Written

For

The

Australian

-

Retired,

financially

comfortable

and

still

knocked

back

for

a

credit

card?

It’s

just

not

right

Here's a puzzle for you: why would a bank knock back a self-funded retiree with $1m in super for a $5000 credit card they could pay off 200 times over? Welcome to the strange world of retiree banking in Australia.

After decades of loyalty — paying off mortgages, racking up interest payments, keeping accounts in good standing — older Australians are being treated like financial outsiders the moment they stop earning a wage. It's a quiet form of age discrimination that, frankly, shouldn't be happening.

Most retirees don't want credit cards because they're desperate for cash. They want them for the convenience of travelling overseas, the complimentary travel insurance, and the rewards points. Yet banks seem to dismiss passive income from superannuation, dividends and investment properties as somehow less legitimate than a payslip.

The Australian Banking Association points to the National Credit Act, which requires providers to assess whether an applicant can repay the credit limit within three years. Fair enough in principle — but common sense should tell you that a retiree drawing a healthy pension from a well-funded super account is a lower risk than most 25-year-olds with a job.

Post the banking royal commission, banks have tightened credit policies significantly. That's a good thing when it stops unemployed people spiralling into debt. But retirees have become collateral damage.

My advice? Do not cancel your credit card before you retire. Once you're out of the workforce, getting a new one becomes remarkably difficult. If you've already retired, be very clear with the bank about your ongoing passive income streams. Alternatively, keep your home loan open with a $1 balance and use the redraw facility as a quasi credit card for emergencies.

I've even heard stories of retirees asking their adult children to take out cards on their behalf. That's a sad indictment of how the system treats people who've done everything right.