Applying for a New Credit Card - Which of These Two Tactics Would Work Best?

GOCAT9 on 11/04/2018 - 22:38
Last edited 11/04/2018 - 22:57 by 1 other user

I want to apply for a credit card in my wife's name only so that she can get complimentary travel insurance whilst overseas. Currently, she has (and has never had) no credit cards at all as she uses supplementary cards on my account. She is not employed! To help get her over the line, a few months ago I set up a single account in her name to receive fortnightly rental payments from a tenant (about $300 p.w.). That would give her two last monthly statements showing this regular income. Also, about the same time (at least two statements back). I took $100k from a mortgage offset account in my name and dumped it in her account to make it appear she had some cash reserves etc. If she gets approved for the card, I will rip out that $100K and send back to the offset account. To get approved for the card she needs to be approved for a $6k credit limit.

So my question is: Do you think that there would be any GREATER chance of getting approval if we went into a branch of the bank and did it 'manually' with the help of an agent, or just do it online? Would/could it make a difference?

Financial

Comments

  • [Deactivated] on 11/04/2018 - 22:42
    +7

    complimentary travel insurance

    is crap from credit cards
    just buy it from TID with a discount and youll be sorted.
    this is way to much effort for one thing.

    • kipps on 11/04/2018 - 22:45
      +4

      Please explain why. Last time I compared my cards against TID the only difference was a greater excess on the credit card.

      • [Deactivated] on 11/04/2018 - 22:48
        -8

        isn't your time worth anything?
        i paid $400 per person with winter snow activities with TID.
        id rather spend that then mess around getting my unemployed wife a credit car for the same purpose, remember you'll pay the annual fee on the first months bill anyway.

        • dazweeja on 11/04/2018 - 23:03
          +6

          No annual fee on Bankwest Zero Platinum and has complimentary travel insurance. Why is TID better than Allianz (insurance provider for Bankwest)? Even without winter activities, $100-200 per person is still substantial compared to $0.

        • dcep on 12/04/2018 - 00:06

          @dazweeja:

          flight ticket (or hotel booking if any), needs to be more than $500 to be eligible

        • Franconian on 12/04/2018 - 12:30
          +2

          @phunkydude:
          I would recommend the CBA gold card (minimum) travel insurance. No spend required. To receive all benefits policy needs to be activated prior to travel. I claimed twice which was smooth.First year is free…

        • YellowDieselGolf on 12/04/2018 - 15:24
          +4

          @dazweeja:

          And how much interest has OP had to pay on that $100k in the two months it’s been out of the offset account?

        • dazweeja on 12/04/2018 - 16:12

          @Franconian:

          Good to know as Commbank use Allianz too.

        • dazweeja on 12/04/2018 - 16:15
          +1

          @YellowDieselGolf:

          Probably $500-600. And he said he made $250 interest while it was in the wife's account. So let's say $300 for potentially a lifetime's travel insurance (assuming she doesn't cancel the card).

        • jsb on 29/04/2018 - 21:17

          @YellowDieselGolf: At 4% interest, it will be $333 per month

    • 973728 on 12/04/2018 - 09:26

      Somewhat true. Credit cards tend to depreciate assets based on a monthly amount. Based on my experience and what I've been told this can be 1.75% per month (Bankwest) or 3.5% per month (Citibank*).

      That said, Australian insurance is WAY higher than US or UK and sometimes credit card does the job… Say, if your main reason is for personal injury or repatriation or something. But if skiing, or anything remotely dangerous - go for a specific plan.

      '* Note - they try it on and it is possible to negotiate a higher settlement. They also don't know about how compounded depreciation works and try to multiply the monthly amount by the number of periods (e.g. 24 for 2 years), which is utterly stupid.

    • CLoSeR on 13/04/2018 - 14:24

      Umm no, it depends on the card.

  • SmiTTy on 11/04/2018 - 22:44

    They often require things like pay slip, not just proof of savings.

    Just a point, sorry I'm not sure what would be the best tactic.

    Is it really just for the travel insurance? Not sure that's really worth it is it? Some credit card travel insurances are really lacking anyway… Make sure this one isn't one of them

    • GOCAT9 on 11/04/2018 - 23:13

      I am hoping they just require proof of income, not payslips! Else we can't produce payslips.

