Making it easier for retirees to get credit cards

PHOTO: Making it easier for retirees to get credit cards

RETIREES with financial security will find it easier to get a credit card under proposed changes by the Monetary Authority of Singapore (MAS).

One reform in a package announced yesterday would give retirees greater flexibility when it comes to applying for a card.

Those over 55 will be eligible if they have an annual income of at least $15,000, net personal assets exceeding $750,000, or a guarantor with an annual income of at least $30,000.

People who meet either of the first two criteria can get a maximum credit limit of two months' income if their annual income is under $30,000.

Those earning more than $30,000 a year can get a credit limit based on four months' pay.

The credit limit for retirees who qualify under the guarantor clause cannot exceed the credit card limit of the person who is guaranteeing the card.

The Council For Third Age, an agency that promotes active ageing, welcomed the proposals.

A spokesman said: "This provides seniors with an option to continue to pursue an active and varied lifestyle and enjoy benefits like all credit card consumers."

Responses from retirees were mixed, with some fearing that people would be exposed to greater credit risks.

Mrs Reega Dawes believes that retirees need credit limitations as they have no steady income. "Unless you are already very rich," she said, adding: "But for average people like me, it is not advisable. Don't you think it is unnecessarily putting retirees at risk, with all these unnecessary temptations?"

Mrs Dawes, 72, does not have a credit card and will not take up the offer even if she meets the new criteria.

Retiree Low Hai Kiat, 69, has a card, which he has kept since his working days, but he noted that applying again would be difficult if he were to change banks.

"Credit cards should be given out based on ability to pay, not income. Even if children are willing to be guarantors, it might place unnecessary strain on them, as they find it hard to say no to their parents," he said.

However, Mr Jim Then, a former financial trader turned freelance trainer and wellness coach, reckons greater flexibility in credit card eligibility for those over 55 does have its merits.

Mr Then, 67, said: "For one thing, senior citizens will not have to carry around so much cash, especially when they travel."

He added that having a card provides a psychological element of empowerment for senior citizens.

"Not being able to apply for cards does erode some self-esteem. Allowing them to do so gives them a signal that 'I am still credible', and 'People still trust me'", he said.