FIA Schwab Card Confusion

[Anonymous]

I applied a week ago for the Schwab Invest First card, and after missing a call last Wednesday from FIA I called in to check the status of my app. The guy I talked to asked me a ton of questions about income, then put me on hold for a few minutes, came back and told me I was approved for $5000 and that the card would be in the mail. Being the freak that I am, I continued to check the online status tool which remained pending until it went to DENIED on Saturday. I finally got through to someone today and was told that I was initially denied, but it looked like my application was being reviewed now based on my phone conversation last week. She told me to check back in 24 hours to see if I'd been approved. What is going on?!

She told me it was initially denied because my DTI ratio was "sufficient". Between car pmt and mortgage it's at about 50%, all cards PIF each month. With the rewards program on this card it would be my intention to transfer all my bills and charges to this card, and just keep my other cards alive with maintenance charges. I'm sick of airline rewards, and my new AMEX cash rewards just doesn't compare to what I could get with the Schwab card. Is there anything I can do/say to get this application through? No baddies on report, Ex of 740 (I'm guessing).

[Anonymous]

I checked back with FIA today regarding my card application. It continued to say denied, so she talked to her manager to see what was up and if there was anything she could do. I was denied again (this is starting to get insulting) because I have a large interest only mortgage. The mortgage doesn't reset until 2013. She said that because of the economy they couldn't approve me for the card because when the mortgage resets the payment will go up. In 2013 ??? When I explained it's always been our intention to sell in the next 2-3 years she told me the real estate market isn't so good right now.

I'm extremely frustrated, annoyed and a touch insulted having never been denied a credit card before. What can I do to get this reconsidered? I want the 2% rewards, nothing else I have compares to that. Plus, now that I have an FIA inquiry on my report, I want the card to go with it. Should I call Schwab directly and see if they can get it approved?

[Anonymous]

Schwab can't help you; they really don't have anything to do with the card besides their name being stamped on the front and the rewards being deposited to your Schwab account.

I really don't think there's anything you can do to get an approval. Recons are usually most successful for people who were denied by a computer, but upon further review their debt load, payment history, etc look to be in good enough shape to warrant an approval.

You on the other hand, have a "large interest-only mortgage" in one of the worst real estate markets we've ever seen. And, with people getting foreclosed on left and right, your mortgage is most likely underwater. It doesn't make sense for FIA to give you credit.

You say that this whole ordeal is "insulting". Honestly though, I'm glad they're starting to be more careful about who they extend credit to -- giving credit willy nilly is how we got into this mess. And there are worse things than being denied for a 2% rewards card -- I'd focus on refinancing that interest-only mortgage to a low, fixed-rate mortgage you can begin to pay down.

Message Edited by jaybird201 on 04-15-2009 09:46 PM

[Anonymous]

Actually I am not underwater. The mortgage is for $512,000 and homes in the neighborhood are selling for $600,000. That's off from the $650,000 they were going for last year, but not so bad in this economy. I refinanced in 2008 after rates made a major decline. I might be able to get a slightly lower rate now, but for the most part I'm happy with the rate and certainly wouldn't want to pay closing costs to refinance again.

Considering that I have never been late on a payment, mortgages included, and pay my credit charges off in full each month (which they can see) I was very surprised, and yes a tad insulted that they didn't approve me for this card, and I find their reasoning - that in 4 years my monthly payments will be higher than now - quite surprising.

My partner is rebuilding his credit, and was recently approved for a $1000 rewards Visa with cash back of 1%. The fact that he can be approved for that card with a 650 score and I can't be approved for any limit on FIA's card with a 740 score and a six figure income is ridiculous.

Message Edited by Mank on 04-15-2009 10:32 PM

[Anonymous]

Do all three of your reports list specific mortgage details? (more specific than conventional, FHA, VA, freddie/fannie mac) I had heard that TU was providing specific details like ARM or I/O but thought they were the only ones.

[Anonymous]

I was surprised by that too. I've seen the ARM details on my Transunion report, but I've never seen it on Eq or Ex. FIA definitely pulled Ex so I'm not sure how they saw the details of my loan. Maybe it's not included on consumer Ex reports, but is for businesses pulling your report. Does anyone know the answer to this one??

[Creditaddict]

I had to call 3 times for recon to get my approval... keep trying.

[Anonymous]

Thanks CreditAddict, that gives me some hope!

[Anonymous]

Small update: I just got my official denial letter in the mail and it says that I was denied based on information found on my Transunion report. I had seen the inquiry on Experian and wasn't surprised since that's who BOA has checked in the past and I know for sure that they didn't check Equifax, but maybe after seeing my mortgage listed on Experian they decided to get the details by looking at Transunion. Perhaps this is the new protocol in our foreclosure ravaged country. I bet Transunion is making some money off it.

Still going to try for a recon, I will let you all know how it goes! For the record, I know that it's a tough real estate market out there, but I don't really think that means everyone with an ARM should be denied BOA credit. I know that banks tend to be short sighted, but I'm guessing the world will look different in 2013.