      • JimmyF on 11/04/2018 - 23:39
        +4

        Yes…. proof of income…. as in PAYSLIPS or tax returns.

        • ascorbic on 12/04/2018 - 10:39

          Banks will also accept statements showing pay being credited regularly (as direct transfer, not cash deposit), though I assume it would be a lot easier and quicker for the bank to approve with payslips.

        • JimmyF on 12/04/2018 - 11:49

          @ascorbic: but rental income isn't 'income' as such. You still need to take out the outgoings for the rental, so they normally like to see tax returns for your TRUE income.

        • Ti-au on 13/04/2018 - 11:26

          @ascorbic: things are changing - banks are required to prove that the credit provided is within the means of the person receiving it… I guess if they owned an IP, the bank might be able to approve a credit card for a very low amount (but I tend to doubt it).

      • Godric on 12/04/2018 - 06:24

        If her only source of income is rental income you'll be putting on the application that she is unemployed, for rental income they likely want to see bank or rental statements.

        Since i take it the rental statements won't be under her name then… Go ahead do your dodgey

        • JimmyF on 12/04/2018 - 11:51

          Yep….. and $300/week rental income, isn't the same as earning $300/wk. Rental income you have to take out outgoings for rental, and then pay 'tax' on whats left, so that could be closer to $50-100/wk or less.

          I'm 99% sure the bank will knock back this application!

      • StarvingOat on 12/04/2018 - 19:45

        The rent will count as proof of income but it may be hard to convince the bank with her having such a short history of receiving rent and no tax documents. I still don't understand why you just don't get travel insurance instead of some complementary insurance.

  • JimmyF on 11/04/2018 - 22:59
    +40

    You seem to be going to a lot of trouble, to save a few hundred on some travel insurance.

    The extra interest charged to you by taking $100k out of the off set, would have paid for travel insurance alone.

    $100k @ 4% on a loan is about $11/day extra interest. So if it is out of your account for 30 days, you just paid an extra $330 dollars in interest!

    You seem to say you did this two months ago, so thats now $660…..

    So………. you do the math. Was it worth it to save a few dollars on travel insurance?

    • WTF on 11/04/2018 - 23:02
      +6

      Yup - what this guy said.

      Honestly, don't know why the OP went to this much trouble without doing some basic maths first??

      • [Deactivated] on 11/04/2018 - 23:04
        +3

        jimmyf with the numbers, i realised it was waste of time without them.

        • WTF on 11/04/2018 - 23:06
          +1

          Lol - yes I know but jimmyf took it to the next level. When I first read OPs post I was going to give my obligatory WTF???

          :)

        • [Deactivated] on 11/04/2018 - 23:07
          +1

          @WTF: like 90% of the threads here are WTF.

        • WTF on 11/04/2018 - 23:08
          +1

          @tuzii: LOL Yea I know - why do you think i have this username ?

          Honestly so many people are just clueless…

        • [Deactivated] on 11/04/2018 - 23:33

          @WTF:
          must like the geelong cats

        • JimmyF on 11/04/2018 - 23:36

          WTF & Tuzii, I had to add the numbers to make it simple for the OP, but clearly, the OP isn't getting it. Even now, the OP thinks its 'good value' to get the credit card and seems to think a credit card with $80 annual fee, is going to offer travel insurance!

          you can lead a horse to water………

        • [Deactivated] on 11/04/2018 - 23:39

          @JimmyF:

          you can lead a horse to water………

          ive seen a horse drown in water once.

        • JimmyF on 12/04/2018 - 09:20

          @tuzii: Yes, some people here would drown……or should be drowned. Thats for sure!!

        • serpserpserp on 12/04/2018 - 20:43

          @tuzii:

          You mean 98%.

        • Ti-au on 13/04/2018 - 11:31

          @tuzii: ive seen a horse drown in water once.

          :(

      • elgrande on 14/04/2018 - 09:22

        I bet OP purchased the investment property just to assist with his plan for the credit card!

    • dazweeja on 11/04/2018 - 23:06
      +3

      She can keep the card for the rest of her life though (I've never heard of a credit card provider checking income after the card has been issued). That could add up to a lot of travel insurance for the initial $660 outlay.

