Banks refuses credits to elderly...

[Homdax]

Two cases have caused some headlines in Sweden.
One is the 78 year man with a decent pension that was refused by Citibank to renew his Shell credit card. He has been a Shell customer for no less than 50 years.
The other is...well very similar.

Common factors are that these are people with a respectable income (around 250 000 SEK in income = €26 000 = £20 000 = $36 000) but elderly, above 70 years. Healthy though, as it seems.

These people have been paying taxes and providing revenue for the banks and petrol companies for the mayor part of their lifes with none or very few issues. Aren't they worth some trust? Are they to big a financial risk?

So the bank and financial institutes will be cutting me off in 30-sh years because I am closer to the grave and might miss a payment?

Edit,
I just read that the owner of IKEA, Ingvar Kamprad, 82, would be refused an account in his own bank, Ikano. :moefixed: Ikea is reviewing their policy.

[Jivebologna]

Pretty much. My friend's mother couldn't get a job, despite 35+ years of experience because she has had a heart attack in the past ten years and is almost 60. In the instance you've described, considering that all credit companies give is... credit, I can understand why they'd be reluctant to maybe give out a loan that lasts more than ten years. Bad as it sounds, I'm mildly surprised that my grandparents (both in their 70's) aren't dead yet. On the one hand, they've made it this long, but on the other hand, at some point everyone's health becomes a time bomb. The gas card seems excessive though.

Denying credit in such a situation makes good business sense (I suppose), but it also makes for shitty people.

[overmind2000]

Denying credit in such a situation makes good business sense (I suppose), but it also makes for shitty people.

And that about sums it up. With companies now so large and run in such a manner that a person is just a number and not a customer the number of years loyal service and such is not a consideration (there are always more fish in the barrel) and so companies are run on the basis of profit - and giving loans to people that might not live out the full duration of the loan repayment period is not good business practice - grim, sad - true

[Ammon Ra]

Risk assessment. denying credit to old people who could die at any time and ergo loosing money is a bad idea for a business. Sucks for elderly people. :(

[Mind Strike]

Sounds Morbid but i bet a lot of Old People try and take out credit because they expect the repayments to outlive them so they can spend the cash on their family before they die. :bricks:

I would do it to get my own back on this cruel world.

If they refused me credit i would find that bank on a google sponsored link and keep clicking until they go bankrupt or till i get satisfaction.

That way i could die happy

[HunterX]

You do realize that when you die, your next of kin are responsible for paying your outstanding debts, even credit cards? I mean there are screwy ways you can play around with the numbers through consolidation, but one way or another those outstanding debts are getting paid, at least in part. You can also play around with the timescale for paying it off. The only thing IIRC that happens to credit card debt specifically (may apply to other forms of credit like long term loans, I don't know, may be a state to state, country to country thing) is that the balances stop accruing interest.

Honestly, this sounds more like a response to the recent credit/loan crisis than anything else and they're cutting back on the amount of credit they issue because they simply can't afford to issue that credit. Denying credit to the elderly and retired on fixed incomes is easier than denying credit to the young and working. Easier to explain to the stockholders.

[malairt]

Maybe in America but certainly not in Blighty. Personal debts are just that, personal. They are not transferable to anybody else unless they agreed to guarantee them.

Debts will be subtracted from the estate of the deceased: any surplus is distributed to surviving relatives in accordance with the will, or if there isn't one, according to the local law on dying intestate. If there isn't enough money, lenders don't get paid.

On topic, I don't subscribe to the idea that lending is a charity. A lender needs to make money and will make an assessment on the likelihood of being repaid. Hence the need for credit ratings. I don't see anything wrong with that.

[A176]

Risk assessment. denying credit to old people who could die at any time and ergo loosing money is a bad idea for a business. Sucks for elderly people.

All they should need is a co-signee; do these banks not implement this? Banks in canuckland do extensive assessments, and with many loans they simply deny you based on financial status instead of age or whatnot. Banks are not insurance companies.

However with some credit options, if you can have someone co-sign the agreement with you, then you are able to obtain the loan under your name but the financial risk is spread among two or more people.

[El Russo]

Does being loyal to a financial institution for x amount of years mean they should look one way when their policies dictate certain decisions? I think not. I mean, I'm all for loyalty in a general sense but it just doesn't work in the mathematical equanimity world that is banking. Hell, I'd be worried as a customer of said bank if they were doing things like that as it means they're taking risks outside of what they've originally decided is best financial business.

