill to avoid interest and use it for the cash back it gives.  I have applied for other cards but no one is interested in how much money you have in the bank.  If you have just a pension as income it’s an automatic refusal.

It’s more about how much your income is.  The banks don’t care whether it’s from a salary or a pension, they have to document affordability when offering lending.  If you only have a low pension, that’s the same as someone with a low paid part to job and they would equally be refused.  If you have a good pension then you would be treated the same as someone with a good salary.  Having money in the bank cannot be used as affordability.  You may spend it all the following week and then you have been given lending that you can’t afford.  Lots of very old people have credit cards with high limits because they have passed the affordability to have them.  Nothing to do with age or having just a pension. 

[Cup Final 1973]

8 hours ago, Tulip1 said:

It’s more about how much your income is.  The banks don’t care whether it’s from a salary or a pension, they have to document affordability when offering lending.  If you only have a low pension, that’s the same as someone with a low paid part to job and they would equally be refused.  If you have a good pension then you would be treated the same as someone with a good salary.  Having money in the bank cannot be used as affordability.  You may spend it all the following week and then you have been given lending that you can’t afford.  Lots of very old people have credit cards with high limits because they have passed the affordability to have them.  Nothing to do with age or having just a pension. 

Yes I know it’s basically about your income.  My point is that if your income is the basic pension from the UK government you are never going to qualify for a credit card, no matter how many hundreds of thousands you have in your bank account.

[Whey aye]

Banks have internal hurdles and APRA hurdles.They seem terrified to fall foul of either.

Just gone through it on a margin loan ( a mortgage on shares basically.) The loan was 10% of the gross value of the shares.If they cannot tick the boxes on the script then you get nothing.

Your tax assessment reveals that you don't work.This doesn't tick the box,but you can overcome that hurdle by explaining franking credits and crossover points to enter the PAYG system,the old provisional tax.There is no debt to the ATO that I am paying off.

The next hurdle is super.We need a print out no older than than 90 ( 60?) days.Why,it's out of date.Markets are falling.The income is on the bank statements I have provided you with,15th of every month.

The bank statement says you have spent xx thousands,in the last week,where has that gone.Markets have dropped, shares are cheap,I bought more.Where is this on your statement of estimated outgoings for the year.When I filled the forms in I didn't know that  3 companies I was interested in would drop rapidly,it isn't normal expenditure.Do you need copies of contract notes,it just adds to the security I have offered you which is out of date every minute as prices move.

Then the killer,what is this on the bank statements every 4 weeks that you have marked as UK pension.The aged pension.

We need a letter from that pension provider explaining how this pension is calculated.You are not getting one,the UK govt is not going to provide you with one.They gave me a letter stating this is your pension based on the number of years contributed,that letter does not fit in with your 90 day rule.The letter is also in a safe place so I will never find it until I don't need it.Then I will never stop falling over it.The changing amount is because of currency movements.The UK govt does not enter into Forex trading or currency swaps so the aus govt can transfer money to pensioners in the UK at a guaranteed rate and the reverse,pensions paid to me and others at a guaranteed rate.

Right at the start you tell them,I need to speak to people with common sense or they know what they are doing,this isn't a run of the mill application.In general you are talking to untrained people that have a list of boxes to tick,it isn't their fault.The bank doesn't want to spend money to train them,they try to help but haven't been trained to the level needed.They can't say they are just as pissed off as me because they are being recorded.

While this is always at a level or two up the problems are still the same,you haven't ticked all the boxes so it doesn't happen.

You can kick arses at an AGM,collar directors and explain grassroots problems,they will delegate it and you go round and round in circles.

[Fisher1]

On 10/07/2022 at 10:24, Parley said:

Having a credit card usually encourages over spending. Costs you more than any points you get.

Sticking with a debit card for daily spending is best in my opinion, and you are not going to get in trouble overspending.

I do have a Qantas credit card too, still fee free from my time as a bank employee. I use it only for emergencies or to manage large payments where i might not have the cash immediately on hand.

It can encourage overspending. However, having previously had a credit card for thirty one years without once failing to pay the entire balance at the end of the month, we're quietly confident that we could cope.  Thanks for the concern though - some people do get into a right mess.

Edited July 11, 2022 by Fisher1

[Fisher1]

I hadn't considered that possibility - it's not very comfortable to think about people being in that situation but yes, in extremis I can see that a credit card could be a life saver.

[Marisawright]

4 minutes ago, Fisher1 said:

It can encourage overspending if you're daft enough. However, having previously had a credit card for thirty one years without once failing to pay the entire balance at the end of the month, we're quietly confident that we could cope.  Thanks for the concern though - some people do get into a right mess.

Me too, that's exactly what I was trying to say to Parley.  There are some people who find it a lure to spend more, and some that don't, like you and me.

[Fisher1]

23 hours ago, Cup Final 1973 said:

Yes you’re right.  I’ve had a Barclaycard for over 20 years but as soon as I hit 70 the spending limit was reduced to £250.  This is not brilliant but I get round it by paying it off every week.  Like Marisa I always pay the bill to avoid interest and use it for the cash back it gives.  I have applied for other cards but no one is interested in how much money you have in the bank.  If you have just a pension as income it’s an automatic refusal.

It's ridiculous!  If they are so concerned about their miserable few thousand dollars, they could surely ask for surety - like cash to be kept on deposit for the first year or something?  I really wanted those air miles 

[Fisher1]

21 hours ago, Tulip1 said:

It’s more about how much your income is.  The banks don’t care whether it’s from a salary or a pension, they have to document affordability when offering lending.  If you only have a low pension, that’s the same as someone with a low paid part to job and they would equally be refused.  If you have a good pension then you would be treated the same as someone with a good salary.  Having money in the bank cannot be used as affordability.  You may spend it all the following week and then you have been given lending that you can’t afford.  Lots of very old people have credit cards with high limits because they have passed the affordability to have them.  Nothing to do with age or having just a pension. 

My original comment wasn't about having a low income  - it was about being refused a credit card because the income arose outside Australia. It means that if you move to live in Australia, you are forever banned from having a credit card, no matter what your credit score or how long you have lived here?  

Edited July 11, 2022 by Fisher1

[Fisher1]

12 hours ago, Cup Final 1973 said:

Yes I know it’s basically about your income.  My point is that if your income is the basic pension from the UK government you are never going to qualify for a credit card, no matter how many hundreds of thousands you have in your bank account.

Yes, I can see that would be difficult, but the bank's issue with me was that the income did not arise in Australia.

Edited July 11, 2022 by Fisher1

[ramot]

22 minutes ago, Fisher1 said:

Yes, I can see that would be difficult, but the bank's issue with me was that the income did not arise in Australia.

Like you all our income comes from UK, from pensions, and rent. We don’t have superannuation, age late 70’s. My husband had no trouble getting the Qantas credit card, had obviously to answer questions, I assume he met the conditions,  We wanted it for air miles as well. Is it worth a try?

Edited July 11, 2022 by ramot

[Fisher1]

39 minutes ago, ramot said:

Like you all our income comes from UK, from pensions, and rent. We don’t have superannuation, age late 70’s. My husband had no trouble getting the Qantas credit card, had obviously to answer questions, I assume he met the conditions,  We wanted it for air miles as well. Is it worth a try?

I’m going to give it a go.