@Anonymous wrote:
@wmarat wrote:
As I see it, Amex wants to verify your income in some cases.
Amex can ask for pay stubs or w - 2, or bank statement, but Amex wants you to give up your privacy and permit them to have your tax documentation, therefore to provide them with information that they do not need to verify income.
Respectfully I disagree. Income can and often is misstated. Paystubs can be misleading and even forged, as can be w-2's. Only an official tax return filed with and paid against are true indications of income.
AMEX charge cards represent a different type of debt than traditional CC's. You have no option of minimum payments, therefore large CL's or charges represent a much higher degree of default risk if the income isn't in line, has changed or was misrepresented.
Just as in a mortgage, the lender has every right to request whatever form of income verification they may deem appropriate. The consumer is under no obligation to comply. The result will be decline of application or closure of account, but the consumer is in control of that scenario.
A $20,000 balance, due in full at statement, is very much a different debt than a $20,000 balance with a minimum payment of a few hundred dollars.
Once an individual undergoes an FR with tax returns, if the income is in line, then they are very likely to have less issues with AMEX from that point forward. If the account was approved merely on stated income, then AMEX is trusting the stated income. But at anytime they deem appropriate they want to verify the income, they are more than within their rights.
Just a few minor points ...
AmEx financial reviews are not limited to charge cards, they have also been done on credit card accounts that do have minimum payments offered (although AmEx much prefers PIF).
AmEx sometimes asks for costly accounting reports in addition to, or instead of, tax return information. And tax returns are not particularly accurate sources of income information in some cases. Depending on the time of year the F/R is conducted, the tax return information may be a year old or more.
Income requirements related to a mortgage and a credit card are generally not comparable. In the case of a mortgage, you are dealing with an obligation of much larger scale. In addition, for a mortgage, the income review occurs once, prior to the approval of the application.
If a customer does provide proof of sufficient income to AmEx as part of a financial review, that does not necessarily mean the customer is less likely to reviewed in the future. Some AmEx customers have received multiple F/Rs, including getting a second F/R within a year of the first.
Bottom line, AmEx hits their customers with F/Rs, yet their competitors do not, for comparable credit products. And even after doing that, AmEx has reported a default rate for those products that is no better than their competitors.
Back to the topic - the most common adverse action for CLI requests these days has come from Bank of America, and it is very good advice for BOA customers to refrain from making CLI requests unless they are completely willing to accept any unintended consequences. BOA (along with Citi) have the weakest balance sheet and and are actively looking to reduce the overall credit limits they offer to their customers. Kinda similar to a situation where, if a company is tightening its belt and seriously looking to cut costs in a bad economy, it's usually a bad time to approach your boss and ask for a raise, even if you think you deserve it. You may get a pay cut instead or find yourself at the unemployment office ...
