Retirement and credit rating/credit card limit

dunroving

I have recently retired and am wondering about the effect on my credit rating.

I've always paid off my CC bill in full, never had any late payments, etc. I use my CC bill for about 90% of my outgoings, except the mortgage. I have a mortgage with 12 years to run, but I plan to move house next year and will probably pay it off rather than try to port it. My credit rating has always been very high.

A friend who retired applied for a credit card and was refused, so I am wondering what would happen to me if I wanted to, for example, switch to a different credit card (e.g., some sort of rewards card), or applied for an increased credit limit, just for convenience (I sometimes hit my current £2k limit if I use my card to buy a big-ticket item). I *think* my friend may have been refused because he currently has no income (he deferred his occupational pension).

My formerly high income is now reduced to £14k pension, but I have a substantial amount of money in savings. My need for a decent credit card limit is purely for convenience, not to go into debt.

I'm wondering if my low income will now reduce my credit rating if I apply for a different card. I'm also wondering whether an application for a new card would then involve a record of my current income being on file and could lead to my current CC changing/reducing my credit limit.

[Deleted User]

You don't have a universal credit rating. It's all down to how lenders see you.

The two key factors are how they view 'retired' as an occupation, and your income. The low income will be the most discriminatory factor.

It's highly unlikely to impact any existing credit.

TadleyBaggie

I retired a couple of years ago, since then I have taken out PCP on a car, 3 new credit cards, 2 new current accounts and a number SIM only contracts, never been refused.

Missus_Hyde

My husband retired five years ago and we have a various assortment of credit cards, some for cashback, some for using abroad and a couple of odds and sods knocking around as back ups, in case the others don't work for some reason.

The fact that he shows his income as "retired" when applying for cards has never been a problem; in fact when he first applied for a FlexDirect account, Nationwide actually suggested that he apply for their select card at the same time, so obviously they weren't bothered that he didn't have a "salary" as such.

We always pay in full every month, so never pay any interest.

MABLE

Been retired for about 7 years now and have never found a problem obtaining further credit and at good rates. Obviously they regard me as a pillar of society.

Also applied for the NW Select card recently and the application was a straight accept.

sourcrates

You cant judge your own situation by how someone else was treated, everyone's circumstances are different.

Obviously credit card companies exist to make profit, and this is factored into the eligibility criteria they look for when making lending decisions, if you clear your balance in full every month, then you are not going to make them any any money are you, so a particular lender may decline you on that basis, but another lender may not be so picky.

Many factors are involved in deciding weather to lend to you or not, you may meet one lenders acceptability criteria, but not another`s, trouble is there is no way of knowing who will accept you and who wont beforehand.

MABLE

sourcrates wrote: »

You cant judge your own situation by how someone else was treated, everyone's circumstances are different.

Obviously credit card companies exist to make profit, and this is factored into the eligibility criteria they look for when making lending decisions, if you clear your balance in full every month, then you are not going to make them any any money are you, so a particular lender may decline you on that basis, but another lender may not be so picky.

Many factors are involved in deciding weather to lend to you or not, you may meet one lenders acceptability criteria, but not another`s, trouble is there is no way of knowing who will accept you and who wont beforehand.

If you are referring to me I can only go by my own experience.

dunroving

sourcrates wrote: »

You cant judge your own situation by how someone else was treated, everyone's circumstances are different.

Obviously credit card companies exist to make profit, and this is factored into the eligibility criteria they look for when making lending decisions, if you clear your balance in full every month, then you are not going to make them any any money are you, so a particular lender may decline you on that basis, but another lender may not be so picky.

Many factors are involved in deciding weather to lend to you or not, you may meet one lenders acceptability criteria, but not another`s, trouble is there is no way of knowing who will accept you and who wont beforehand.

Doesn't the credit card company make some money from the vendor when you use a CC to make a purchase?

sourcrates

dunroving wrote: »

Doesn't the credit card company make some money from the vendor when you use a CC to make a purchase?

I believe there is a small percentage charge per transaction yes, but its only peanuts to cover admin costs.

Credit card companies make their profit from :

(A) charging interest
(B) account fee`s, (such as overlimit fee`s, late fee`s etc).

Before fee`s were limited to £15, they used to charge up to £35 per fee, a freedom of information request from barclaycard at the time discovered that up to 60% of there gross annual profits were made up of account fee`s alone, this was around 2010.

Consumerist

In some respects being retired means you no longer run the risk of such mishaps as redundancy so providing your income/debt ratio looks healthy then you may well be regarded as a safer bet for lenders.

dunroving

Consumerist wrote: »

In some respects being retired means you no longer run the risk of such mishaps as redundancy so providing your income/debt ratio looks healthy then you may well be regarded as a safer bet for lenders.

For the foreseeable future (until state pension kicks in in 2023), my formal regular income will be ca. £15k p.a. from two pensions, and I will have no mortgage.

The only debt I'd have would be potential short-term CC debt, and all I would like to do eventually is change my credit limit on my rewards card from £2k to £3k or £4k so that on the odd occasion I make a large payment, I don't hit my credit limit and have to move money from my bank account into my CC account mid-month. Also, because my CC will not allow me a positive balance, the most expensive thing I can currently buy with my CC would be £2k.