topic Re: What affect will income decrease have on credit card limits in Credit Cards

What affect will income decrease have on credit card limits

Anonymous — Tue, 23 Feb 2016 09:50:52 GMT

My sisters' husband recently passes away and she has lost his income which was about $20,000. Her household income is now only about $16,000 per year. She has 2 Quicksilver cards from Capital One that she has had for about 5 years. Once she reports her lower income will Capital One lower her credit card limits? Her limits are currently $5,000 and $7,500. She has a small balance of $200 on one of the cards. In good standing; never late.

Re: What affect will income decrease have on credit card limits

Dahlia77 — Tue, 23 Feb 2016 09:56:06 GMT

@Anonymous wrote:
My sisters' husband recently passes away and she has lost his income which was about $20,000. Her household income is now only about $16,000 per year. She has 2 Quicksilver cards from Capital One that she has had for about 5 years. Once she reports her lower income will Capital One lower her credit card limits? Her limits are currently $5,000 and $7,500. She has a small balance of $200 on one of the cards. In good standing; never late.

Sorry to hear of her loss.

I'm not sure if they would decrease her limits unless for some reason she came under financial review. If she's in good standing and low balances it seems unlikely that they'd scrutinize her enough to find out that her income has declined. That would take a financial review. At least that's my take although you'll probably find others that can answer better.

Was her husband on the cards or just her? Because joint may make a difference that single wouldn't.

Re: What affect will income decrease have on credit card limits

Chris679 — Tue, 23 Feb 2016 09:56:22 GMT

Highly unlikely that they will lower the limits in my opinion.

Re: What affect will income decrease have on credit card limits

Anonymous — Tue, 23 Feb 2016 10:29:33 GMT

Thank you for your condolence. Only her on those cards. I think he had cards thru another bank.

Re: What affect will income decrease have on credit card limits

takeshi74 — Tue, 23 Feb 2016 14:32:43 GMT

We don't know how any creditor would handle it. We don't know the specifics of an creditor's underwriting critieria. Income is a consideration but we can't say that a reduction of $X income would lead to a CLD of $Y.

Re: What affect will income decrease have on credit card limits

CH-7-Mission-Accomplished — Tue, 23 Feb 2016 16:23:31 GMT

@takeshi74 wrote:
We don't know how any creditor would handle it. We don't know the specifics of an creditor's underwriting critieria. Income is a consideration but we can't say that a reduction of $X income would lead to a CLD of $Y.

The lender is highly unlikely to know about the drop in income unless she applies for a CLI and reports the new income. Actually, if her cards were individual accounts. she should have only been reporting her own income, so husband's loss of income should not matter.

If she can live with these limits, tell her not to apply for any CLI's and just wait for the automatic ones that come every once in a while. Also, pay off the cards every month except $5 on one card.

Re: What affect will income decrease have on credit card limits

Anonymous — Tue, 23 Feb 2016 17:04:48 GMT

@takeshi74 wrote:
We don't know how any creditor would handle it. We don't know the specifics of an creditor's underwriting critieria. Income is a consideration but we can't say that a reduction of $X income would lead to a CLD of $Y.

every post you go to you're just a negative nancy. obviously no one "KNOWS" but people could have had a similar experience. that's what this place is about so just enjoy it and quit going around with "only you can determine" "no one knows at all" "there's no way anyone can help with that"

it's okay to be a realist, but take the pessims elsewhere

Re: What affect will income decrease have on credit card limits

Anonymous — Tue, 23 Feb 2016 18:54:40 GMT

How the cards are used and overall credit profile is more important then income. I have been rebuilding for over a year and have 120k in income and low DTI but struggled until recently to get decent limits. My 24 year old daughter on the other hand has done a good job of keeping her credit clean, she goes to school and makes 14k a year working and has several cards with 5k or more limits and gets preapprovals all the time.

Re: What affect will income decrease have on credit card limits

Burned2manybridgesB4 — Tue, 23 Feb 2016 19:05:22 GMT

No joint accounts. I'd keep my mouth shut about income.

Re: What affect will income decrease have on credit card limits

Anonymous — Tue, 23 Feb 2016 19:15:07 GMT

i wouldn't keep my mouth shut about it. if you used household income to apply then tell them the new household income.

Re: What affect will income decrease have on credit card limits

CH-7-Mission-Accomplished — Tue, 23 Feb 2016 19:20:55 GMT

@Anonymous wrote:
@takeshi74 wrote:
We don't know how any creditor would handle it. We don't know the specifics of an creditor's underwriting critieria. Income is a consideration but we can't say that a reduction of $X income would lead to a CLD of $Y.
every post you go to you're just a negative nancy. obviously no one "KNOWS" but people could have had a similar experience. that's what this place is about so just enjoy it and quit going around with "only you can determine" "no one knows at all" "there's no way anyone can help with that"

it's okay to be a realist, but take the pessims elsewhere

+1000. The lectures get old.

