Some time ago we received an email from a disgruntled customer who had applied for a credit card and been rejected. The customer, although a retiree, professed to be financially comfortable with a freelance income and more than ready to meet her obligations (if any) to the bank.
However, she was contacted by the bank and told that her application could not be entertained as she had no EPF statements as proof of income.
Disappointed, the customer dropped us a note and it made us ask a question we never had before: Could a person be too old for a credit card in Malaysia?
The Customer's Story
Y contacted us via email and shared her story with us. With her permission, the story went something like this...
Wanted to apply for X card, mainly because the card I have had it's benefits downgraded. Thinking it will be good to get another card (what's more with a free Huawei), I applied for card X.
But the bank does not seem to entertain retirees. Someone from the bank called and after a brief conversation, asked me to try other banks as I do not have EPF statements to support my application. What about payslips, bank accounts, etc? Apparently, not enough.
Frankly, I am a wee bit humiliated. Can’t the bank be more flexible on proof of income when it comes to retirees?
Sending Out Feelers
To try the theory on for size, we had some retirees apply for a credit card with the bank involved in this customer's story as well as about 2 others. What we found from the three banks were unanimous: no EPF statement = no credit card.
Admittedly, we did not try every bank but in a bid to understand why such a situation would exist; we analysed the general reasons for rejection of a credit card application that we gleaned from our sources.
With an entire article devoted to the bank's determination of risk, proof of income does play a huge part in the deciding of credit approvals in this country.
A Possible Rationale
Before a bank can decide to offer you a loan or not; they would first need to assess the level of risk involved in lending to you. Based on this assessment that is probably similar across the board; the inability to sufficiently prove a stable income will weigh heavily against you.
As mentioned in the article discussing customer risk above; the 'formula' or criteria is likely already set with no discrimination as to the differences of circumstances amongst the customer base.
In short, retirees are unfortunately excluded over the lack of some income documents because of the set system of risk analysis and not from an age discrimination standpoint. A report in the Telegraph UK regarding a similar case featured a comment from a bank representative that confirms this rationale:
“While anyone can apply for a credit card, not everyone is entitled to receive one. Unfortunately, many of the more attractive credit cards do have minimum salary requirements, which could exclude some older people.”
However, as feminists have since time immemorial argued: a situation that indirectly discriminates against a particular demographic is discriminatory even if the initial intention was not to be so.
What Can Be Done?
Whether or not banks have intentionally decided to discriminate against senior applicants is a moot point if the outcome of the selection process has inevitably led to such a conclusion.
This exclusion isn't just causing financially competent retirees some heartache; it's also costing the bank in the untapped potential of the possibly affluent retiree segment.
Just as other products, such as health insurance, has done; would it not be possible to tailor-make a credit card for a retiree? Perhaps the criteria for approval can be tweaked along with the mechanics of the card in order to not only provide the bank with the assurance they need but also prevent the exclusion of any market segment.
At the end of the day, dear Malaysian banks - there are some retirees like Y above who would like to hold credit cards and have the means to repay: now is that not a market worth tapping?