Close Credit Cards? No Longer Employed

Dyl on 01/04/2025 - 16:23
Last edited 01/04/2025 - 16:41

Situation:

  • Citibank Premier Qantas ($350/year) with a 15k limit and AMEX Qantas Ultimate ($450/year) with a 4K limit.
  • Always pay off in full monthly, never paid interest.
  • I make use of the AMEX travel credit ($450) to compensate the $450 fee of the AMEX
    Have the income (Centrelink DSP + ~$20k/year from investments + extensive savings, total ~$45k/year after tax) to apply for most low limit cards ($30k before tax required).

Advantages I can see:
* Can potentially churn low limit ($1000) credit cards as they only require ~$30k income
* No annual fees (currently

Cons I can see::
* No points / rewards earnt on spend (including reimbursable costs)
* Unable to delay reimbursable transactions (such as NDIS spend) using card interest free period (not a biggy - i have enough cash savings to cover it)
* No $450 flight credit (though this only covers the fee)
* Lose citibank 5% back on Trip.com flights
* Lose airport lounge access vouchers (2 each card/year)
* Lose free insurance (crappy travel insurance, decent purchase protection, decent phone insurance)
* No access to targeted offers

Options:
Close 1 or both cards, the churn or not churn other low limit cards. Could also switch my AMEX to their card to make the credit easier to use, or another card which has better buyer protection insurance.

Thinking of closing the Citibank as the benefits suck for the fee, but would lose $15k of usable credit. Don't overly need it though with my available cash savings.

Edit: Note I retired after a workplace injury, was on a decent salary churning cards that require $75k+ income regularly when working.

Poll Options

  • 20
    Keep all cards open
  • 4
    Close Citibank card
  • 1
    Switch AMEX
  • 1
    Close all cards, churn low limit cards
  • 38
    Close all cards, don't churn
Financial Credit Card

Comments

    • spackbace on 01/04/2025 - 16:36
      +16

      Copilot is happy to help refine the plan further!

      Well done

    • Dyl on 01/04/2025 - 16:38
      -1

      Yeah 1. is what i'm thinking - the credit I either use or sell to family for ~$50 off. The only issue is that card doesn't have AMEX's buyers protection insurance (double warranty, up to 1 year) where if I switched to their lowest available card ($9/mo or $99/year) I have this. It provides free extended warranty.

    • Dyl on 01/04/2025 - 16:39

      This was AI right btw? Basically the same response AI gave

    • bargaino on 01/04/2025 - 17:57
      -5

      Well done.
      Some questions are worth posting because they spark interesting conversation, even though an AI could easily answer it. This is not one of those questions.

      But if we start "let me GPT that for you", there will not be many questions left. Stack-exchange is dying because Grok/gemini etc can answer tech questions better than any human. Lets hope Reddit follows.

      • mskeggs on 01/04/2025 - 18:30
        +1

        You think that AI response was better than a person could produce?

      • Loopholio on 02/04/2025 - 08:59
        +1

        If Reddit dies so will Google search. If I don't put reddit at the end of a search my screen is filled with useless shit.

      • SlickMick on 02/04/2025 - 09:51
        +2

        I add &udm=14 to google searches to avoid the rubbish it adds before the search results.

        The only reason for chats like this is to get human perspectives. Posting AI responses in here is less than useless. The OP would have already done that if that's what they wanted.

        • Loopholio on 02/04/2025 - 22:48

          Thanks, that works. :)

  • mskeggs on 01/04/2025 - 16:35
    +17

    No point posting questions here. You just get AI responses these days.

    • askbargain on 01/04/2025 - 16:37
      +3

      Only AI cares enough to type out a response.

  • tonester on 01/04/2025 - 16:37
    +14

    remember that one generally needs an income (statement/payment summary) to be given a credit card, but not to keep it - hence retirees and similar should never cancel cards which have no annual fees, and conversely, apply for them before such income is permanently reduced

    • Dyl on 01/04/2025 - 16:40

      Yeah this is also a huge consideration, if I ever did need it I have up to 19k credit.

      Can't see a situation where i would need it though as I have cash savings available too

      • tonester on 01/04/2025 - 16:44

        though cost $800/yr - it's unfortunate that you don't have any zero fee cards such as Bankwest Zero Platinum :(

      • SlickMick on 02/04/2025 - 09:55

        I wouldn't see any reason to cancel free creditcards - they're handy to have under some circumstances e.g. hotels.

        I'd never pay a fee for a creditcard, but if rewards > cost than no need to cancel.

