Credit card applications for pension cardholders - The ultimate guide

Credit card applications for pension cardholders (The ultimate guide)

  • Find out what kind of pensions are eligible.
  • All usual eligibility criteria are still at play.
  • The Age Discrimination Act 2004 prohibits age discrimination in financial services, so feel confident that age is not a grounds for being rejected. 

Although your income as a pensioner may be limited, you can still successfully apply for a credit card as long as you choose one for which you meet the eligibility criteria. Most Australian banks have several credit cards suitable for pensioners, but the approval process may be a little more complicated than it is for someone with a job and a regular salary.

For a quick guide to the range of credit cards available to pensioners, visit our Pensioner Credit Cards page.

But this is not an exhaustive list, and you’ll find that all the major banks will have several cards that are suitable for pensioners, while most smaller banks and credit unions will have at least one.

The following table lists cards that we have established are definitely available to pensioners.

Card issuerCards available to pensionersEligible pension types
ANZAll cards (except ANZ First Student Credit Card), including premium rewards and frequent flyer cardsMost pension types
Bank of MelbourneAll cardsMost pension types
BankSAAll cardsMost pension types
BankwestAll cardsAge pension
CitiAll cards except Emirates Citi World MastercardMost pension types
HSBCAll cards except HSBC Premier World MatercardMost pension types
LatitudeAll cards except 28 Degrees Platinum Mastercard & Latitude Infinity Rewards CardMost pension types
NABAll cardsMost pension types
St. GeorgeAll cardsMost pension types
Qantas MoneyAll cardsMost pension types
Virgin MoneyAll cardsMost pension types
WestpacAll cardsMost pension types

However, just because a bank or a specific card is not mentioned here, it doesn’t mean your application will not succeed. 

If you have set your heart on a particular card, even if it’s one mentioned above as an exception, you may still be able to apply for it successfully, despite relying on a pension for your income. 

Simply call the bank to enquire before you make your application, to avoid having a rejected application appearing in your credit history. 

Which kinds of pension are eligible?

Disabled-pension

‘Most pension types’ in the table above includes Age Pension, Disability Pension, Veteran's Pension and Widow’s or Widower's Pension.

Some banks, such as Bankwest, only mention the Age Pension, but may – if you enquire further – accept other pension and income types, including a Carer’s Pension, Disability Pension, Parenting Payments and Family Tax Benefits.

A small number of cards will specify certain types of pension or allowance which they will definitely exclude from your income when calculating eligibility. The Bank of Melbourne, for example, says that Austudy, Carer's Allowance, Child Support Payments and Foster Care Allowance are not acceptable.  

HSBC, NAB and Virgin Money specifically include Overseas Pensions in their eligibility criteria.

And once again, just because your pension type is not mentioned in a card’s eligibility criteria, it doesn’t mean your application will not succeed – call the card issuer to check before applying.

Other eligibility requirements

Carers-pension

Every credit card has minimum eligibility requirements that applicants must meet in order to be considered as a cardholder. The Credit Card Compare website lists each card’s eligibility criteria. 

When you find a card you are interested in, click on the blue ‘More info’ button at the bottom left (beneath the card’s summary details) and then click ‘Eligibility’ at the far right.

The kinds of eligibility requirements you may see include:

Age

You must be over 18, a condition which most pension recipients will meet.

Citizenship or residency

You must be either a citizen of Australia, or hold an Australian residency visa.

Good credit history

Some cards specify that you must have a good credit history in order to qualify. Check your credit score using our free tool, to get a good indication of whether the card issuer is likely to consider that you have a good credit history. (Any score over 624 is regarded as ‘Good’.)

No multiple applications recently

Seniors signing documents

Remember the recommendation that you check with the bank before applying if you don’t see your pension type mentioned? That’s because card issuers get nervous if they see that you applied for another credit card not long ago and were rejected. But they also don’t like to see that you’ve applied for lots of cards recently. So don’t use the spray gun approach. Choose your ideal card, apply for it and await the result.

Minimum income

Basic cards with no rewards points or complimentary benefits may not specify a minimum annual income for cardholders, or may mention that they are prepared to accept an income as low as $15,000 or $20,000 p.a. Premium and prestige cards will have much higher income requirements. If you can’t satisfy the minimum income requirement you are unlikely to get approved.

Your income may come from a variety of sources – your Centrelink pension, superannuation or overseas pension, rental income, bank interest or other investment income, even a part-time job – but it’s probably going to be more difficult for you to prove your income than it is for a full-time wage or salary earner, simply because you can’t back up a big chunk of your income with payslips or a letter from your employer.

So you may need to provide a statement from Centrelink or your superannuation fund to establish the amount of your pension income. If you are a self-funded retiree, you’ll need a statement from a fund trustee – which may in fact be you, but you can still make a formal statement confirming the pension amount in a letter addressed to the bank or ‘To whom it may concern’, signing it as a fund trustee. If you have income from rental property, the real estate company acting as your managing agent should be able to give you a letter confirming the amount.

Owning your home or other substantial assets, or having a sizeable balance in your superannuation account, should go a long way towards convincing the bank that you are a good credit risk, able to repay any debts you may incur.