Re: What affect will income decrease have on credit card limits

CH-7-Mission-Accomplished — Tue, 23 Feb 2016 19:25:21 GMT

@Anonymous wrote:
i wouldn't keep my mouth shut about it. if you used household income to apply then tell them the new household income.

2011, I am going to just play devil's advocate for a moment. Okay?

Let's say this was not the death of a spouse, but rather a job loss.

If you are the primary account holder and get laid off, do you have a duty to call your credit card companies and tell them you have lost your job?

Or how about if a couple decides to have a kid and mom decides to bow out of the work force for five years (or forever). Do you call your CC companies and let them know?

You would have the exact same loss of income.

I think if you get a FR, you submit the papers and see what happens. And if you request a CLI, give them the new information. But I disagree with initiating the move.

If you are really concerned, close one of the accounts.

Re: What affect will income decrease have on credit card limits

Anonymous — Tue, 23 Feb 2016 19:33:14 GMT

i can understand your point for sure. maybe from working in finance i see it from the other side lol. a finance company would like to know the most up to date info to determine if you're still good or if there's extra risk involved. either way isn't "dishonest" but i would personally inform them of a "permanent" change but not necessarily a temporary change if you understand what i mean.

if you lose a job then yes, income changes, but you're actively looking (in most cases) for new employment so i would imagine you'll get similar income in most cases. in those instances i probably wouldn't be so proactive about the situation. but if i use household income with a partner of mine and we split or one of us knows we won't work again i would probably update it.

Re: What affect will income decrease have on credit card limits

Anonymous — Tue, 23 Feb 2016 19:54:26 GMT

I'm just throwing this out as a data point as it may apply to this discussion.
With my job I get annual cost of living increases. Generally I wait a few weeks and then update my new income with all my creditors...its not much but I like to do this anyway. Recently I logged into my acct in order to update income (can't remember which it was either discover or Amex) I noticed a frequently asked questions section. Kind of breezed through it and noticed a Q regarding loss of income. Basically it stated that as long as the acct is continuing to be paid as agreed the loss of income won't results in a CLD. I'll take it with a grain of salt...obviously min payments on a maxed out card will likely still see AA regardless of employment...but I wouldn't worry to much. Most lenders probably have similar policies.

Re: What affect will income decrease have on credit card limits

EAJuggalo — Tue, 23 Feb 2016 20:05:45 GMT

@CH-7-Mission-Accomplished wrote:
The lender is highly unlikely to know about the drop in income unless she applies for a CLI and reports the new income. Actually, if her cards were individual accounts. she should have only been reporting her own income, so husband's loss of income should not matter.

Actually both Capital One and Chase that I know of allow you to include other household income if that income "is regularly used to pay your bills." Which means I get to include my wife's income on my accounts.

Re: What affect will income decrease have on credit card limits

Anonymous — Tue, 23 Feb 2016 20:14:22 GMT

^ that also depends on state as well.

Re: What affect will income decrease have on credit card limits

Kevin86475391 — Tue, 23 Feb 2016 22:40:58 GMT

@Anonymous wrote:
My sisters' husband recently passes away and she has lost his income which was about $20,000. Her household income is now only about $16,000 per year. She has 2 Quicksilver cards from Capital One that she has had for about 5 years. Once she reports her lower income will Capital One lower her credit card limits? Her limits are currently $5,000 and $7,500. She has a small balance of $200 on one of the cards. In good standing; never late.

Oh no, I'm so sorry for her loss and this difficult time for your family.

I actually have a slightly different perspective on this though. I think the tough reality is that your sister probably will need to update her income...but her literal income, not simply what she's reporting. $16,000 would be pretty tough to get by on. Will she be receiving any kind of death benefits from her husband's passing? If not, probably even if so, her financial situation is precarious and she may need to seek additional income.

In the meantime I wouldn't recommend that she initiate an income update with creditors. She has enough to worry about. I think she'll likely be able to fly under the radar indefinitely, especially with her accounts in such good standing.

Re: What affect will income decrease have on credit card limits

Anonymous — Wed, 24 Feb 2016 01:53:37 GMT

My sister and I thank you for your input. I have read these boards for the last year and have found them to be very helpful.because I get so many different perspectives. My sister is now hooked on the board as well LOL. She said while she looks for a better paying job she will not request any CLI's and will make sure to keep the cards in good standing. Once she finds another job she will then actively report her new income. Thanks again for all your help.

Re: What affect will income decrease have on credit card limits

Anonymous — Wed, 24 Feb 2016 02:05:40 GMT

^ good idea