        I would never pay interest on a creditcard. If you were tempted to do that, I would cancel them.

        • Dyl on 02/04/2025 - 10:06
          +3

          I ended up switching to citibank's fee free card and kept the 15k limit, they allowed this in a 5min phone call with no credit checks or questions about income.

  • GordonD on 01/04/2025 - 17:06

    I kept the credit card that had the big fat 20K credit limit and no annual fee, just in case, you never know.

    After a while I got hints they were closing it because I wasn't using it. So I used it by having things billed to that, then paying off the balance each month immediately I got the statement.

    Then it turned out to be useful to have that account to use to do something when my other bank was being annoying, and for other reasons for another bank already know me.

  • ihbh on 01/04/2025 - 17:07
    +4

    Keep as many 0 fee ones as you can.

    After you retire, it's very hard to get new cards without employment income. You'll need tax returns, etc, and hopefully that will show some passive income above the required threshold.

    • Dyl on 01/04/2025 - 17:27
      +1

      Yeah was thinking of looking if I can switch the Citi to a lower fee variant and keep my15k limit

  • Dyl on 01/04/2025 - 18:01
    +2

    Ended up downgrading citibank to a fee free card, I lose travel insurance and priority pass. Kept same credit limit, process was easy (simple phone call)

    Travel insurance is useless to me and priority pass is only £20 on dragonpass (free) for the same lounges on other apps so $80 loss assuming I don't use extra deals for lounge access.

    The American Express non-qantas equivalent of my card only includes access to a lounge in MEL and SYD, no where else. Better off keeping as Qantas so I can use international lounges still sometimes.

  • JIMB0 on 01/04/2025 - 20:02

    Are you sure they'll give you credit without a job?

    • Dyl on 01/04/2025 - 20:11
      +2

      They're more cautious and usually request statements showing spending habits + ask about any other loans. If you have ANY other loan or have used anything like Afterpay it would be instantly denied.

      Essentially in the event of it becoming a recoverable debt, they're entitled to 20% of your centrelink benefits until paid off, so it's actually quite safe as long as they don't have multiple lines of credit. Hence requesting bank statements, denying users of Afterpay, etc. As long as it's their only line of credit (ie they can recover the full 20% fortnightly and not need to share with other debtors) it's actually very safe to lend to people on DSP due to being able to simply submit a claim for 20% of their pension if it came to that; no need to fight or sell the debt for cheaper than it's worth.

      I wouldn't get one currently as I have $19,000 of credit cards already - they would look at that and instantly deny it.

      I did apply for a Commbank one and they phoned offering me one if I close my other cards, I declined at that time.

  • Pumpkin_rrr on 02/04/2025 - 09:46
    +2

    I sillyly forgot to get more Credit Cards before i stopped work. Altho I am Asset-rich, but don't have enough income. (I'm going to look at how to create income stream from my Super)

    My point is, do not get rid of your Credit Cards. You can downgrade those that you won't want to upgrade later.

    • Dyl on 02/04/2025 - 09:51

      Yeah decided to switch it to a fee free one but keep the 15k credit limit on it

      Similar situation - lots of liquidate assets but no solid income stream beyond DSP.

      My secondary income stream is selling shares every few months as they go up / at the highs, so it's not guaranteed but long term I'll get ~10%.

      I would setup a super income stream in your case if you're off work due to incapacity, then just keep recontributing it. Also look into if it's more beneficial to put into your spouses (if applicable) and claim a tax deduction etc.

    • netjock on 02/04/2025 - 11:10

      Altho I am Asset-rich, but don't have enough income. (I'm going to look at how to create income stream from my Super)

      Did you get stuck holding too much investment property that isn't yielding enough?

  • Cluster on 02/04/2025 - 11:23

    You're unlikely to qualify for any new credit cards with decent limits, so you're in a bit of a bind. Keep paying $800/year? Very expensive. But if you close the cards you'll never get a $15k card again

    • Dyl on 02/04/2025 - 11:24

      Ended up lowering the citibank to a $0 card, amex no longer has $0 options so going to reconsider what to do with it

      • askbargain on 02/04/2025 - 14:43

        Ask your children to be a supplementary cardholder

        • Dyl on 02/04/2025 - 14:43

          No children… But why..?

          Workplace injury, not retirement age

          • askbargain on 02/04/2025 - 22:44

            @Dyl: You get their card insurance. Maybe a spouse or close friend?

  • Foggy Fluoride Stare on 03/04/2025 - 10:30

    Close all cards if you can become an additional supplementary on someone else's card.

    Harder said than done though.

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