@sosabe77 wrote:
@NRB525 wrote:
@sosabe77 wrote:
@techiegirl wrote:I just refinanced and had to provide w-2 and tax returns to the bank for the mortgage. I don't see what difference is it if cc companies see that information as well. A loan is a loan. Granted, the amount is different.
Well, there's obviously a difference...evidenced by the fact that mortgage companies always ask for that information and CC companies rarely, if ever, do. Lol.
As one begins to cross $25k in available credit on a single card, however, the exposure the lender has grows, the potential difficulty in collecting grows. As the AMEX CLI are granted, you are given one little box to assure them "Yeah, I make $XXX per year" and they trust you. Beyond a certain point, however, they have to ask "Show us we can trust you".
You can choose not to provide the 4506-T when asked, and will just be capped with the existing credit limit.
And yes, I realize you may not ever use that $26k CL, but the nature of credit lines is, if granted, it's there. And they have little subsequent control over you using that. So, they put up this gate to re-baseline their trust for you. You choose whether you really need the CL.
Cheers!
I understand why they do it. I was just addressing her comment that there's no difference because "a loan is a loan". That was an oversimplification that completely disregarded installment vs revolving, inherent term length, etc.
I think the phrase "a loan is a loan" applies here. For small amounts, the volume of those loans is huge, and they have to just take some risk that some will default. A mortgage and HELOC have some differences in that the lender needs to actually see a physical property that they can file a lien on, so the documentation by definition of that step is more intense. Even a HELOC tends to not be for $5k, rather much larger.
Regardless of type of loan, as the amount increases, the invasive questions and information requirements increase (which is the original trigger of this thread).
@longtimelurker wrote:
@NRB525 wrote:
@sosabe77 wrote:
@techiegirl wrote:I just refinanced and had to provide w-2 and tax returns to the bank for the mortgage. I don't see what difference is it if cc companies see that information as well. A loan is a loan. Granted, the amount is different.
Well, there's obviously a difference...evidenced by the fact that mortgage companies always ask for that information and CC companies rarely, if ever, do. Lol.
As one begins to cross $25k in available credit on a single card, however, the exposure the lender has grows, the potential difficulty in collecting grows. As the AMEX CLI are granted, you are given one little box to assure them "Yeah, I make $XXX per year" and they trust you. Beyond a certain point, however, they have to ask "Show us we can trust you".
You can choose not to provide the 4506-T when asked, and will just be capped with the existing credit limit.
And yes, I realize you may not ever use that $26k CL, but the nature of credit lines is, if granted, it's there. And they have little subsequent control over you using that. So, they put up this gate to re-baseline their trust for you. You choose whether you really need the CL.
Cheers!
RIght to some extent, but there is still a big difference. A CC company can for any (non-prohibited) or no reason, CLD or close the account. Mortgages have much greater protection, I can apply for a bunch of new credit cards, have lots of late payments on them etc and providing I am still current on the mortgage, nothing can be changed. ANd even when I default, the process of attempting to get the money takes much longer with many hurdles to jump through (although not always followed!)
And as you said, the line is then in the CC case, but for any purchase, they have the option of denying it, whereas the mortgage money has really gone from the issuing institution.
No, I think basically they are the same, a loan is a loan. The fundamental aspect of all loans is you the borrower promising to repay over some time period. As the amounts grow, the collateral and information requirements, and as you point out the legal protections against random lender changes, all increase. At the root, however, the borrower still is making some sort of promise to pay back. That is where the simplification applies correctly.
@longtimelurker wrote:OK, but as others point out, usual practice is for the issuers to treat them differently, nearly all conforming mortgages require extensive documentation, including tax returns, whereas nearly all credit cards do not (and at application time, it is very rare indeed). So if the issuers treat them differently, that suggests that "a loan is a loan" is too simple to be a useful guide.
The OP did not have to provide tax returns on the original application. However, as has been seen with many AMEX CLI journeys, once one reaches the undisclosed limit that AMEX has set, somewhere in the $25k range, the level of documentation increases. Thus: a loan is a loan and loans follow a predictable scale of increasing information requirements as the loan size increases. Lenders may vary in their thresholds, but that increasing information requirement does not.
And my axiom still stands: A loan is always about whether the borrower will pay it back, without regard to how much is being borrowed.
@EvilR-T wrote:So you'll let a creditor know your social, address and phone number, mother's maiden name, when, where and what you buy, where you work, and willingly let them know income. But proving income is where you draw the line? I'm not trying to start an argument here, I'm just trying to understand the logic.
I don't know the OP's situation, however, I would never send in my tax returns for a credit card. It has nothing to do with me not "proving my income," I am happy to provide pay stubs/1099's/W-2's, however, as others have said, the tax return is simply too intrusive. My tax return as of 2013 was 102 pages and there is no credit card company that needs that much information on me, if they do, I dont need them. Just my 2 cents.
@Lyythine wrote:
@EvilR-T wrote:So you'll let a creditor know your social, address and phone number, mother's maiden name, when, where and what you buy, where you work, and willingly let them know income. But proving income is where you draw the line? I'm not trying to start an argument here, I'm just trying to understand the logic.
I don't know the OP's situation, however, I would never send in my tax returns for a credit card. It has nothing to do with me not "proving my income," I am happy to provide pay stubs/1099's/W-2's, however, as others have said, the tax return is simply too intrusive. My tax return as of 2013 was 102 pages and there is no credit card company that needs that much information on me, if they do, I dont need them. Just my 2 cents.
And that is absolutely your choice. A loan is a contract between two agreeing parties, after a negotiation about terms of that agreement. You have simply chosen not to continue the negotiations. Nothing wrong with that at all.
This argument, I mean debate, on whether a 4506T is asking for too much information is very intriguing. But, I am wondering. Would people provide this information on day 1 of applying for a CC if the company asked? I bet so. I bet most people would still provide this information if CC companies asked it on day one. It's seems it is just something about the point of them asking for it after the relationship has been already started.
@VirtualCuriosity wrote:This argument, I mean debate, on whether a 4506T is asking for too much information is very intriguing. I might jar some guilty feelings loose with some people with this, but I am not directing this towards the OP or anyone who truely feels violated in some private way when it comes to this form. But, I am wondering. Would people provide this information on day 1 of applying for a CC if the company asked?
I would if the CCC was serious in analyzing my information and the info allowed them to get to the CL they are willing to give me.
I would not start with a 4506T for a $5k or $2k CC.
@VirtualCuriosity wrote:This argument, I mean debate, on whether a 4506T is asking for too much information is very intriguing. I might jar some guilty feelings loose with some people with this, but I am not directing this towards the OP or anyone who truely feels violated in some private way when it comes to this form. But, I am wondering a few things. Would people provide this information on day 1 of applying for a CC if the company asked?
Privacy concerns aside, I know some people have run into issues with the fact that they state their current income level, but Amex asks for tax documents from the previous year or two, which have had a different income amount. So that discrepancy causes them problems (especially during a financial review).
In my own personal case...actually I won't even bore you with the details. Lol. But it's not as much about the invasion of privacy to me as it is about the additional inconvenience for a CLI that I don't even really need (I was just trying to take advantage of Amex's generous CLI policy, especially with no hard inquiry).
Either way, there were some great points raised by people on both sides of the debate.
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