Of course, that doesn't mean these cases shouldn't be highlighted, but it would be in reference to the way they're doing business, not specifically to a news item designed to cause discussion and chase ratings on some feigned level of cynical outrage. Banks are supposed to have a "computer says no" default system or people would be a lot more concerned about their savings.

[Timeless]

I don't think this is allowed in the US.

[[Vertigo]]

So you get someone with power of attoreny to open the credit line for you!?

[Mirehn_Bielann]

You do realize that when you die, your next of kin are responsible for paying your outstanding debts, even credit cards?

This is untrue. When you die, your debts die with you. Anything left in your estate is used to pay those debts. If the estate cannot pay for it, the inheritance is totally dissolved, but the descendants do NOT have to pay the balance. This is why credit companies do not like giving new lines of credit to the elderly.

Come on, this is a simple exercise in logic. If they could pass on debt to the descendants, they would LOVE to give people about to die more credit.

[Homdax]

True, but the possible inheritance shrinks...

[zer0nix]

well holy crap. i hadn't heard of citibank pulling such garbage since before the ceo shift (back in the 90s).

back in the day, before the days of 'thank you rewards' and everything had a charge, my father experienced nearly the same situation: he was 45 at the time his request for renewal was denied, and he was told up front that the reason for the denial is because his credit is TOO GOOD; after decades of use, he had never once been late on paying off his bill. supposedly, 'he wasn't making the company money.' my father was pissed beyond belief.

i guess citibank was trying to 'cut its losses' with these people --even though merchants have to pay citibank everytime a citibank card is used.

the next few years saw the end of that ceo's reign and the beginning of citibank's 'thank you network;' i can't be arsed to check if their stock and marketshare also went up in this time, but i imagine it would have as getting rid of fees and paying your customers for using your card seems like an attractive policy.

oh look; this recent change coincides with yet another ceo change, just when he should be settling in and enacting his own policies: http://money.cnn.com/2007/12/11/magazines/fortune/eavis_pandit.fortune/index.htm

grand.

EDIT: oh wow. (http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN2636973720080826) fuck citigroup.

[FooF]

I worked in the student loan business for a few years and know that debt dies with you.

We had an old saying for our private loans "You either pay them off or die trying" because student loans are rarely discharged under bankruptcy. They do not, however, go to the next of kin nor do the loan companies go after the estate.

Hence, lending anything to the elderly is high risk, despite the credit history. It's simply good business not to lend to them... :(

[Ravenhart]

If modern society was not addicted to credit, we wouldn't have this problem. But of course that's off topic; regrettably, this is just the hard reality of it.

There's a strong possibility that elderly folks might die before paying their final credit card bills.

Cus the big companies haven't made enough money.

[TheWickedGerman]

What many people forget - This are companies, no welfare organisation. They dont want to help you. They dont want to do good things to you. They dont care. The only thing they want to do is rip as much money as they can out of you.

So denying credits to old people makes perfect sense. Even if they already made billions with the actual old people during their life. They dont want to loose a single penny, they want more, more, more.

[Lor]

IIRC debt etc are settled from the deceased's estate before payments are made to family etc per any will left by the deceased, so while they may not be able to transfer the debt to you, you will inherit less as a consequence.

[Radical]

Unless, of course, the deceased transfers everything he has to his descendants before he kicks the bucket, leaving the bank empty handed.

[overmind2000]

of course a lot of this depends on which country you live in ;)
In the UK I belive there might be limits on gifts and handovers due to the death duties (yes you pay when you die) so the limits are in place to prevent people simply giving away all their stuff to their kids and getting out of the tax.
The very very rich get away sometimes by setting up trust funds - so the money is not held by the indevidual but by a trust - which does not "die" so death duties are reduced, though there is still some to pay

[Lor]

Unless, of course, the deceased transfers everything he has to his descendants before he kicks the bucket, leaving the bank empty handed.
Any transfers like this are subject to a 7 year time limit, so if the deceased gifted it to you, then died within 7 years you would have to pay IHT on the sum. There is also a cap for the amount you gave offload this way. It is somewhere in the region of £360,000 for every seven year period.

[Radical]

Any transfers like this are subject to a 7 year time limit, so if the deceased gifted it to you, then died within 7 years you would have to pay IHT on the sum. There is also a cap for the amount you gave offload this way. It is somewhere in the region of £360,000 for every seven year period.

Again, that may be true in Merry Old England but not elsewhere.