      • GOCAT9 on 11/04/2018 - 23:17

        Totally correct, she will than have it for life, only have to pay about $80 annual fee, which would be much cheaper than buying insurance for those 3 months on every future O/S trips! The trips are about 3 months each I mean. That would cost quite a bit if buying insurance each time I believe.

        • JimmyF on 11/04/2018 - 23:34
          -3

          hahaha if you think a $80 annual fee credit card comes with travel insurance, you're dreaming!

        • GOCAT9 on 11/04/2018 - 23:37

          Not dreaming JimmyF, 'livinig the dream' is more like it. Its true, check here:!!

          https://www.commbank.com.au/personal/credit-cards/low-rate/g…

        • dazweeja on 11/04/2018 - 23:56
          +2

          @JimmyF:

          My Bankwest Zero Platinum and has complimentary travel insurance from Allianz and no annual fee.

        • JimmyF on 12/04/2018 - 09:21

          @GOCAT9: @dazweeja: Best of luck claiming on that then!

        • dazweeja on 12/04/2018 - 10:58
          +4

          @D C:
          @JimmyF:

          You mean this:

          One of the biggest problems is that credit card travel insurance does not usually allow for pre-existing medical conditions to be taken into account

          Credit card policies often have limited maximum trip duration, provide restricted cancellation cover, no protection in the event of kidnap or political evacuation and little or no death cover.

          I don't have pre-existing conditions, maximum trip duration is 6 months, cancellation cover is unlimited, kidnap cover is $250K and death cover is $25K (for Allianz/Bankwest).

          I also note in the Choice review, it says, "The coverage level is not only comparable to stand alone policies, but often better."

          Looking at the Financial Ombudsman Services page, they don't have Allianz listed for travel insurance but I note that Lloyds who provide the service for TID has five times the chance of a dispute than Zurich that supplies the insurance for ANZ cards for example.

          If there's some actual evidence that retail insurers are better, I'm willing to look at it but it just seems like a bunch of assumptions at this point. No insurance company likes to pay out money. Why would a retail insurer be more willing to do so?

        • D C on 12/04/2018 - 11:29

          @dazweeja:

          You mean this:

          Not just that (excluding pre-existing conditions is common), more like domestic travel isn't covered, low maximum payout and dozens of other 'gotcha's, including oddities like all of the trip must be paid for one the one card. Good luck with that.

          As the SMH article says it's 'Clayton's insurance', the insurance you have when you don't need insurance.

          Perhaps the post should have been "Has anyone ever successfully claimed travel insurance provided by their credit card?"

        • dazweeja on 12/04/2018 - 13:27
          +2

          @D C:

          domestic travel isn't covered, low maximum payout and dozens of other 'gotcha's, including oddities like all of the trip must be paid for one the one card

          I don't buy insurance for domestic travel. Maximum payouts are comparable to retail. I just have to pay $500 of my trip's expenses on my card - a couple of hotels.

          As the SMH article says it's 'Clayton's insurance', the insurance you have when you don't need insurance.

          Choice has a different view, and you linked to that. The "Clayton's insurance" source is LMI Group, the "trusted adviser to the insurance industry".

          I'm curious as to why you think retail providers are more willing to pay out than Zurich or Allianz? They both have the same incentive to not pay out money.

          Personally, I'm not seeing much difference between this and this

        • D C on 12/04/2018 - 14:37

          @dazweeja:

          Choice has a different view

          Not really. The tone of the article is "meh", aka "well, it might be useful". A rating only slightly above describing it as 'Clayton's insurance'.

          I'm not seeing much difference

          Should there be one? Which one underwrites your credit card?

          The essential difference is the card companies offer it as a freebie (which presumably is why you and @OP are so keen on it), so having to fork out cash for a service that has zero revenue is going to be strenuously resisted.

          I really don't care all that much. You're a big boy, if you think a credit cards insurance policy is adequate then use it.

          I actually read the fine print for my card once, I wasn't overly impressed. But hey, it's free and better than nothing, right?

        • dazweeja on 12/04/2018 - 16:28
          +1

          @D C:

          Should there be one?

          One is the popular retail product mentioned here a few times, the other underwrites my card's insurance. As to whether there should be a difference, if the retail provider was offering extra value then I think there should.

