Low Income?

[Anonymous]

Hi all

I was wondering if its possible to have prime cards with high limits even though you are on a limited income like disability? How high can limits go in this situation? Thanks

[Peteyglad]

Depends on your credit history. My Amex card limit is over 50% of my stated income and chase has extended me over 60% of my stated income. 

[Anonymous]

i dont think so , but im no expert.

[Anonymous]

I'm not sure what the highest limit would be - hopefully someone who has been in a similar situation will chime in soon. I would say that it will depend on the lender, as I know some have internal limits that equal a percentage of your income, but I'm not really sure what that percentage would be. Then I have also heard of some who have way higher credit limits than their annual income, so it really does depend on the lender and your credit profile

[creditconcept]

YES it is possible!

[Anonymous]

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@Anonymous wrote:

Hi all

I was wondering if its possible to have prime cards with high limits even though you are on a limited income like disability? How high can limits go in this situation? Thanks

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Absolutely it is possible. Of course, it will not be as easy and you might need better credit than those with a higher income for the same limit, you can definitely get a great limit with low income. I'm not sure how low your income is or how large of a limit you consider to be "high", but I have a card with a $24.8k starting limit and that's 71% of my stated annual income.

[Anonymous]

I think you'll be fine.  My dad is on a fixed income and his limits were well over his stated income.  As long as you can charge and pay, act responsible with those cards, you will get higher limits.  Of course, not like a total of say 200k.  But enough to keep your UT in check if you charge something out of the ordinary.

[Bman70]

I'm not sure if it will limit individual credit lines, but numerous people here have overall available credit larger than their incomes. I doubt it will limit you overall.

If you receive money from a non-taxable source (which disabiity often is), lenders have a practice called "gross up", where instead of 100% of your income you put down 125%. Why? Because if a disabled person puts down $25,000 on an application, that represents take-home pay. A non-disabled person with the same take-home pay would be able to list his income at $32,000 or whatever depending on tax bracket. That's because it's industry standard to use gross income. The law was passed so the nontaxed person wouldn't always be at a disadvantage, having to put a lower number even with the same take-home pay. Note: I'm NOT sure this applies to credit cards, I came across it researching VA loans. It might be worth asking a tax or loan professional about it. 

[Anonymous]

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@Bman70 wrote:

I'm not sure if it will limit individual credit lines, but numerous people here have overall available credit larger than their incomes. I doubt it will limit you overall.

If you receive money from a non-taxable source (which disabiity often is), lenders have a practice called "gross up", where instead of 100% of your income you put down 125%. Why? Because if a disabled person puts down $25,000 on an application, that represents take-home pay. A non-disabled person with the same take-home pay would be able to list his income at $32,000 or whatever depending on tax bracket. That's because it's industry standard to use gross income. The law was passed so the nontaxed person wouldn't always be at a disadvantage, having to put a lower number even with the same take-home pay. Note: I'm NOT sure this applies to credit cards, I came across it researching VA loans. It might be worth asking a tax or loan professional about it. 

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Hmm, that's interesting. I'd really like to know how lenders would treat this, as my income is not taxable either. Is there something from a lender about this online? I think since they don't mention anything about this policy, you could have issues if they ever try to verify your income and you have overstated your income.

[Anonymous]

I'd say that if you're around $35,000 a year and your rent/mortgage isn't insane it;s certainly possible. By far the easiest way to get a high limit card is to already have one.

Take AmEx as an example. Say you get a starting limit of $5,000. 3x CLI it to $15,000. Six months later apply for, say, Chase Freedom. Don't be surprised to see yourself get a limit of $10,000 or so to start.