No credit card required
Browse credit cards from a variety of issuers to see if there's a better card for you.
@CreditCrusader wrote:I cannot for the life of me understand why people put financial aid and scholarships as income on loan and CC applications. Unless the application specifically stipulates that those monies can be considered, you should assume the lender wants to know what your taxable, earned income is. Of course, you are still welcome to try to sneak it by, but as this OP learned, it can lead to FR and even closure down the road. I'm not sure it's worth the risk, but to each his own
Because a lot of people automatically assume that just because they "get money", it's income and can be counted for this reason, no matter what. That, and a lot of people have never really looked at a tax return, so I'm sure there are also people who don't know exactly what taxable income is, taxable liability, nor adjusted gross income.
I just hope those people claiming "gifts" and "allowances" also deem that worthy enough to be included within their tax returns, because if a FR were to happen, AMEX would be wondering where that mysterious "income" disappeared to.
I just go by the rule that whatever is on my W-2 and on my 1040, that's what goes on my CC app. If that is not deemed worthy by any creditor, then so be it. I'll move onto the next one.
Follow my financial journey: http://www.frugalrican.com
I really have to wonder about Amex's financial review process. If they ONLY accept tax return transcripts, then what about legitimate income that is non-taxable? Municipal bond interest is a very simple example, but there could be plenty of other things too. That would be investment income, which the application clearly says you can include, but it's not taxable. Or, what if your income recently jumped since the prior year's tax return? Again, the income amount is legitimate, but not reflected in your previous tax return.
I HAVE to believe that it can't be as cut and dry as them only considering the tax return transcript. If it is, then that's a very short-sighted and flawed approach on their part.
@Autumnslight wrote:I really have to wonder about Amex's financial review process. If they ONLY accept tax return transcripts, then what about legitimate income that is non-taxable? Municipal bond interest is a very simple example, but there could be plenty of other things too. That would be investment income, which the application clearly says you can include, but it's not taxable. Or, what if your income recently jumped since the prior year's tax return? Again, the income amount is legitimate, but not reflected in your previous tax return.
I HAVE to believe that it can't be as cut and dry as them only considering the tax return transcript. If it is, then that's a very short-sighted and flawed approach on their part.
I'm pretty certain it isn't; however, I haven't seen many stories of people who actually go *through* the process to completion, or at least they haven't been shared recently. Most on this forum cut and run, generally because many of the stories which were posted were simply obviously wrong, flat out lying to either Amex or the IRS.
If I get slapped with an FR it'd be problematic as my income for 2012 is much higher than what I earned in 2011, but I'd be astounded if they didn't let me provide paystubs, bank account info, and FWIW I put my employer's name and ADP-listed contact number in my application. They can call if they wish to verify my employment, and I suspect that's a step they do before the FR process ever reaches the ears of the customer. Also there's plenty of room on the Amex application to disclose additional assets, as well as something in their interface to update your financial picture.
It'd be laughable as you suggest to only accept tax returns, what happens to the 60+ demographic that has non-trivial non-taxable income and is one of Amex's largest customer demographics?
@Autumnslight wrote:Municipal bond interest is a very simple example, but there could be plenty of other things too. That would be investment income, which the application clearly says you can include, but it's not taxable. it can't be as cut and dry as them only considering the tax return transcript. If it is, then that's a very short-sighted and flawed approach on their part.
I thought municipal bond interest, being tax exempt does get reported into the W-2 but not included within the figures used to determine the for AGI.
Or am I wrong?
I don't think it is as cut and dry as them just only using a tax return, but I am sure that they probably have an "audit" system in place where they could possibly find triggers or indicators of a person's validity (within the tax return) which could prompt them whether to go even further in the FR process or not.
Follow my financial journey: http://www.frugalrican.com
@Autumnslight wrote:I really have to wonder about Amex's financial review process. If they ONLY accept tax return transcripts, then what about legitimate income that is non-taxable? Municipal bond interest is a very simple example, but there could be plenty of other things too. That would be investment income, which the application clearly says you can include, but it's not taxable. Or, what if your income recently jumped since the prior year's tax return? Again, the income amount is legitimate, but not reflected in your previous tax return.
I HAVE to believe that it can't be as cut and dry as them only considering the tax return transcript. If it is, then that's a very short-sighted and flawed approach on their part.
