topic Re: AU Spending Habits in Credit Cards

AU Spending Habits

Anonymous — Sat, 25 May 2019 04:37:35 GMT

I have an AU that spends more than my profile would support, but pays in full every month. Does the cc company care about that? Or do they realize it’s the AU card and take that into account?

Re: AU Spending Habits

Revelate — Sat, 25 May 2019 04:47:44 GMT

Don’t think that is possible to concretely state for any lender TBH; my guess is that it is a non-issue as long as they keep getting paid but it might look funny to them too.

Re: AU Spending Habits

Brian_Earl_Spilner — Sat, 25 May 2019 05:11:32 GMT

What kind of consideration are you thinking of, growth potential for you or adverse action?

Re: AU Spending Habits

Anonymous — Sat, 25 May 2019 05:15:42 GMT

I was thinking of AA. If they ask for POI, it was stated correctly but it wouldn’t support the spending.

Re: AU Spending Habits

FinStar — Sat, 25 May 2019 05:25:58 GMT

Which CC lender is this OP?

Re: AU Spending Habits

Anonymous — Sat, 25 May 2019 05:30:02 GMT

Chase

Re: AU Spending Habits

FinStar — Sat, 25 May 2019 05:39:06 GMT

@Anonymous wrote:
Chase

You should be ok. For instance, when I had an AU on my SW Premier CC, it was used A LOT (nothing sketchy or questionable, just standard charges) by the AU, Chase didn't bat an eye as long as the bill was paid.

Re: AU Spending Habits

Anonymous — Sat, 25 May 2019 06:05:45 GMT

Thanks for the replies. I figured chase should be ok. Amex I feel like it could be a problem.

Re: AU Spending Habits

FinStar — Sat, 25 May 2019 06:13:47 GMT

@Anonymous wrote:
Thanks for the replies. I figured chase should be ok. Amex I feel like it could be a problem.

AmEx can be finicky in certain situations, but it really depends. Especially, if the reported income doesn't match up or align to the spending patterns, more so on the AU account. IIRC, there's some older FR threads that point to some of those AA scenarios.

Re: AU Spending Habits

imaximous — Sat, 25 May 2019 13:05:57 GMT

OP, one more thing that you could consider is to include your AU's income to support the spending. Chase (and other lenders) allows you to use someone else's earnings in the total stated income as long as you have access to it for repayment. In your case, you could certainly do that because he/she is paying for his/her expenses regularly. If you think it could become an issue depending on the level of spending, you can just update your profile online.

Re: AU Spending Habits

CreditInspired — Sat, 25 May 2019 13:28:47 GMT

@Anonymous wrote:
I have an AU that spends more than my profile would support, but pays in full every month. Does the cc company care about that? Or do they realize it’s the AU card and take that into account?

Honestly, OP, just that you have some concern about this should give you pause and cause you to heed your gut feeling.

First, can you limit amount of monthly spend on AUs account? If yes, I suggest doing that immediately. Just because someone can PIF today, doesnt mean he/she can tomorrow. It’s Murphys Law—anything that can go wrong, will go wrong.

Second, your concern is very real because you are ultimately financially responsible for any and all expenses made on the card.

And, finally, keep this in mind—there’s a reason the AU doesnt have his/her own CC. Just my 2cents.

Follow your gut instincts.

Re: AU Spending Habits

Anonymous — Sat, 25 May 2019 13:44:00 GMT

@imaximous wrote:
OP, one more thing that you could consider is to include your AU's income to support the spending. Chase (and other lenders) allows you to use someone else's earnings in the total stated income as long as you have access to it for repayment. In your case, you could certainly do that because he/she is paying for his/her expenses regularly. If you think it could become an issue depending on the level of spending, you can just update your profile online.

The guidance issued by the CFPB is quite clear and certainly does not support what you are suggesting:

iii. Consideration of the income or assets of authorized users, household members, or other persons who are not liable for debts incurred on the account does not satisfy the requirement to consider the consumer's current or reasonably expected income or assets, unless a Federal or State statute or regulation grants a consumer who is liable for debts incurred on the account an ownership interest in such income and assets.

Having an authorized user pay their portion of credit card usage, or reimbursing the card holder for expenses incurred is not "a reasonable expectation of access" because such payments can be easily stopped.

Re: AU Spending Habits

imaximous — Sat, 25 May 2019 18:00:38 GMT

@Anonymous wrote:
@imaximous wrote:
OP, one more thing that you could consider is to include your AU's income to support the spending. Chase (and other lenders) allows you to use someone else's earnings in the total stated income as long as you have access to it for repayment. In your case, you could certainly do that because he/she is paying for his/her expenses regularly. If you think it could become an issue depending on the level of spending, you can just update your profile online.
The guidance issued by the CFPB is quite clear and certainly does not support what you are suggesting:

iii. Consideration of the income or assets of authorized users, household members, or other persons who are not liable for debts incurred on the account does not satisfy the requirement to consider the consumer's current or reasonably expected income or assets, unless a Federal or State statute or regulation grants a consumer who is liable for debts incurred on the account an ownership interest in such income and assets.