What kinds of credit cards are available to pensioners?

Grandma showing photo album

Pensioners will find that they have options amongst all kinds of credit cards. Available types include:

  • Low or no annual fee cards (but don’t overlook other fees which may be payable).

  • Low interest rate credit cards (but incurring credit card debt you can’t afford to repay is risky if you’re on a low income).

  • Cards offering rewards points and frequent flyer points which often have other complimentary benefits attached, more than offsetting the higher annual fee, and which may be suitable for affluent self-funded retirees.

  • Cards with an introductory zero-interest balance transfer offer which can help with debt consolidation, and save on interest while giving you time to repay your debt.

  • Cards with an introductory low interest rate on purchases, which can also be risky if you’re tempted to spend more than you can afford to repay once the offer expires

Are all credit cards suitable for pensioners?

Elderly couple on swing

The kind of credit card best suited to you will depend on your income level, lifestyle and spending pattern.

Some pensioners may be looking for a low-cost, no frills option, just for payment convenience, monthly interest-free days and emergency access to cash (e.g. for medical expenses, utility bills, car repairs, funeral expenses). Their best option will be a card with a low or no annual fee

It’s even possible to earn rewards points without paying an annual fee, if you choose, for example, the Coles No Annual Fee Mastercard. You’ll earn extra flybuys points, to add to the ones you may already be earning at Coles, Target and Kmart.

Other pensioners may be cashed-up self-funded retirees enjoying an affluent lifestyle involving travel, eating out and regular shopping trips. They could derive heaps of benefits from a premium rewards or frequent flyer card.

Pensioners are not limited to applying to their current bank

Though it may be easier to apply to a bank or credit union where you have an existing relationship, they may not offer a card you qualify for, or the type of card you want. You can apply for a credit card from any issuer who accepts pensions as qualifying income. Card repayments can usually be made via online banking, or at Australia Post outlets.

What are the minimum and maximum credit limits for pensioners?

Elderly using credit card

The card issuer will allocate an initial credit limit based on their assessment of your income and creditworthiness, not the fact that you are a pensioner. Some cards allow credit limits as low as $500. Others have limits up to $100,000 or more. 

If you feel that the credit limit you are being offered is much too high for your needs, and that you would feel more comfortable if it were reduced, you can ask for a limit lower than the one offered. You can also apply for a higher limit after you have had the card for a while – say a year – and demonstrated your ability to repay in full and on time.

Security

Although you may have heard horror stories of people ending up seriously out of pocket as a result of credit card fraud, these are largely urban myths or a product of the cardholder’s own extreme carelessness. 

In practice, all major credit card issuers are constantly monitoring for fraudulent activity and also have a ‘no liability guarantee’, which protects card users from the consequences of fraud that were not their own fault.

The card issuer will usually give you a full refund in the event that your card is used fraudulently, provided you follow a few simple rules:

  • Keep your credit card in a safe place, such as your wallet.

  • Inform the card issuer immediately if your card is lost or stolen.

  • Memorise your PIN, or keep a record of it in a safe place that is completely separate from where you keep your card.

  • Do not divulge your PIN to anyone, including on the phone, by email or on social media, even if they say they are employed by your card issuer.

  • Inform the card issuer immediately if you do see any purchases on your credit card statement that were not authorised by you.

Follow these rules and you will be protected for both in-store and online shopping, and even against unauthorised use for PIN-free tap-and-go transactions under $100.

Age discrimination

Elderly writing at her desk

The Age Discrimination Act 2004 prohibits age discrimination in financial services, so age pensioners can be confident that they are not facing unfair or unlawful prejudice on account of their age when they apply for a credit card. 

But the fact remains that pensioners of all ages may still face more limited options when it comes to credit cards, simply because of their income source or amount. This makes it even more important for them than it is for the average person, to take care when doing credit card research, making comparisons and choices, and finally applying..

Improve your chances of approval

Pension cardholders can improve their chances of being approved for their chosen card by first of all paying attention to their credit history and getting a free copy of their credit report once a year. Check the report and take steps to have any incorrect information removed or corrected.

Then check your credit score regularly by using our free credit score tool. Sudden large and unexplained changes in your credit score may be an indication that there is something wrong in your credit report.

Choose one card to apply for, rather than applying for several at the same time, to avoid damaging your credit score.

Check the card’s eligibility requirements to make sure that you qualify, and make further enquiries with the card issuer if your pension type is not listed as acceptable.

Before you apply, assemble all the documents you think you will need, and then click the card’s green ‘Application’ button on our website, to begin what will hopefully be a speedy approval process.

Impress your grandchildren

Granddaughter teaches how to game

All pensioners can benefit from the payment convenience and other potential perks (such as rewards points, complimentary insurance, and other travel and shopping benefits) that come with a credit card.

And who says pensioners aren’t tech savvy? Get a card compatible with Apple Pay, Google Pay, or Samsung Pay, and next time you take your grandchildren shopping or to the movies, pay using your smartphone and enjoy watching their jaws drop.

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