Are There Credit Cards For Pensioners?

Banks turning down credit card applications from older Australians is a well-documented and growing issue. The main reason is that banks can’t make as much money from retirees because they tend to pay before the due date to avoid interest charges — the smart way to use a credit card without being out of pocket.

For retirees without a regular income anymore, getting approved for a credit card isn’t easy, but it’s not impossible.

Credit card options for pensioners and retired seniors

There might be moments when the Age Pension and superannuation aren’t enough financial support, so it might be necessary to get a credit card. Banks tend to think about credit cards for pensioners in the same way they do for low-income earners or the unemployed — without a salary, there are few options.

If you’re retired and in the market for a credit card, look for no-frills options. The best pensioner credit cards have low fees, lower interest rates, and a low minimum credit limit. Once you’re a customer, it’s easier to request a credit limit increase or update cards at a bank. So, aim for a card that’s easier to obtain on your retirement income.

Pick a type of credit card that fits your income and is friendly to pensions and super as a form of income. Also, make sure your credit score is in good standing.

Requirements when applying for a credit card

Before applying for a credit card, check with the specific bank for the list of the required documents, as they differ between banks and credit card products.

For example, if you’re applying for a NAB credit card, you’ll need all or a combination of the following documents:

most recent bank statement where your super was received
most recent superannuation fund statement from the past six- to 12-month period
financial statements for the last financial year
letter from a financial planner or advisor detailing payments from superannuation investments
most recent bank statement showing three months of consecutive government payments
letter or statement from a government agency that has made a payment in the past 90 days.

If you’re applying for a Westpac card, you can use the following evidence:

superannuation statement from the past 60 days
three recent monthly bank statements
Australian Taxation Office Notice of Assessment
an annual investment statement
letter from a government agency.

Increasing your odds of approval

Shortlist two or three suitable credit cards. Call each bank to double-check your eligibility and get all your documents ready before applying. While banks won’t likely be able to offer individual financial advice, they can give you a better understanding of the available products so you can make an informed decision.

Applying for a credit card as a retiree is no different from securing any financial product. Aim for a card within your means, with a manageable credit limit.

What to do if you feel your application is unfairly denied

Lenders are more stringent about who they provide credit to, including pensioners. Even with proof of income, assets and a solid credit history, some retirees are still being denied credit cards.

The Australian Banking Association (ABA) advises individuals who have been denied unfairly to follow up with the lender to supply additional proof of financial status — or go to another bank. It’s important to know your rights. Denying pensioners credit breaches the Australian Human Rights Commission age discrimination rules. Be prepared to advocate for yourself and go to the authorities if necessary.

» MORE: How to apply for a credit card in 5 steps

If a consumer falls behind on credit card repayments, they could be contacted by a debt collector. A creditor can get a court order for the debt to be paid in instalments directly from wages or a bank account until it’s settled. It’s possible to take a tax-free lump sum from a superannuation account from age 60 to clear debts. This could reduce assessable assets, which may boost Age Pension entitlements.

Applicants must be at least 18 years old. There is no maximum age limit to apply for a credit card, but there are challenges for pensioners and retirees without a regular income. Lenders make money off interest charges, which are more common with younger consumers.