Rejected on St George Signature Card application - will this impact my credit score or future credit card applications?

Credit Cards & Credit Card Programs
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Are Retirees being discriminated against by St George? If so, they should say so. Other posts show that other older persons are rejected giving rise that St George is discriminatory.

I applied for this card through Point Hacks on 12 July and was rejected instantly by whatever program St George use to assess/screen applications. I have never been rejected for any loan, credit card or loan application before and I have a credit score which places me in the top 5% (or so it told me when I did a check a week ago).

I applied for this credit card because renewal was due on my main Visa credit card which used to have a bank issued companion Amex card attached, which was withdrawn. However, the card fee for the Visa card was $250 with only a 0.5 earning rate per dollar spend – not a good deal.

Ok, my circumstances perhaps are a little unusual, but not that unusual. I am retired (70 plus years of age) with an indexed Government pension for life of nearly $80,000 pa after PAYG tax, own outright our house, have an investment/lifestyle property with an outstanding balance on an investment loan of only $67,000 (equity over $300,000 in the property – it pays its way) and with my wife have around $400,000 sitting idle in savings accounts. We also own over $30,000 of shares. We have no debts other than the small investment property loan. For our stage in life I would see us as comfortable. Our gross income is over $100,000.

My interpretation of what I was told when I enquired about reason for rejection was that their assessment said my living expenses were too high a proportion of my income. Well they are high, but the majority are discretionary (travel, dining, gifts etc). Their assessment does not take this into account, or the substantial readily available moneys we have in reserve (around $400,000) to meet any extraordinary costs. At my age, I am quite happy to spend nearly all the superannuation/pension that comes in, given we have substantial liquid reserves.

I do not bank with St George, so perhaps that was a factor. Or perhaps St George can’t be bothered with the older generation who are retired. After reading some other comments on this website, I see that other older people have faced the same problem.

My real concern (other than the shock and embarrassment of being rejected, which will be a temporary feeling after alleviation by a few good reds) is that now that I have been rejected for a credit card, how will it impact on any future application for a card and my credit rating?

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Hi bob123

I must first claim to not be an expert in this matter. This is my 2 cents.

Unfortunately, the credit card (and potentially other financial products) is a tool for financial institutes to generate revenue. With credit card applications online, it is mostly processed autonatically by a predetermined algorithm (in house calculation from the inputs) and credit score checks. Unlike home loans that banks usually do a more thorough credit check for. It’s all down to how much revenue they have at stake - how much effort they put into the process.

I would personally suggest for you to visit a branch and get a helpful staff to help you with the application in future. They usually have a bit more leeway for the less straight forward applications. E.g. i have friends whose renumeration mostly in commission, not a typical salary.

Unfortunately, age does seem to be a factor in the algorithm ( my guess only). In the bank’s perspective, they want a low risk person. Unfortunately, younger people who just started their work career (started their income generating decades) seems to have the most straight forward application approvals.

Hopefully, a personal visit to the bank would help push you over the line.

Side note: my own parents in another country that has financial stability can’t get a credit card approved since exceeding the age of 60-65.

Good luck. Hope that helps.

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Hi Bob.

Firstly, I don’t think the rejection should be taken personally just because ‘computer says no’. I also doubt that it will have any effect on future applications given your high credit score. I have a feeling that you have caused the ‘computer raised red flag’ issue by unnecessarily including your personal spending ie. travel, gifts etc as ‘living expenses’ thereby reducing your disposable income. Those items are not expenses, they are ‘purchases’ which you choose to make and are nobody’s business but yours. Don’t include them in applications and you may just find the credit card vendors very eager to pedal their wares in your direction . Just my two Bob’s worth

From one Bob to another, best of luck in your retirement.

 

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Thanks Warren and Bofman for your comments and advice.  Much appreciated.

