When Jacqui Bauer recently applied for a credit card, she was shocked to learn that she had no credit rating, leading banks to categorize her as "high risk" despite having a stable income. This lack of credit history stemmed from her previous joint bank account with her ex-husband, highlighting a common issue where individuals do not build their credit rating if they don't have accounts in their own name.
According to Chris Grice, the CEO of National Seniors, older Australians are facing increasing difficulties in obtaining credit cards, partly due to reforms implemented after the 2018 royal commission on banking misconduct. These reforms unintentionally made it harder for retirees to demonstrate their creditworthiness, as they struggle to prove stable income and limited credit history. Moreover, the shift towards digital payments and the phasing out of cash and cheques by 2030 further complicates financial transactions for this demographic, with around 500,000 personal cheques processed monthly in Australia, mainly written by older individuals.
As the closure of bank branches in rural and regional areas accelerates, the challenges for older Australians accessing cash and financial services are amplified. The Senate inquiry into this issue highlights the growing reliance on digital payments, leaving many individuals, especially retirees, at a disadvantage when it comes to accessing essential services. Organizations like the Australian Banking Association are being called upon to address these issues and provide solutions for older Australians facing difficulties in obtaining credit cards and managing their financial needs.