Older Australians being refused access to credit cards

I guess the the challenge has been an unintended consequence of the the good reform that came about in the the banking and insurance royal Commission back in 2018. Some good work happened, but what’s happened is that because of responsible lending rules that came into place, folk who are I guess on fixed incomes, in particular they have retired, are finding it very challenging to be able to get credit cards and in particular those that I guess a second want a secondary card. That’s proving to be a challenge and I guess it’s become more an acute issue because of this this relentless drive now to a cashless society is that you know people being forced to use debit and credit cards and and The thing is that you know that some folk just can’t simply do it because they’ve got they’ve gone past retirement age and and I guess that that they wish they knew much earlier and got their affairs in order and got credit before before they retired and some of these people don’t have any credit history correct. And and that’s the that’s the unfortunate pieces that they’ve they’ve saved hard. They’ve I guess accumulated money over a period of time. But there there’s some things that retirees, any retirees want to do they want to travel and The thing is that hotels car hire you, you they won’t accept cash payment sort of thing. That’s very difficult. They want some sort of insurity, they won’t accept a debit card. They require a credit card. And The thing is that if you’ve got somebody who who hasn’t had to use a credit card before and need a credit card because they pay for them in cash and then have to sort of use it for these purposes and the and the bank won’t lend it to them, it’s it’s somewhat problematic. So how can this be addressed? I guess importantly is that you know and we’re not advocating to for you know, people to go out and get credit this, this is not the point. But I guess what we’re trying to do is we’re trying to make people who are in that retirement phase of their life, that pre retirement phase, well, they’re still accumulating I suppose you could say to sort of make sure that they get themselves a credit card, make arrangements to do that and and think about their partner, their spouse as well at this process at the same time. So you know that unfortunately there’s a there’s gonna be a cohort of those that sort of it’s not gonna be a a problem that can be fixed. But how do we think about the people who are coming down down the track in terms of their retirement and I suppose create a better outcome for it because with the cashless challenges at the moment it’s something that we’ve we’ve got to do better going forward. And have you approached the banks on this You’ve talked about how older people can prepare themselves to this but what about the other side of the coin? No pun intended the the banks approach to dealing with people who might who might not have a credit history but but it should be worthwhile for them and to get a credit card. Yes, I mean typically we know we’re not sort of the first ones to jump in and and give a bouquet to the banking industry. However their hands are somewhat tied from the point of view that there’s this the regulator, you know they have to apply responsible banking and and responsible lending and that’s where someone has to be able to demonstrate that within a they can clear the credit card debt within a three-year period. So, so the the banks are somewhat, you know they’re constrained in what they can do obviously that they do their best to try and support customers, but that’s that’s the law and they’ve got to follow that law and I guess that that’s one positive outcome from the banking and insurance royal Commission. So a big tick on that. But The thing is that that, you know that going forward, they’re just, they’ve got to do what the law says. And and that means that you’ve got a lot of folk who are, I guess, in unintended disadvantage from from that process. Yeah. And I guess that you want to ensure in this process too, that older people don’t get caught in online scams, too, in getting the card and also using it, because there are so many stories, heartbreaking stories about that at the moment. And that’s something that we’re going to have to be careful about with pushing older people into things like credit cards. Exactly, Joe. And I guess that’s all part of this, you know, what’s been, you know, framed up as, you know, cashless society sort of thing and the removal of cash. But there’s a number of things within the financial system at the moment that are creating a bit of a perfect storm. So you’ve got the removal of checks in 20-30, but that’s happening right now. You’ve got the removal of access to cash or being able to use cash. And then you’ve got also these challenges around the being able to, you know, get a credit card or use credit card and then if you actually can use a card, you charged a fee for the for the privilege to be able to do it as well. So they’re being hammered on all fronts at the moment and and I guess it’s it’s something that you know, we need to keep cash in circulation. That’s an incredibly important thing. Yes, except the digital transactions are the way of the future. Yes, of course, but it they must coexist with cash and and we have to look and make sure that in particular the older cohort and the more vulnerable in society have the way in which to be able to freely transact on a day-to-day basis.