Credit Card Approval When You're Low Income but Have Decent Assets

• 

  thatonethere on 27/08/2020 - 07:00

  +2

  Banks want you to keep paying for the card (ir incoming). Even better paying their big interest charges. Their least preferred scenario is for you to stop paying and they have to force a time consuming bankruptcy where you have to sell your assets.

  So yeah kow income you'll need to hunt around. The banking royal commission has made it harder for you.

• 

  AustriaBargain on 27/08/2020 - 07:29

  +1

  WHat are the assets.

  • 

    Travis J on 27/08/2020 - 08:01

    +1

    does it matter? which type of assets are acceptable? even if he put up 10K of cash for them to hold as collateral, they still wouldn't consider someone without a job.

    • 

      AustriaBargain on 27/08/2020 - 08:10

      +1

      If it was Nazi gold then he might have some trouble.

    • 

      MechEng on 27/08/2020 - 08:49

      -1

      I believe that does matter, in terms of liquidity.
      Shares vs house for example. Shares are easier to dispose and could have some liquidity, when compared to RE.

      • 

        RockyRaccoon on 27/08/2020 - 11:09

        Actually it can cut the other way as well. If you have a house its harder to liquidate, and hence harder to get up and run from the debt.

• 

  lubos on 27/08/2020 - 08:00

  +1

  I don't really need the card, was just chasing their free cash

  Your credit utilization is in your credit history so if you are applying for credit cards but don't actually use them, then your credit utilization is 0% and that has negative impact on your future credit card applications.

  The bank wants customers who are going to utilize the credit, not just grab sign up bonus.

• 

  [Deactivated] on 27/08/2020 - 08:29

  +3

  Pensioner with DeCeNt AsSeTs still doesnt know how to get a credit card 🤦‍♂️

  • 

    whooah1979 on 27/08/2020 - 09:06

    +4

    Op could be a 16 year old pensioner that just inherited their parents property.

    • 

      Chandler on 27/08/2020 - 13:14

      Shane34
      Member Since 11/10/2018

      I'd say he's (?) probably 35 going on 36.

      • 

        bobbified on 27/08/2020 - 13:26

        +5

        Some people put their year of birth there so OP could be 86 years old. If he is that age, it's pretty impressive that he is computer-savvy enough to be able to ask questions on an online forum!

• 

  Quantumcat on 27/08/2020 - 10:52

  +1

  There is not much incentive to have someone on low income having their credit card as they would either spend very little, or spend a lot and not be able to pay it back and now they have to go to the effort of coming after your assets. No upside for the bank.

• 

  Seraphin7 on 27/08/2020 - 11:12

  This is one of the outcomes of the "responsible lending" criteria. Banks are basically now prevented from extending to credit to anyone who cannot service it via their income. In the context of lending and debt, assets are effectively valued at zero.

  I've had run ins myself with banks recently in the context of home lending. Basically my existing property (that I want to sell after acquiring a new property) is not counted towards my ability to repay the loan. I can only get a loan on the basis of my income, not an assets that will be applied against the loan post-settlement.

  • 

    Fever4shakin on 27/08/2020 - 11:32

    +1

    This is something I've been looking at too, after talking to mortgage brokers it seems like it's somewhat difficult to "upgrade" to a bigger house without displacing yourself for a period of time. Feels like first home buyers today are sold this myth of 'getting your foot in the door' by starting small and building equity but when it comes time to upgrade, house prices have kept rising and your available equity is bugger all in the long run.

    • 

      Seraphin7 on 27/08/2020 - 11:40

      Yep, it's a true nightmare. It's spawned this whole hoopla of extended settlements where everyone is juggling dates all because your existing property that's worth whatever it's worth is "deemed" to be worth zero in this transaction.

      In my circumstance, I want to buy a new property, apply cash assets to the extent possible, then sell my current place and apply that to the loan. The LVR while I've got two properties would be no more than 40%, dropping to no more than about 15% following the sale of the existing property … but do you think I can get that through the banks' credit policies?

      • 

        miwahni on 27/08/2020 - 21:53

        Sounds like you're after bridging finance, where you only have to show you can service the end debt and not the peak debt. Any other kind of loan, you will need to show you can service the whole debt regardless of whether you plan to sell existing property afterwards. LVRs don't make your repayments, income does.

        • 

          Seraphin7 on 27/08/2020 - 22:04

          @miwahni: Agreed, but bridging finance ain't what it used to be. It used to be that you could effectively do what I'm describing. In the "responsible lending" environment, you still have to be able to service the peak debt. There's a couple of banks that talk about "bridging loans" … most run a mile as soon as you mention bridging … but they're simply not the type that existed 20 or 30 years ago.

          That's the problem I have. I can service the end debt on my ear. I can offer sufficient collateral such that the LVR never goes above 40%. But the banks won't lend me enough to create the "peak debt" as that goes beyond by "servicing limits".

          • 

            miwahni on 29/08/2020 - 00:09

            @Seraphin7: Try St.George (or Bank of Melbourne if you're in Vic). They're still doing the classic bridging loan, called a Relocation loan. Always was serviced on end debt, not peak.

            • 

              Seraphin7 on 29/08/2020 - 11:31

              @miwahni: Hmmm … thanks for the tip. Will take this up with my broker.

              • 

                miwahni on 30/08/2020 - 23:36

                @Seraphin7: Good luck with it. Brokers didn't used to be terribly fond of this loan because they either get commission claw back when you pay down the loan at sale of current property, or they don't get as much commission upfront (only on end debt) - can't remember which - so if broker isn't fond of the idea, call the bank directly.

• 

  Drakesy on 27/08/2020 - 11:16

  I find Westpac is more stringent than ever over the last few months, was rejected for their FF card a couple of weeks ago for no reason. (Income over the threshold, savings etc.) I believe it's just a sign of the times.

  But yeah, unfortunately the minimum income test is there for a reason

• 

  HardQuiz on 27/08/2020 - 11:38

  What’s your current credit score ?

  You could appeal and request a review of the decision but I don’t like your chances.

  The mark is already on your card, let’s hope the review doesn’t trigger another credit check.

  • 

    Shane34 on 27/08/2020 - 12:16

    I haven't checked my score actually because yeah I thought a query after a decline might affect it even further.

• 

  Euphemistic on 28/08/2020 - 10:47

  -1

  When You're Low Income but Have Decent Assets

  Like a waitress with a cute bod and smile?