Declaring Income When Apping

[jake619]

In years past the income box used to read "household income" which was great because I had roommates. Now I'm married and while we make more than I used to claim the apps no longer word that field the same. Tax returns would support my current household income but it feels misleading to combine our income since it doesn't explicitly ask me to or say its ok to do so.

Should I? Do you?

[mikka1]

If I understand the current situation & legislation properly the short answer is "No, you shouldn't combine, you should only state your individual income in a card application", unless you reside in the state of Wisconsin. 

The reason is a so called CARD Act passed not a long ago that basically mandates banks to gather information on _individual_ ability of the borrower to pay credit card debts off. Thus you can't state your household income and banks should explicitly ask for individual income during the application, unless state laws allow to use household income instead. As far as I know, WI is the only state allowing this. 

The second part of the question is a bit more tricky - CARD Act basically made it impossible (or at least very hard) to get any credit cards for stay-at-home moms and dads even if they have savings and their combined income is high enough. As you might imagine, people in such a situation might have a temptation to state their household income instead, but in this case you simply end up lying in your application and that might hurt you later on in some bad event leading to bankruptcy...

[scenery_guy]

If tax returns support it then use it. Yes, I understand it combined income and that the CARD act says don"t use it like that - but do the credit card issuers think that each and every person in America actually read and understands the CARD act? Worst case is they ask to see confirmation of income, you send in joint return and they reject it and will not approve or lower the credit limit. Play stupid, it's what most of America does (and they actually are stupid to things like this). At least you are here learning stuff like the rest of us.

[cashnocredit]

The CPFB's job is to interpret and clarify the CARD act. and it is now interpreting "income" to be income to which one has access. It can be household income if income is deposited in a join bank account among other things.  For people under the age of 21 "income" remains individual income.

[jake619]

OK, so the takeaway is no but it goes unvalidated unless FR or worse.  We do file joint and both work so covered there.  Payroll is deposited into two joint accounts.  Not trying to skate here but I just recently began addressing some items and acquiring new credit is part of my process.  I felt uncomfortable listing combined income and I feel good about honorring the intent of the application to get MY income.  

I guess the irony is my income is seldom mine - I'm married 

[bluesnowman]

Personally, I just list my projected income and round it up a little bit. If they choose to accept me, I'm happy. If not, then that is there decision and I don't take it personally. They have to do what they have to do what is right for them. 

[cashnocredit]

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@mikka1 wrote:

If I understand the current situation & legislation properly the short answer is "No, you shouldn't combine, you should only state your individual income in a card application", unless you reside in the state of Wisconsin. 

The reason is a so called CARD Act passed not a long ago that basically mandates banks to gather information on _individual_ ability of the borrower to pay credit card debts off. Thus you can't state your household income and banks should explicitly ask for individual income during the application, unless state laws allow to use household income instead. As far as I know, WI is the only state allowing this. 

The second part of the question is a bit more tricky - CARD Act basically made it impossible (or at least very hard) to get any credit cards for stay-at-home moms and dads even if they have savings and their combined income is high enough. As you might imagine, people in such a situation might have a temptation to state their household income instead, but in this case you simply end up lying in your application and that might hurt you later on in some bad event leading to bankruptcy...

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This is currently in the process of changing. Here's a link by the Fed on the change to Regulation Z.

http://www.stlouisfed.org/regreformrules/RuleSummary.aspx?id=497

Here's a discussion from June that provides a lot of background.

http://www.consumerfinance.gov/speeches/testimony-of-gail-hillebrand-before-the-house-subcommittee-o...

[jake619]

Great links - especially the latter.  About halfway through the testimony it should have been pretty clear to the subcommittee that the unintended consequence was lagitimate.  I bet the subcommittee members spouses dont all work yet have credit cards, LOC's, etc... I also bet this gets corrected.

Nice find..thanks for sharing.

[Jazzzy]

We always put joint income unless it specifically asks for individual. For us, it all goes in the same pot.

We also add on the annual gross income from 2 rental properties because when someone pulls our credit they will see mortgage payments for those properties. The mortgages are joint, so even if we are asked for individual, we add the rent payments on as income. We want to show that those payments are covered.

We've never been questioned on this. We've been through FR with AmEx, and, if I remember correctly, PenFed wanted some additional information once. We passed all with flying colors.

[Epcot]

Usually I put in my income, but on the last application I had with Chase I encountered something new.

I apped in person and under income it asked for my 'Total available income/assets/cash that I have access to in order to repay any debts to Chase' ( I don't remember the exact wording so I am paraphrasing). I just thought that was interesting.