After the “algorithm” rejected my application I did ring St George and the person I spoke to seemed reasonably sympathetic.  Even after shaving  more than a thousand off my monthly “living expenses” estimate and me suggesting I could pay out the balance of the loan so as to reduce the loan repayment to nil, according to the person I spoke to, the algorithm still said no.

Perhaps Bofman is on the ball by saying that perhaps I included too much in “living expenses”, but I would feel uncomfortable if I left out annual payments for health insurance, car and home insurances, car registration, rates etc.  Basically I just looked at my credit card expenditure for a year and divided it by 12 to get my “living expenses” monthly estimate.

Warrens comment about the situation in other countries where elderly people can’t get credit cards is worrying.  Age discrimination in Australia for the purchase of goods and services is illegal in Australia, but as the Royal Commission into financial services and banks has shown, that probably means diddly-squat to the banks.

I can appreciate Warrens point that the younger families etc are seen by the banks as where their future profitability lies, but they wouldn’t be in such a dominant position as they are today if it wasn’t for the older generation who have used and paid for their services over many many years!

I will be away next week with grand kids, but I will scout out a few other cards directly with the branches.

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That card is also the only one I've been rejected for in my while life and I'm still working with an excellent credit score and repayment history... Oh well their loss.

I was looking to put 20-30k on it every month

 

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I applied for this card via the Point Hack link for the reduction of annual fee. After 3-4 days of back and forth I was advised by a call centre (I think in the Philippines or where ever) that I was unsuccessful. I was surprised and I questioned extensively how this could be and what contributed to this decision. They were unhelpful and advised I visit a branch to find out

At 10.30am, I visited the branch and was advised by the staff member that this is not unusual when applying online. With all the same information I lodged the new application at the branch and by 6.30pm I received an email advising me “congratulations, you’re credit card has been approved”, 8 hours after submitting my new application .

Same information, different way of applying.

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Hi Bob123,

My husband and I are self-funded retirees and we too were rejected for the St. George Signature Card last week. We each have a very healthy Super balance from which we draw the minimum amount. We own our own home and have no dependents. In addition to Super I have a large share portfolio and cash in bank.

Like others, we have never been rejected for any credit cards before and so I rang to query the (automated) decision. Initially I was told (by their Philippines centre) that they don’t believe I could service the minimum credit limit of $15,000.  I explained that I have cash surpluses every month and that my cash in bank alone could repay more than 10x the credit amount if I used the maximum limit. The frontline person kept repeating that the system says that I cannot afford the limit. I asked for the matter to be escalated as the reason given didn’t make any sense. I was then told that because I don’t have any credit history with St. George, they are unable to assess my creditworthiness.  At this point I gave up!!!

Just thought you might like to know that you’re not alone. Would be nice if Point Hacks could establish with St. George what their view on retirees is. Is it a case of RETIREES NEED NOT APPLY.  Now our credit file shows that we’ve made a credit card enquiry.

 

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Hi Guys,

thanks for all your comments to my original post and those who have taken an interest in this matter.

I visited a St George branch just to get direct feedback on why my application was rejected.  They suggested I cut my living expenses estimate in half (I had included living expenses for myself and wife)  and said that would meet their criteria.  I advised I did not want to make another application if it was likely to be rejected.   They implied strongly that this card was really only available for existing St George customers and it would help if I moved my main banking to them, and even then I might have to wait a few months.  I was not prepared to do that.  My conclusion is that they were not enthusiastic about signing me up and I do wonder if age was a factor.

I checked out the Westpac offer and they were encouraging, but of course couldn’t/wouldn’t give me any idea of likely success.  I decided to cut my losses and went to see my main bank (NAB) and had a new credit card (NAB Signature Rewards) confirmed by the next day, complete with 90,000 bonus points once I meet the initial spending qualification.  My reluctance to initially apply for this card is that when I reach 75, the overseas travel insurance doesn’t cover medical claims.  So in a couple of years I may be looking  for another card that will take me past 75.

Thanks

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