You can submit other information if you want and can also tell them your income situation has changed. The reason for the tax returns is because not many people would lie to the government for fear of not so nice penalty. They get them straight from the Internal Revenue Service, so there is little chance of them being altered. Bank statements are not accurate because you could just move money around from multiple bank accounts to make it look like you have a steady stream of income. They look at the spending pattern on other cards as well to determine it. If you say you make 100,000 and you have only spent a dollar they may wonder if you are lying.
You also do not have to submit anything. The lady told me they can complete the review without tax returns, but she has only seen a few cases of people passing it without them. Without the tax returns she said they look at a variety of things, but would not go into specifics.
@youngandcreditwrthy wrote:
I think allowances can be considered income, just not student loans. I always include my mom's income in my hhi, but that's because she has actually helped me pay my credit card bills in the past when Ive been in a bind. I'm also 23 with a great job and a full time student and have paid most of my own bills since I've been 20 or so. But if your only source of income is your parents, that seems a little unstable to a creditor, I'm sure. Plus Amex is just not the type of creditor that hands cards out to 18 year olds. I've had to build my credit for FIVE YEARS to get my Amex BCE!!! Lol We can fight all day long about gov't and regulation, bit as many ops post, Amex is acting reasonably due to requirements by the CARD Act (I think). And for the better, you should be willing to show proof of income if you want a credit card; it is a loan afterall...similar to any car or home loan, although not secured. Sorry for the rant... Hope everyone is doing wellll :-)
Sorry to burst your bubble but by doing this you are committing fraud. Your moms income isn't yours and can't be used for the basis of repayment of a loan.
and money your mom gives you also can't be used unless you consided it as income and pay income taxed on that as well
@ryanbush wrote:
@youngandcreditwrthy wrote:
I think allowances can be considered income, just not student loans. I always include my mom's income in my hhi, but that's because she has actually helped me pay my credit card bills in the past when Ive been in a bind. I'm also 23 with a great job and a full time student and have paid most of my own bills since I've been 20 or so. But if your only source of income is your parents, that seems a little unstable to a creditor, I'm sure. Plus Amex is just not the type of creditor that hands cards out to 18 year olds. I've had to build my credit for FIVE YEARS to get my Amex BCE!!! Lol We can fight all day long about gov't and regulation, bit as many ops post, Amex is acting reasonably due to requirements by the CARD Act (I think). And for the better, you should be willing to show proof of income if you want a credit card; it is a loan afterall...similar to any car or home loan, although not secured. Sorry for the rant... Hope everyone is doing wellll :-)
Sorry to burst your bubble but by doing this you are committing fraud. Your moms income isn't yours and can't be used for the basis of repayment of a loan.
and money your mom gives you also can't be used unless you consided it as income and pay income taxed on that as well
Gift income can be claimed on taxes, but is not taxable unless you go over the gift limit set by IRS
@FrugalRican wrote:
@CreditCrusader wrote:I cannot for the life of me understand why people put financial aid and scholarships as income on loan and CC applications. Unless the application specifically stipulates that those monies can be considered, you should assume the lender wants to know what your taxable, earned income is. Of course, you are still welcome to try to sneak it by, but as this OP learned, it can lead to FR and even closure down the road. I'm not sure it's worth the risk, but to each his own
Because a lot of people automatically assume that just because they "get money", it's income and can be counted for this reason, no matter what. That, and a lot of people have never really looked at a tax return, so I'm sure there are also people who don't know exactly what taxable income is, taxable liability, nor adjusted gross income.
I just hope those people claiming "gifts" and "allowances" also deem that worthy enough to be included within their tax returns, because if a FR were to happen, AMEX would be wondering where that mysterious "income" disappeared to.
I just go by the rule that whatever is on my W-2 and on my 1040, that's what goes on my CC app. If that is not deemed worthy by any creditor, then so be it. I'll move onto the next one.
That's my rule of thumb as well. Child support goes on the 1040 but, its not taxable. My rental income goes on the 1040, but only the "net rental income" is taxable.
When I apply for things, I apply over the phone, and I list my rental income and make sure that they understand that I'm giving them the gross amount, not the net amount. The mortgage appears on my credit report, so its clear that they are already figuring in that payment towards my DTI
what is the gift limit?