Having an authorized user pay their portion of credit card usage, or reimbursing the card holder for expenses incurred is not "a reasonable expectation of access" because such payments can be easily stopped.

I'm only going by the issuer's rules. I'd never read what you just posted, and I'm not going to pretend that I'm an expert, but if I'm applying with a certain bank, and such bank allows what I suggested before, I'm still in compliance. See the attached screenshot of a credit application by Chase and what they consider Total Gross Annual Income. The part that starts with, "If you're 21 or older..." sums it up. They don't even mention anything about "household" income like some other banks, so they're saying that you if receive money from others to pay your bills, you can include that income as well.

I do understand what you're saying, though. An authorized user isn't responsible for the debt and could potentially spend a ton of money and never pay it back. However, that's more of a risk that someone takes by adding an AU, but it's not illegal or fraudulent to use their income. I'm assuming OP trusts that person. I don't know the particulars of this situation (spouse, friend, relative, gf, bf, etc.), but the application makes no distinction as to whose income may be used for qualification purposes as long as you receive it to pay bills.

Re: AU Spending Habits

Anonymous — Sat, 25 May 2019 18:04:50 GMT

I didn’t think this would start such a discussion. I’m always receiving offers to add AU’s. So I figured cc company would take it into account.

Re: AU Spending Habits

imaximous — Sat, 25 May 2019 18:17:49 GMT

@Anonymous wrote:
I didn’t think this would start such a discussion. I’m always receiving offers to add AU’s. So I figured cc company would take it into account.

I think it's great to start a discussion because you may end up learning something new. I didn't know about the site that M&B posted, so I kept on reading to educate myself, and what I said is actually supported there too. It was in the same paragraph, but a few lines below:

"...such income is being deposited regularly into an account on which the consumer is an accountholder (e.g.,an individual deposit account or a joint account), or the consumer has a reasonable expectation of access to such income or assets even though the consumer does not have a current or expected ownership interest in the income or assets. See comment 51(a)(1)-6 for examples of non-applicant income to which a consumer has a reasonable expectation of access."

Re: AU Spending Habits

CreditInspired — Sat, 25 May 2019 18:16:51 GMT

@Anonymous wrote:
I didn’t think this would start such a discussion. I’m always receiving offers to add AU’s. So I figured cc company would take it into account.

Nope, what CCCs are looking for is more spend and more swipes on their cards.

Re: AU Spending Habits

Anonymous — Sat, 25 May 2019 18:32:32 GMT

Sure...whatever Chase states on its website supersedes federal law.

There's a specific legal definition of "reasonable expectation of access." The OP has not elaborated on the relationship between him/her and the Authorized User or the method by which the OP is reimbursed by the AU so its all speculation at this point.

I was going to elaborate but I saw the "i am not an expert" disclaimer and realized going into detail would be wasting time...plus i got distracted by adding Warren Buffett's income to my own since I've received checks bearing his electronic signature before.

Re: AU Spending Habits

Anonymous — Sat, 25 May 2019 18:30:19 GMT

CreditInspired:
Obviously that’s what they want. Congrats on not having any AU’s I guess.

Re: AU Spending Habits

Namaste7 — Sat, 25 May 2019 18:56:25 GMT

@FinStar wrote:
@Anonymous wrote:
Thanks for the replies. I figured chase should be ok. Amex I feel like it could be a problem.
AmEx can be finicky in certain situations, but it really depends. Especially, if the reported income doesn't match up or align to the spending patterns, more so on the AU account. IIRC, there's some older FR threads that point to some of those AA scenarios.

Speaking from experience with AMEX, I did not have issues (or encounter benefits) as an AU and heavy spender OR as having an AU, who was a heavy spender, on my account. In both cases, reported income was based on the main account holder and the AU’s income was not considered.

Re: AU Spending Habits

Anonymous — Sat, 25 May 2019 21:07:04 GMT

@Anonymous wrote:
Sure...whatever Chase states on its website supersedes federal law.

There's a specific legal definition of "reasonable expectation of access." The OP has not elaborated on the relationship between him/her and the Authorized User or the method by which the OP is reimbursed by the AU so its all speculation at this point.

I was going to elaborate but I saw the "i am not an expert" disclaimer and realized going into detail would be wasting time...plus i got distracted by adding Warren Buffett's income to my own since I've received checks bearing his electronic signature before.

IMHO, your implications in this post are a bit over the top.

The average consumer will not be privy to all the details of CFPB guidance, or federal laws you cite. It’s not a consumers responsibility to research laws or guidance above what an issuer may list as acceptable reported income.

That said, I’ve always felt it was best to just report my income on my cards. I’m not in a situation where my DW, or anyone else for that matter, is an AU on any of my accounts that see heavy use. If that were the case, however, I might change my mind. In the end, I think a lot of people follow an issuer’s guidance on what income can be stated. Depending on the circumstances, it might be helpful for the OP to report his AU’s income if it is readily available and meets Chase’s standards in their disclaimer.