          Honestly, vague statements from those in the insurance industry aside, the retail and credit card products seem pretty much the same (with the exception of pre-existing medical conditions and sports cover). It seems like it's mainly an opportunity for retailers to make an easy buck reselling a similar product to that offered by the card providers. I'm quite happy to pay for something that offers extra value but I haven't seen any evidence of that here.

        • D C on 12/04/2018 - 17:28

          @dazweeja:

          Honestly, vague statements from those in the insurance industry aside,…
          …but I haven't seen any evidence of that here.

          Well, read the PDS for the card.

          Here's a random one from Westpac: https://www.westpac.com.au/docs/pdf/pb/credit-cards/consumer…, underwritten by Allianz. I had a quick look, it seems to as about as crap as I remember. "Not your fault you missed a flight? That's too bad", "Missing luggage? Sure, Wait, pay the excess, file a report, provide proof, wait a bit more and we'll still knock you back" etc.

          Contract, compare & complain.

        • dazweeja on 12/04/2018 - 19:19
          +1

          @D C:

          Seems pretty standard. There's 18 accepted reasons that you can claim under for "Unexpected cancellation of travel arrangements". Lodging a claim and providing proof is normal procedure as well. What retail insurance are you comparing this to?

        • playswithfire on 12/04/2018 - 21:36

          You do realise that you only get travel insurance on those cards if you use the cards to book everything on the holiday, right?

          If you don't book anything for the holiday on that card, you don't just magically get travel insurance when you travel.

        • binary01 on 12/04/2018 - 22:16

          @playswithfire:
          I have no comment/experience on the quality of retail vs. credit card complimentary insurance, but this statement is not true for all credit cards. Certainly with CBA platinum+ their is no spend required at all. You simply log in to netbank and fill in the details for the Allianz insurance.

        • D C on 13/04/2018 - 07:36

          @dazweeja:

          What retail insurance are you comparing this to?

          Most of them. For example if you miss your flight is the cost of your accommodation (at your destination) covered? Card? No. Retail? Probably.

          And of course if the insurance provided by the card is so great, why does retail insurance even exist?

        • playswithfire on 13/04/2018 - 11:36

          @binary01:

          Have you tried claiming on it? My parents thought they were covered by CBA's complimentary insurance when they travelled last year, but when they both got sick, the compimentary insurance didn't actually cover them for their doctors visits and medication, as well as the missed flights and accommodation at the next city because they were too sick to fly.

        • binary01 on 13/04/2018 - 13:39

          @playswithfire:
          As I said, I have no experience with any of them. Just stating that no spend is req'd for CBA.
          You must, however, apply for the full cover (complimentary), as the basic automatic cover doesn't cover much.
          I have heard plenty of complaints and compliments for both CC and retail insurance, so it is no wonder people are unsure and sceptical in-general.

    • GOCAT9 on 11/04/2018 - 23:14

      Fair comment!! I am getting a special interest rate of about 2.5% I think on that account during those few month on the $100k.

      • jsb on 29/04/2018 - 22:16

        This is interesting. Would you mind sharing from where you are getting this rate and how? I have 3.64 % rate from Citibank.

    • GOCAT9 on 11/04/2018 - 23:15

      Fair comment!! I am getting a special interest rate of about 2.5% I think on that account during those few month on the $100k.

    • GOCAT9 on 11/04/2018 - 23:24

      My interest is tax deductible which would help lower that 'real'cost!!

      • Moneyneversleeps on 13/04/2018 - 01:09
        -1

        You cannot claim the increase in interest paid as a result in pulling out 100k from offset account. Your pulling that money out for the purpose of funding a new credit card.

        • elcap on 13/04/2018 - 16:30

          are you thinking of a redraw?
          as far as i know, you can do whatever you want with your offset account.

        • Moneyneversleeps on 13/04/2018 - 22:34

          @elcap: yes you can do whatever you want with it but you cannot claim the interest incurred as a tax deductible in this scenario if his pulling out money that is non investment purpose.

