I got approved for a home loan about 1 month ago from a bank. After the loan settlement went through i went to my local branch to apply for a credit card to use with my offset account. The banking specialist there offered me their top range card with a minimum $15000 credit limit despite my salary not even being enough for the offer. he then offered me the card with the $6000 credit limit, but even so, my income after my mortgage repayments would not suffice to afford repayments. nevertheless he applied for me and the card low and behold it got rejected. is it the banking specialists obligation to offer me suitable products not unrealistic products that are bound to be declined? ive learnt a good lesson here, but any leg to stand on in getting reassessed for a more suitable credit card based on my financial circumstances? arent "banking specialists" supposed to offer a product that have a chance of getting approved?
Declined Credit Card Application, What Are My Options?
Comments
the card is mainly for business expenses to keep cash in the offset account for the 55 days
Shouldn't you be applying for a business credit card in this case?
Also, you need to be thinking about how many times you want to hit your credit score. Each individual application is another credit check on top of the one you've completed for your home loan and now your declined credit card applicationwasnt aware that there are business credit cards
Have you looked at the FBT for doing such a thing?
They can't reject you from applying, they submitted an application that was 'most suited' for your use case and ended up declined, move on.
is a CC with 6k limit really "suitable" when my income is less than 6k/ month before mortgage,expenses,tax,super?
So why didn't you ask for a lower limit than 6K? Maybe 2K?
the product offered had a minimum credit limit of 6k, i wasnt offered any credit cards with a lower credit limit, im guessing commission is not as good on those
@globalmurphy: Did you ask if there were any alternative products with a lower limit?
is a CC with 6k limit really "suitable" when my income is less than 6k/ month before mortgage,expenses,tax,super?
Did you ask this at the time?
@DashCam AKA Rolts: being time poor with running a business, my assumption was that seeing a local banking specialist would make the application process more efficient and offer me a suitable product for my needs. i hadnt researched prior what products i would be eligible for. if i had the time i would apply online and do it myself
@globalmurphy: I didn't read the report on the royal commission, TLDR. this is my impression of the banking royal commission: a lot of people had the same mentality - "the specialist knows best".
in my perspective, this mentality is just outright complacent and a pure recipe for disaster. There is always a conflict of interests between his quotas/commissions vs your actual financial needs.
It's your own due diligence to determine which product suits you best annual fees, interests, your ability to pay back, because you are the one signing the papers. The specialist can paint a rosy picture, but you are the one saddled with debt and slogging yourself off. I'm a HCW too, the conversations during lunchtime make me cringe. here's my impression of my own colleagues: a lot of singles are living from one paycheck to another paycheck. Afterpay appears to be their saviour.
NFC is convenient. Do you really need a credit card just for the convenience? Not many people can manage their credit cards well.
Credit card points are hot potatoes on OzB. I wonder how many people accidentally fell into the debt trap when chasing after credit card points?
Think hard about how you want your financial future to be.
End of rant.
@AirbusA389: i mean isnt that why they have a job, to be the specialist in their field? does that mean i dont trust my heart surgeon and i go research the surgical techniques and best practice medicine and tell my doctor whats best for me? i pay my surgeon for their specialized opinion and their expertise, i do not pay them for their opinion and then have to go home and research unsuitable managements for my condition. at the very least, a suitable product/service/treatment is the crux of their profession. if they cant handle that very basic aspect of their job, are they the right candidate for their job, how many more unsuitable financial products will they offer before someone goes into financial hardship, or worse loss of business/home/family
@globalmurphy: banking specialist is a specialist at selling the credit cards to meet his quotas. How he sells his cards is secondary to meeting his quota. It's a very hyped up job. He doesn't have the legal responsibility to tell you how to manage your finances and your spending. You bear the consequences of your decisions and actions.
in medicine, you can always seek second opinion for medical advice. No reasons needed.
If the surgeon messed up, you also bear the consequences of your decision to go ahead with the surgery. It takes ages to navigate through the courts for such legal cases. The truth is usually buried anyways.
I would encourage you to take responsibility of your fact-finding processes and decision-making. You seemed to be looking for a non-existent paternalistic credit card salesman.
@AirbusA389: each profession has their own honest and dishonest personnel, regardless of kpis. how they chose to navigate the fine line of honesty vs achieving quotas is their choice, but ultimately it affects their performance. unfortunately honesty is not as highly regarded as profits, so many choose performance over loyalty of customers. and usually these business dont have repeat customers and inevitably fail.
@AirbusA389: 1) i need a credit card to maximize my offset account
2) everyone knows their own spending habits, i have $400 monthly living expenses, $20 business expenses i think i wont fall into debt on a 6k credit card
3) compare apples with apples, using a card for business purposes is different to churning cards for points, each to their own
4) i think a credit card to hold cash for as long as possible in the offset will not signifcantly impact my "financial future"@globalmurphy: wells, that's idealistic to me…. i'm a jaded old fraying rag who's tired of all the dishonesty.
It would be interesting to see how a credit card can maximise your offset account.. i have an offset account (2.96%) too. Can you show me the calculations without revealing your personal finances?
@AirbusA389: expenses per month roughly $1500, resulting in an interest saving of approx $500 per year based on an interest rate of 2.75%.
@globalmurphy: I'm going to assume that your $500 savings has taken credit card annual fees into consideration. The numbers in this entire thread doesn't add up though.
$500 per year isn't enough to motivate me to risk the late payment fees and interests if i forgot to pay. That's me the lazy jaded fraying old rag….
YMMV
@AirbusA389: the annual credit card fee is waived by the bank because i have an offset account package with them, so this $500 saving actually balances the offset account fee and more (worth it in my opinion). i also use the card for PAYG
the annual credit card fee is waived by the bank because i have an offset account package with them,
So you have the package, but do not qualify for the credit card? How come you have to apply for the cc separately if its part of the package? My cc came before they sent my refinance contract.
@globalmurphy: Do you mean you use the cc to pay your PAYG tax? I didn't know you could do that. Are there extra fees?
@globalmurphy: how are you saving $500 per year?
you would need to have over 18k on your credit card at all times to get a saving of $500 for the year.
it looks like you have calculated based on $1500 x 0.0275 * 12, but the actual calculation would be $1500 x 0.0275 = $41.25 savings for the year
I think the bank is in the habit of suggesting the product they will make the most profit out of, than the one that is most suitable. How much are your monthly business expenses? Apply for a card with limit that covers that.
yea i think so too, ill have a chat with their "specialist" tomorrow
@globalmurphy: Just FYI (small business owner here) - most business credit cards for a small business are assessed largely in the same way as a personal credit card.
They will still assess your personal income/expenses.
What are you left with after tax mortgate and super?
A lot of the black level cards with ~15k limits from the banks used to specify a minimum income of ~70k. 6k a month is 72k a year so yeah a 6k limit doesn't seem like something out of the realm of possibility depending on your personal circumstances.
I read somewhere a few days ago that banks were winding back their credit card offers and reassessing their approval criteria, particularly in relation to applicants who work in the retail and similar industries.
I'm not sure if this is impacting you in anyway.
Have you got any other credit cards? If you have, your chances of approval are higher if you close off the other accounts first (no guarantees though).
nope no credit cards, cancelled them before my loan application. Im a healthcare worker
I guess your only other option would be to get a low rate card with a low limit in case of emergencies. Or a debit visa card where you're spending your own money.
i have a debit visa card with the bank, but they do not offer smart phone payments through nfc so they offered me the option of a credit card to use nfc payments
Yep, the big non-bank CC providers have stopped taking new applications, think Woolies and the like
Macquarie Bank paused all new CC applications, including Woolworths, Myer and its own.
