Retirement and credit rating/credit card limit

Consumerist

dunroving wrote: »

. . . 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.

Income is not recorded on your credit file but lenders, including credit card providers, will ask about your income when making decisions about credit.

Lenders have been more cautious of late due to concerns about affordability. It seems to me that a £4k limit with a secure income of £14k should not be a big ask if you only have the one credit card. These days card companies tend not to increase credit limits until asked - so go ahead and ask, perhaps after Christmas might be better than right now.

Unless you anticipate a large purchase (> £2k), you could just get a second card from another bank, anyway.

Thrugelmir

dunroving wrote: »

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

Somewhere between 1% and 2.5% per transaction. Likewise retailers can be charged for the card readers that are provided. .

Consumerist

Thrugelmir wrote: »

Somewhere between 1% and 2.5% per transaction. Likewise retailers can be charged for the card readers that are provided. .

According the Daily Telegraph, 19 July 2017:-

An EU rule change in December 2015 capped “interchange fees” on credit and debit cards – paid to payment providers from shops and passed onto consumers – could be no more than 0.3pc and 0.2pc receptively [respectively]. The Treasury has extended this ruling to include Paypal and American Express, as the EU rules only required a ban for Visa and Mastercard.

The new rules will apply from Jan 2018.

leboff

I retired from the NHS with a generous lump sum and a decent pension (yes, I'm lucky!). My credit card provider refused a request to increase my credit limit from £4k (to pay for a holiday) as my monthly income had gone down. I offered to provide proof of my lump sum, savings and other source of regular income from my rental properties, but I was told that these would not count. I have always cleared my card every month, and wonder, reading these comments, if I have been unlucky with my provider and should just apply for another card elsewhere and hope they are more in step with pensioners financial arrangements.

[Deleted User]

You can try elsewhere. However, savings are rarely seen as a substitute for ongoing income

Sea_Shell

I think problems arise if you have "retired" and are living off savings rather than any formal income ( no pensions in play yet).
Has anyone experienced this?

[Deleted User]

Yes, huge numbers of people.

MABLE

I am retired and have two final salary pensions and the state pension income and have never expired any issues in obtaining further credit and always at the best personal rate of interest. However I try never to pay any interest and tend to go for promotional offers on my credit cards.

Sea_Shell

Deleted_User wrote: »

Yes, huge numbers of people.

So hopefully some of them will pop in and add their experiences of gaining access to credit (or not) in these circumstances.

Consumerist

leboff wrote: »

I retired from the NHS with a generous lump sum and a decent pension (yes, I'm lucky!). My credit card provider refused a request to increase my credit limit from £4k (to pay for a holiday) as my monthly income had gone down. I offered to provide proof of my lump sum, savings and other source of regular income from my rental properties, but I was told that these would not count. I have always cleared my card every month, and wonder, reading these comments, if I have been unlucky with my provider and should just apply for another card elsewhere and hope they are more in step with pensioners financial arrangements.

Word has it that it's your total debt to total income ratio that they look at when assessing their risk as a lender as well as your access to credit compared to income. Since your income has decreased, this is affecting these ratios adversely. If you have several credit cards giving you access to a lot of credit then that will affect the second. You might want to consider closing some card accounts in that case.