Isn’t it nice to know that banks care enough to offer a credit card that’s suitable to a pensioner’s income? It may be more of a no-frills option, but at least it‘s a card that can give you the financial freedom you need to get on with enjoying your life the way you want.
With one proviso - you must earn enough income in the eyes of your lender to repay your debt. So the amount your lender allows you to borrow will be determined by your ability to pay it back, while taking into consideration other factors like:
You may be a pensioner, but it doesn't mean you don’t still have these kind of financial obligations! Everything will be taken into consideration.
As mentioned before, just because you’re a pensioner, doesn’t mean you can’t apply for a credit card but your options will be more limited than someone who is earning a wage through employment.
As long as you have some form of income and meet other criteria, then getting approval for a credit card should be pretty straight-forward. The average expected income is about $14,000, but this could vary between banks.
Do you receive the pension as well as earn another income? Then some or all of it will be considered as part of your total income. However, if your Centrelink payment is your only income, then unfortunately you will not be considered as the right kind of candidate by your bank.
You may not care for new clothes or fancy restaurants, but you may need access to a large sum of money quickly at some point. These times are nearly always unpredictable, so wouldn’t it be best to have access to as much as you need when you need it most? Here’s a list of occasions where a credit card could be useful. You could add your own here too:
Mozo loves it when banks take the time to understand your unique situation. Not one person’s life is predictable, so having a variety of products available allows you to choose the best one that fits your life. Some of them may include:
1. Low interest credit card - usually a no frills card with no points and lower fees and interest on your purchases. Great for saving as much money as you can on unnecessary fees and interest. Afterall, if you really want something, all you have to do is buy it, not accrue points in exchange for an item, right? Compare low interest cards.
2. Reward credit card - earn either cash back on purchases or points. expect to pay higher interest and fees for this privilege. Our favourite of the two is the cashback variety. You can earn up to 5% back of purchases you make. This really makes sense and is a great reward system in itself if you learn to play the game properly. In other words - repay your debt before the due date to make the cash payback worthwhile. Head to Mozo’s rewards card hub.
3. Frequent flyer - working less or not at all? Then traveling may become your next favourite pastime! But what about your income? Perhaps you have a generous amount of Super you’re living off, savings or investment property that’s earning you a handsome lifestyle. Expect to pay higher fees and interest rates for this card. Frequent Flyers offers can be found here.
We’re glad you asked. There’s nothing worse than feeling left out in the cold and feeling like you have limited options when it comes to buying what you need and want. Luckily, there are alternatives to consider. They may not offer all the financial freedoms of a credit card, but the alternatives sure let you get on with your everyday needs.
We admit, it’s no easy task which is why we’ve simplified the process for you. All you have to do is have a think about your expectations when it comes to having a credit card while being realistic about your affordability to repay as you spend. Here are some other factors to consider:
For the easiest way to compare rates, fees and other factors, use Mozo's credit card comparison calculator for speedy results.
It’s one thing to have successfully signed up to a new credit card, and it’s another to understand what you’ve signed up for. We’ve had a good think about what you need to be aware of when you have that new shiny bit of plastic in your hands. It’s powerful stuff!
1. Trust - not everyone has the good intentions you do. Fraudulent activity on credit cards is on the rise, so you need to stay vigilant about how you use it, where and who has access to your credit card information. For a more comprehensive understanding about how to use your credit card safely, read Mozo's tips on credit card safety.
2. Promotions - You may have signed up for something wonderful, like 0% for the first 6 months, but have you taken note on when that promotion period ends? Banks are often too cheeky to remind you when the honeymoon period expires as a sneaky way to profit from your forgetfulness. Save the date in your diary so that you can spend consciously and saving on unmanageable debt.
3. End of month - Spending sprees are fun aren’t they? Birthday pressies for the grand kids, something nice for yourself and a deposit on your next holiday. But can you repay what you’ve spent at the end of the money? Yep, we like the motto: you only live once too, but staying debt free at the end of each month helps you click over to the next worry free. It’s a good idea to plan you spending ahead of time compared to the income you receive and what you can afford to repay.