Keeping Your Credit Card

I have written before about the problems faced by retirees, who don’t have a credit card, and who are trying to get one. Often it may be a widow who is declined, because the family credit card was held in the name of the husband, often the breadwinner, with the wife having a supplementary card linked to the main card. Of course, upon death of the primary cardholder, the card owned by the supplementary hold is cancelled.

Over the last two months I’ve been communicating with a woman who has been trying to get a credit card from the Commonwealth Bank, and thanks to my urging, kept persevering. This week she wrote to me as follows.

“I am pleased to let you know that I have finally received a credit card with a $5000 limit from Commbank! The online sales team were of no help. They claim the only measure of my ability to pay was my income, even though I do have a large sum in superannuation. The response was “how do we know you  won’t withdraw all your superannuation tomorrow and spend it!” It never occurred to them that a person with an income now, could resign from their job or be sacked.

Fortunately I have a small income from a consultancy. The bank initially rejected my sole trader tax dept documents until I stumbled over the Individual Income summary on the tax dept site! Then they wanted a three year history of my income.

I decided to go back to my original branch to recruit some face to face contact – hopefully bypassing the ‘sales’ team. I spoke to the female manager about the situation for mature women and she was very familiar with it. I also put to her that if I happened to be in a domestic violence situation without a credit rating, I would have difficulty renting property. 

This branch manager rang the credit department weekly to check on the progress and I feel her intervention helped.”

You can see what a process it was, and it would appear that only her small income as a contractor saved the day. But the lesson is clear – anybody approaching retirement, should make sure they have a credit card in their own name while family income is still there to back up the approval process. Once retirement happens, it may be too late.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance.