topic Re: Household income to be allowed on CC apps in Credit Cards

Household income to be allowed on CC apps

Walt_K — Tue, 30 Apr 2013 00:06:33 GMT

http://bucks.blogs.nytimes.com/2013/04/29/credit-eased-for-stay-at-home-spouses-and-partners/

Consumer Financial Protection Bureau is going to issue new rules which will allow applicants who are 21 or older to rely on other income, including that of the working spouse or partner, if the applicant has a “reasonable expectation” of access to it.

CCCs will have 6 months to comply.

And I so enjoyed those threads debating whether it was still legal/ethical to list HHI. I'll miss that.

Re: Household income to be allowed on CC apps

Anonymous — Tue, 30 Apr 2013 00:17:44 GMT

"The amendment has been submitted for publication in the Federal Register, the bureau said, and becomes effective upon publication. Card companies have six months after publication to comply with the new rule."

Interesting... How long is it expected to take between submission and publication?

Re: Household income to be allowed on CC apps

LS2982 — Tue, 30 Apr 2013 00:20:06 GMT

@Walt_K wrote:
http://bucks.blogs.nytimes.com/2013/04/29/credit-eased-for-stay-at-home-spouses-and-partners/

Consumer Financial Protection Bureau is going to issue new rules which will allow applicants who are 21 or older to rely on other income, including that of the working spouse or partner, if the applicant has a “reasonable expectation” of access to it.

CCCs will have 6 months to comply.

And I so enjoyed those threads debating whether it was still legal/ethical to list HHI. I'll miss that.

Still don't agree with it......

Re: Household income to be allowed on CC apps

staifokuzed — Tue, 30 Apr 2013 00:54:56 GMT

Hmmm! DW and I were just discussing a joint app next year that way we could legally use HHI. IM all for HHi.

Re: Household income to be allowed on CC apps

indiolatino61 — Tue, 30 Apr 2013 01:31:18 GMT

CCCs will have 6 months to comply.

And I so enjoyed those threads debating whether it was still legal/ethical to list HHI. I'll miss that.

Still don't agree with it......

Relying on someone else's income to pay your debts is a recipe for disaster. Couples break up, marriages end in divorce, people lose their jobs...then instead of only one person being responsible during hard times, it is then two. How many posts here have detailed "hubby" leaving nothing but financial ruin? It may seem great at the moment that you're granted a higher CL than you would have been able to get on your own, but it doesn't come without possible consequences. Just my 2 cents.

Re: Household income to be allowed on CC apps

09Lexie — Tue, 30 Apr 2013 01:33:46 GMT

I have to agree with using HHI. ESP on cc accts that ask for housing exp (rent, mtg) and the additional income is used to pay those bills.

Re: Household income to be allowed on CC apps

Anonymous — Tue, 30 Apr 2013 01:45:57 GMT

THIS is one of the many reasons that I feel HHI should be permitted. If they are going to take into consideration your full rent/mortgage, auto loan, etc (which are traditionally shared by both spouses) then they should also consider ALL income.

Re: Household income to be allowed on CC apps

LS2982 — Tue, 30 Apr 2013 01:47:45 GMT

@indiolatino61 wrote:
CCCs will have 6 months to comply.

And I so enjoyed those threads debating whether it was still legal/ethical to list HHI. I'll miss that.

Still don't agree with it......
Relying on someone else's income to pay your debts is a recipe for disaster. Couples break up, marriages end in divorce, people lose their jobs...then instead of only one person being responsible during hard times, it is then two. How many posts here have detailed "hubby" leaving nothing but financial ruin? It may seem great at the moment that you're granted a higher CL than you would have been able to get on your own, but it doesn't come without possible consequences. Just my 2 cents.

I agree with your statement.

Re: Household income to be allowed on CC apps

Anonymous — Tue, 30 Apr 2013 02:00:19 GMT

Not sure I see where it would be any more of a 'recipe for disaster' than for an individuals income. One never knows (especially in todays economy) when they may be laid-off. Never know when you may suffer serious long term illness or permanent disability. Point is that CCC's and consumers alike always take a risk when entering into a credit agreement. As a CCC I would feel more comfortable extending credit to someone with a HHI of 80K vs say an individual with an individual income of 35K. Perhaps a new question during recon will become...''and how long have you been married' .

Re: Household income to be allowed on CC apps

09Lexie — Tue, 30 Apr 2013 02:01:30 GMT

@ indiolatino61

I agree that one should rely on their own to pay for their own debt. However, if the cc companies are going to use the hh debt against one person in their approval matrix - if its joint then why can't they use that other persons income?

I like to live in the now and not the 'what could happen'. Meaning, I don't live my life planning on divorce, death of a spouse/partner or break up of a relationship. I have very few 'joint accounts with my DH of 30 yrs not because I'm planning on an undesirable consequence but because I saw how difficult it was for my mother to obtain credit after my father passed - and they had been married over 45 yrs.

Responsible people use credit wisely. Never buy more than what you can afford and always plan on a rainy day.

