Credit crunch: Seniors struggle to swipe plastic in age of banking reforms
- Replies 21
Navigating the financial landscape can be a daunting task, especially for older Australians who may find themselves at a disadvantage due to recent banking reforms and the complexities of credit ratings.
The story of Jacqui Bauer, a 57-year-old cleaner, is a stark example of the challenges faced by many seniors when it comes to accessing credit.
Ms Bauer's experience is not unique. After separating from her husband and attempting to establish her own credit history, she was met with resistance from banks.
Despite having a stable income, the lack of credit history in her own name rendered her 'high risk' in the eyes of financial institutions.
The result? A begrudgingly approved credit card with a meagre $500 monthly limit.
‘When I wanted to get a credit card in my own name I had to beg and grovel to get one, and they would only give me one with a $500 per month limit,’ Ms Bauer said.
‘A lot of people don't realise if you don't have the credit card in your own name you are not getting a credit rating, and you need that credit rating to move on with life.’
The cleaner, aged 57, expressed her inability to rent a car or purchase book packs for her children's school due to the absence of a credit card.
Chris Grice, CEO of the advocacy group National Seniors, revealed that older Australians are frequently denied credit cards.
He attributed this trend to the fallout of the 2018 Royal Commission into banking and financial misconduct, which exposed extensive predatory lending practices.
Mr Grice remarked that the reforms, although well-intentioned, created challenges for older Australians in demonstrating their creditworthiness.
‘It's a bit of a whack-a-mole situation, and they fixed a problem here, but suddenly, it pops up somewhere else,’ he explained.
‘This tightening of credit policy has meant that a number of folks now find it difficult to get a credit card, particularly in that post-retirement phase.’
Mr Grice highlighted the increased challenge for retirees to demonstrate a stable income, particularly those with limited credit history.
Moreover, he noted a growing trend among businesses to phase out cash and cheques, with the latter slated for complete elimination by 2030.
According to Mr Grice, approximately 500,000 personal cheques are processed monthly in Australia, with about 400,000 attributed to older Australians.
Furthermore, bank closures are exacerbating customers' difficulty accessing cash.
A Senate inquiry into bank closures in rural and regional Australia recently concluded its final hearing at Bribie Island in Southeast Queensland, where the community lost its only NAB branch.
‘The system, if you want to call it that, is pushing people towards digital payments,’ Mr Grice commented.
‘But there's cohorts within society, the most vulnerable and the older, that don't have the capacity to keep pace with what's happening.’
The Australian Banking Association has yet to comment on the issue.
Amidst the challenges facing seniors in accessing credit cards, another concerning trend has emerged in the realm of retirement.
A growing number of Australian pensioners are facing rejection after rejection in their job search endeavours as highlighted by a pensioner’s story.
This alarming pattern sheds light on the difficulties seniors encounter in securing employment opportunities, highlighting broader issues surrounding age discrimination in the workforce.
Have you or someone you know faced difficulties obtaining credit as a senior? What are your suggestions for addressing this issue? Please feel free to share your experiences and thoughts in the comments below.
The story of Jacqui Bauer, a 57-year-old cleaner, is a stark example of the challenges faced by many seniors when it comes to accessing credit.
Ms Bauer's experience is not unique. After separating from her husband and attempting to establish her own credit history, she was met with resistance from banks.
Despite having a stable income, the lack of credit history in her own name rendered her 'high risk' in the eyes of financial institutions.
The result? A begrudgingly approved credit card with a meagre $500 monthly limit.
Jacqui Bauer’s situation highlighted the older Australians’ struggle in applying for credit cards. Credits: Shutterstock
‘When I wanted to get a credit card in my own name I had to beg and grovel to get one, and they would only give me one with a $500 per month limit,’ Ms Bauer said.
‘A lot of people don't realise if you don't have the credit card in your own name you are not getting a credit rating, and you need that credit rating to move on with life.’
The cleaner, aged 57, expressed her inability to rent a car or purchase book packs for her children's school due to the absence of a credit card.
Chris Grice, CEO of the advocacy group National Seniors, revealed that older Australians are frequently denied credit cards.
He attributed this trend to the fallout of the 2018 Royal Commission into banking and financial misconduct, which exposed extensive predatory lending practices.
Mr Grice remarked that the reforms, although well-intentioned, created challenges for older Australians in demonstrating their creditworthiness.
‘It's a bit of a whack-a-mole situation, and they fixed a problem here, but suddenly, it pops up somewhere else,’ he explained.
‘This tightening of credit policy has meant that a number of folks now find it difficult to get a credit card, particularly in that post-retirement phase.’
Mr Grice highlighted the increased challenge for retirees to demonstrate a stable income, particularly those with limited credit history.
Moreover, he noted a growing trend among businesses to phase out cash and cheques, with the latter slated for complete elimination by 2030.
According to Mr Grice, approximately 500,000 personal cheques are processed monthly in Australia, with about 400,000 attributed to older Australians.
Furthermore, bank closures are exacerbating customers' difficulty accessing cash.
A Senate inquiry into bank closures in rural and regional Australia recently concluded its final hearing at Bribie Island in Southeast Queensland, where the community lost its only NAB branch.
‘The system, if you want to call it that, is pushing people towards digital payments,’ Mr Grice commented.
‘But there's cohorts within society, the most vulnerable and the older, that don't have the capacity to keep pace with what's happening.’
The Australian Banking Association has yet to comment on the issue.
Amidst the challenges facing seniors in accessing credit cards, another concerning trend has emerged in the realm of retirement.
A growing number of Australian pensioners are facing rejection after rejection in their job search endeavours as highlighted by a pensioner’s story.
This alarming pattern sheds light on the difficulties seniors encounter in securing employment opportunities, highlighting broader issues surrounding age discrimination in the workforce.
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