Get a debit visa/MC and link it to your offset, that's your option.
already have one, but no nfc payments with debit card
The banking specialist there offered me their top range card with a minimum $15000 credit limit despite my salary not even being enough for the offer. he then offered me the card with the $6000 credit limit, but even so, my income after my mortgage repayments would not suffice to afford repayments.
If you don't meet the minimum requirements for a credit card, then you won't be approved. They are lending you money after all…
Why a credit card and not just use a visa/MC debit card? If the cash is sitting in the acct. already, I don't see why that can't be an option for you
need nfc payments, the debit card doesnt have that capability yet (small bank)
Oh damn. Even my own local credit union has NFC. Fair enough though.
Unsure why I'm getting negged though. It's a legitimate fix for most banks :/
Retail staff has KPIs. They will try to sell you the top of the line if they can. Best is to go in there and double check everything you are applying for. (Remember the case of the couple who are illiterate and ended up with what they thought was a P&I loan when it was really a interest only loan).
Unfortunate now you might have a slight drop to your credit score. You could potentially go for cards with lower income requirements or wait for 3 months and apply for another card.
Card issuers ask 100 annoying questions these days. Just applied for ANZ card and they annoyed the crap out of me asking please supply letter advising previous card closed (sent them notification of closure letter then they wanted a formal closure letter). Poked around my home loan balances, not being able to see one of them is half paid with a lump sum on redraw.
OP….the Lending Specialist gave you an option. But it was you that applied.
You knew it was too much for you yet you signed to apply…why?
Don't blame the Lending Specialist.
You are at fault.
99.9% of irresponsible lending is actually irresponsible borrowing.
Thank the bank…. they just saved you from a big mistake.
the lending specialist offering an unsuitable product is my fault? why are banking specialists in a job if all they do is regurgitate information off their website. i would think they have a responsibility to offer me a suitable product FIRST before i make a decision on which suitable product im interested in, after all they are the specialists not me, how would i make a 'correct' decision off incorrect and unsuitable products offered in the first place? lets be honest, the bank saved me from nothing, i have $20 expenses per month
i have $20 expenses per month
Yet can't service a max ~$300 monthly repayment. (Based off a $6k limit).
You knew you couldn't afford to make payments on a $15k or $6k balance yet you signed on the line to apply.
There is no blaming anyone else for this.
Take responsibility of it instead of wanting some sort of redress.
The Lending specialist is there to present you with products that his bank provides, he is not there to give you financial advice.
You are lucky this was a very cheap lesson.
Imagine how bad it could have been when a person of this calibre is granted a credit card of $6k.
I think your analogy that you made in one of earlier replies is right on the mark.
i pay my surgeon for their specialized opinion and their expertise, i do not pay them for their opinion and then have to go home and research unsuitable managements for my condition. at the very least, a suitable product/service/treatment is the crux of their profession
In this case its the bank and not you that is paying the banking specialist, and they are using their expertise to make money for the bank and by extension for them self by achieving their targets set by their employers.
Banking specialist is the one who knows the features of banking products, they can recommend you a product based on the info you provided but this doesn’t mean you’ll definitely be approved for the product. Just like home loan lending specialist would say you’re eligible for x amount of mortgage, and usually you’d end up be approved for x-n loan amount.
I think the general regulatory rule is that bank can’t sell you unsuitable products. Don’t think the bank breaks the rule here also you seemed to know your application was risky and you decided to go ahead.
Im a little confused though
How can one get a home loan but not a credit card?
Just get a BASIC Credit card with $3,000 limit
The banking specialist obviously is just a pen pusher and nothing more.
They are specialists in knowing the banks products, taking applications and then sending them to be assessed.
You are probably better off reviewing ALL credit card options on the market
@globalmurphy, I think you might be confusing the bank specialist with a financial adviser. The bank specialist is there to sell you a product not advise you what you can and can’t afford, they work for the bank not for you. You need to tell them what product you want and they’ll tell you whether they can provide you with that product.
What are you planning to use the card for? Having a new mortgage, the current climate, and not being able to afford the repayments on a $6k card seems like a recipe for disaster.