        • elcap on 15/04/2018 - 23:12

          @Moneyneversleeps: interesting… thanks for the info :)

        • Bramey on 16/04/2018 - 09:47

          @Moneyneversleeps: That's not true, the offset account isn't classed as part of the loan. If it had've been a redraw then he would not be able to claim a deduction on that portion of the interest. With an offset account you can put money in and take it out for whatever reason you want and it doesn't effect the deductibility of the interest.

    • onetwothreefour on 12/04/2018 - 06:31

      you do the math

      Maths

  • AusGP on 11/04/2018 - 23:19

    Why don't you just apply for AMEX? I think they consider household income from what I heard?

    • GOCAT9 on 11/04/2018 - 23:21

      Thanks RJW for that, good comment. Only problem is that we would have to buy ticket with that AMX card to activate insurance. She often uses FF award tickets, so this would not activate insurance option on AMX I believe.

      • chumlee on 12/04/2018 - 06:58
        +2

        Best you read the T&C's of the credit card you apply for as most travel insurance only applies when you purchase the tickets with the credit card

        • knobbs on 12/04/2018 - 07:26

          The ones that I have been dealing with you just have to spend on the trip a minimum amount. Not necessarily just tickets, so accommodation, car hire, activities all included.

  • Kenb0 on 11/04/2018 - 23:26
    +4

    Umm…if she's using your supplementary credit cards then won't she be covered by the complimentary travel insurance from your cards anyway?

    I could be wrong, but last time I checked, this was the case, specifically with the BankWest platinum mastercard(which sounds like perhaps the card you are trying to get for her). That's why I got my mum a supplementary card off my account so that when she travels(and pays for the trip with the supp BankWest platinum MasterCard), she's covered by the insurance the card offers

    • GOCAT9 on 11/04/2018 - 23:30

      Slight misunderstanding there!! She uses my supp card when she is in Australia only. For her O/S trip, you are correct, she would need her own card. Hence the application question in her name!

      I am not sure that if she purchases the ticket with her supp card then she would be covered. Normally, the primary card holder needs to be travelling with her to get the insurance. I could be wrong, if I am then that is very unusual, have you verified that on PDS?

      • Kenb0 on 12/04/2018 - 00:22
        +7

        It's not unusual at all. As far as I know, all supp cards I've ever applied for my wife, my mum, etc with various providers all behave the same way. If you look at that particular PDS, you'll see that it mentions the "cardholder" is covered and then "cardholder" is defined as including additional cardholders, not just the primary cardholder

        And I've also called up the insurer when it was with zurich(since changed to Allianz) and verified that supp cardholders are covered by the insurance in their own way.

        So, no misunderstanding from me, sounds like you're jumping through hoops for no particular benefit. if she already has a supp card then there's no need for a whole new credit card account in her name if all you're after is for travel insurance to cover her when she's traveling separately.

      • billy3000 on 12/04/2018 - 19:51

        I agree.. make sure you check. my amex doesn't cover my partner who is travelling with me and I am pretty sure my westpac card doesn't cover as well.

    • kingmw on 12/04/2018 - 19:47

      Yep this is correct. She is covered if she is a supplementary cardholder of a credit card with overseas insurance regardless of whether the primary cardholder is there or not. You can read it from the Insurance PDS. Just make sure the insurance is activated prior to travel i.e. minimum spend, return airfares paid with her card etc.

      So don't bother with these plans.

  • teacherer on 11/04/2018 - 23:28
    +8

    This is dumb

    • nocure on 11/04/2018 - 23:36
      +3

      Please show your workings…

      • [Deactivated] on 11/04/2018 - 23:40
        +2

        9+10=21

  • tomsco on 12/04/2018 - 00:16

    If it's anything like a home loan, that would want to see that she can service it. $100k in the bank means nothing because… well banks have been around a long time and people have been trying this trick for almost as long.

  • Iamnotcheap on 12/04/2018 - 05:52
    +2

    Don’t supplement cards give the insurance? Fairly sure you just have to be a named card holder. I know for a fact that the CBA card my parents have do this / mother has a supp card with her name. So when you go through the portal it allows it all to go through and we also callled the hotlines to validate. Haven’t tried myself as the missus and I travel together internationally so she just is covered under mine.

    Edit - realised this was already mentioned. At least for CBA - having a supp card on your name = named card holder. Appears this is common throughout the banks. Just checked westpac as well, and our cards do the same.

