How much does income need to exceed expenses to get a credit card?

[advikasharma]

Posting for the first time so hopefully I don't break any rules.

I've recently been rejected for credit card applications for NAB and ANZ (slightly fancy ones with lots of Qantas bonus points). ANZ actually called me and went through all the values I'd put in the application to make sure they were right, and then told me at the end of the call I was rejected. I'm kicking myself for not asking how much off I was and whether I could change something to get approved.

Is there a standard that most Australian banks use for deciding to approve or reject credit cards like income minus expenses equals X, and if X is greater than Y then you're approved? Or like X needs to be greater than the credit limit or something? I know they take into account other things like credit score, but I'm wondering if I should be aiming for an amount.

I'm not trying to be dodgy and lie or anything, but I could potentially refinance my mortgage to reduce payment amounts etc.

Thanks in advance for any info you have!

 

[aachen_hexagon]

@advikasharma You must be broke, banks would give out credit cards to 16 Y/O’s working at bunnings on $14 PH if they could

Hope this helps

 

[advikasharma]

@aachen_hexagon Not broke, I have cash and assets and a decent income, I just also have large mortgage repayments and expenses

That did not help

 

[aachen_hexagon]

@advikasharma Damn, really thought that would help

 

[kasto62]

@advikasharma Yeah I’m in the same boat as you. Just earlier this year I was on a CBA ultimate awards cc with 6k limit (the lowest it could be). They recently changed their fees from $0 if you spend $2k/month otherwise it’s $35/month, but now the min spend is $4k for the same thing. So I cancelled it and waited a couple of months before applying for CBA smart awards cc which is $0 if you spend $2k/ month otherwise $19/month. I put in the min credit limit of $3k in my application and I make over 6 figures - rejected. Wonder if it has to do with my increased mortgage interest rates as compared to what it was when it was still fixed earlier this year. (I don’t need a credit card, but I used it to keep money in my offset account as much as possible)

 

[mskris]

@aachen_hexagon I make 6 figures and still got declined by ANZ. Approved by NAB later the same day. ANZ are idiots - don’t get a card there.

 

[lindseym1013]

@advikasharma “I have large mortgage and expenses, why was I rejected?”

Pretty sure you answered it.

 

[advikasharma]

@lindseym1013 Except my question wasn't "why was I rejected", my question was, is there a rough calculation so I can work out how I can get approved next time?

 

[lindseym1013]

@advikasharma Yes there is, have less debt and expenses

 

[dpardue]

@lindseym1013 And/or more income

 

[man_who_is_broken]

@advikasharma Banks need to show that you have enough “serviceable income” compared to your expenses. When you make an application they will looks at what the repayments on the maxed out credit limit will be and determine if you have enough disposable income to make the minimum monthly payments. If you show as having no disposable income or negative servicing your application will auto decline.

People tend to think their asset position or total wealth changes this. It doesn’t, under responsible lending legislation banks cannot give you a loan that they cannot prove you can afford.

 

[advikasharma]

@man_who_is_broken Thanks, that helps

 

[warriorforchrist94]

@advikasharma Any bank employee who works in loan applications or enquiries will have a very vague idea of what the lending criteria are for the bank.

But they cannot disclose it, because of this exact scenario.

And no, credit scores are not factored in.

Source: Former Big4 employee who worked in the loans area.