Re: Household income to be allowed on CC apps

Cdnewmanpac — Tue, 30 Apr 2013 02:10:22 GMT

We are not talking about joint accounts. Hhi has always been allowed for joint applications. This is about one person applying for credit, but listing another person's income as the means of repayment. The fact that the two people are married doesn't double the income and that income may have already been used as a promise to repay other debts. The joint expenses argument is easily solved by listing 1/2 of the mortgage if you pay half. But again, this isn't about 2 income families splitting expenses. It is about two members of a one income family both using that income to obtain individual credit. The fact that it is now legal doesn't change the ethical or economic value of the practice.

Re: Household income to be allowed on CC apps

WallyxD — Tue, 30 Apr 2013 02:11:31 GMT

@LS2982 wrote:
@indiolatino61 wrote:
CCCs will have 6 months to comply.

And I so enjoyed those threads debating whether it was still legal/ethical to list HHI. I'll miss that.

Still don't agree with it......
Relying on someone else's income to pay your debts is a recipe for disaster. Couples break up, marriages end in divorce, people lose their jobs...then instead of only one person being responsible during hard times, it is then two. How many posts here have detailed "hubby" leaving nothing but financial ruin? It may seem great at the moment that you're granted a higher CL than you would have been able to get on your own, but it doesn't come without possible consequences. Just my 2 cents.
I agree with your statement.

This is open to anyone to respond. But LS, I'm not 21 yet but I have a question regarding this. What do you feel about a 21 year old in school using their parents income on a CC app? As a student, I make no more than 10k annually and despite my file, I don't see myself getting approved for anything I really want/plan on applying for in the future so the household income would help me out alot. If you still wouldn't recommend using parent's income on CC app, what if we were to only report a part of their income on a CC app?

Re: Household income to be allowed on CC apps

Walt_K — Tue, 30 Apr 2013 02:29:28 GMT

Do you have reasonable access to your parent's income to pay your debts? I know I did not when I was 21. That may be different for some families, but I would guess without reading more about the reg that this was not targeted toward children using their parent's income.

Re: Household income to be allowed on CC apps

staifokuzed — Tue, 30 Apr 2013 02:30:59 GMT

IF you have household expenses you should be allowed to to use HHI. When your in a relationship you plan bills based on your HHI your credit profile should be no different. While trashing my credit my DW remained flawless and have relied on that for many years (around 800 mark). So I do agree not mixing credit. But If you need a creditor to see the whole picture then you got to do what you got to do. In my case was going to be joint app for home improvement. So YMMV.

Re: Household income to be allowed on CC apps

Walt_K — Tue, 30 Apr 2013 02:39:09 GMT

I think if you are objecting to the use of HHI for couples, you are making decisions at the margins rather than for the majority of couples. Do people really think that all else being equal, a single person making $35K per year has the same purchasing power as someone with the same individual income but who is married to a partner making $200K per year? Even if you personally hold this belief, shouldn't the person lending the money be allowed to disagree with you in evaluating the risk of lending to those two individuals.

Re: Household income to be allowed on CC apps

sarkell — Tue, 30 Apr 2013 02:41:36 GMT

I'm glad they are, dh pays me each month household expenses and etc I'm a sahm no joint checking etc. I also have my own other money but if fr eould be a pain I'd probably close my accounts. It will be easier. I make more than said on apps.

Re: Household income to be allowed on CC apps

WallyxD — Tue, 30 Apr 2013 02:48:02 GMT

@Walt_K wrote:
Do you have reasonable access to your parent's income to pay your debts? I know I did not when I was 21. That may be different for some families, but I would guess without reading more about the reg that this was not targeted toward children using their parent's income.

I wouldn't necessarily say reasonable access, but I do know my mom would help when she can, if I even needed her help. I think I read that 25k is desired minimum income for a lot of cards so I wouldn't even report all of my mom's annual income since I know they'd most likely want proof of income, and I'm not sure of the process, but I'm sure it would probably make me dread not using just my income in the first place. So at the most, I'd consider putting 25k down. And when they say HHI, I didn't know it specifically meant spouse's income, I figured it mean parent's income is allowed to be used as well.

Re: Household income to be allowed on CC apps

ezdoesit — Tue, 30 Apr 2013 02:50:46 GMT

I don't agree with using HHI. My wife is a stay at home mom I make around 80k. For example say I have CL on all my cards worth 100% of my annual salary some people on here have more, some with less of a percentage. Now my wife is using my salary to get cc in her name with say 100% cl of my annual salary. So the banks in total have 2x my salary for us to use at our disposal. Thats is asking for trouble not for me but the banks I mean they are in a business to make money also. I would rather the other partner be maybe be able use a percentage of my salary not the whole thing. Lets be real even though we share all our expenses do we really? And how can we when only one person is making a salary. Aside from investment Stocks, Mutual Funds etc.

Re: Household income to be allowed on CC apps

Walt_K — Tue, 30 Apr 2013 02:56:49 GMT

@Wally, it states you need to have a reasonable expectation of access to the other income. I haven't read the commentary for the new reg, but I would not describe adult children as having reasonable expectations of access to their parent's income.

Re: Household income to be allowed on CC apps

09Lexie — Tue, 30 Apr 2013 02:58:12 GMT

@ezdoesit

So are you saying your DW should not have cc's in her name cause she's a stay at home mom? Are you afraid that if she obtained cc's using your salary she would spend 2x as much?