  • Baysew on 12/04/2018 - 09:28

    There is no advantage in going to a branch.

    After all, it's the same details that get used no matter where the application is physically completed.

  • pantsparty on 12/04/2018 - 09:31

    Sounds like a lot of work to save a couple of hundred bucks on buying travel insurance

    • GOCAT9 on 12/04/2018 - 09:36
      -1

      Maybe, but isn't that we do here as OZBARGAINERS?

      • boomramada on 12/04/2018 - 10:24

        Ozb usually wait for TID/insureandgo discount code for travel insurance ;)

        • GOCAT9 on 12/04/2018 - 11:16

          maybe, but by far, MOST (not all obviously)
          OZB only travel for a few weeks or less. In this case it is 3 months+ each time. Those long trips would be much more expensive I believe.

      • Ughhh on 12/04/2018 - 10:58

        Thats like driving 1hr to a petrol station save $2 on fuel.

        If you go to a branch, the staff might have an idea if your wife will be approved or not before submitting officially, thus less likely to ruin her credit score.

        If online, probably easier to lie on the numbers. But if not approved, it'll show on her credit score report for other banks to see.

  • [Deactivated] on 12/04/2018 - 10:10
    -1

    "I want to apply for a credit card in my wife's name only"
    You cannot apply for a credit card for someone else.

    • GOCAT9 on 12/04/2018 - 10:16

      Clearly, it (she) will be applying for it in her name only!

  • Seraphin7 on 12/04/2018 - 10:10

    This sounds like an enormous hassle just to get "free" travel insurance. How much as the $100k removed from the offset account cost you in interest? Must be at least $600 over the two months you refer to. How much would the travel insurance be on its own?

    Sounds like there's something other than travel insurance going on here.

    • GOCAT9 on 12/04/2018 - 10:15

      As answered before, the interest 'lost' by removing it from the offset account is tax deductible, secondly, I have already earned $250 in interest (no tax payable!) on the $100k in my wife's account. Also if she get the card she will have it for life and get free travel insurance on EVERY future trip. So there is a insurance saving on EVERY future trip!

      Got to look at the strategic picture, not just the short term!!

      • Cyphar on 12/04/2018 - 12:50
        +1

        I have already earned $250 in interest (no tax payable!) on the $100k in my wife's account.

        Your WIFE has earned that interest. Not you.

        I'm beginning to get the vibe here that you're quite controlling of your wife's spending.

        • Iamnotcheap on 12/04/2018 - 18:41
          +3

          What a false economy… tax deductible savings is not the same. You still cost yourself money… you don’t get a full dollar back… spend a dollar to save 30c on your tax is silly.

          I don’t even want to prove that maths out… as you not even saving…

  • bremo on 12/04/2018 - 11:19
    +3

    If you are so concerned about money, why doesn't your wife go and get a job? One 8 hour shift at your local Coles every week will see her earning $10,000 a year (TAX FREE!!!)

    • Shiny Mew on 12/04/2018 - 21:15

      In my experience, a supermarket won't employ someone (at least someone new) to only work eight hours a week.

  • boomramada on 12/04/2018 - 12:39

    I can see this tread is a more of a laughing matter than anything, how to get a CC without a job?

    CBA for example, having 100k on a bank or few weekly payments don't cut it based on this https://www.commbank.com.au/personal/apply-online/download-p…

    I don't the chances are, but GOOD LUCK, try to scam the banks :)

  • djmm on 12/04/2018 - 12:42
    +2

    OP is the reason why we have Royal banking commission

  • Cyphar on 12/04/2018 - 12:48

    I want to apply for a credit card in my wife's name only so that she can get complimentary travel insurance whilst overseas.

    Wouldnt it be cheaper just to get a proper annual multi-trip policy?

    • GOCAT9 on 12/04/2018 - 15:33
      -2

      If you can get that for no more than the $89 annual fee, then yes, but good luck with that!!

  • sw0rdy on 12/04/2018 - 12:49
    +2

    These ozb 'finance' threads are getting more and more bizarre…

    There is another factor to keep in mind… Has she ever held credit in her name? In the past 5 years)? Whilst you might be trying to pull the wool over the lender's eyes they will still check her credit history… What's her credit score? If you don't know, I would suggest finding out.

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