topic Re: Annual Household Income in Credit Cards

Annual Household Income

EaglesFan2006 — Fri, 25 Oct 2013 12:40:43 GMT

Does a note saying something like "If you are 21, you may use income from others that you have reasonable access to pay bills" an indication that you can include household income (Ie you and a spouse)? If so, how do CCs plan on looking at that when evaluating?

Re: Annual Household Income

takeshi74 — Fri, 25 Oct 2013 13:02:02 GMT

I've never seen anything that specifically stated that other income could be included for a speciific age but whatever they say is what goes.

Keep in mind that you may have to provide evidence if it comes under scrutiny. Consider what you can provide.

Re: Annual Household Income

coldnmn — Fri, 25 Oct 2013 13:06:11 GMT

From what I have read on here according to the credit card act you can not use household income. You can only use personal income. They are trying to change the law. As far as I know it hasn't changed yet.

Re: Annual Household Income

Anonymous — Fri, 25 Oct 2013 13:33:42 GMT

I was thinking it had changed?

It is an interesting question. I'm curious as my husband's scores are about 60 points higher than mine but my income is 2x more.

Capital ones website under cli said something to the effect you can use spouse if you share the income ie is deposited into joint account.

However when we were going to app him fir discover it the online Rep said only if in a community property state. So ??

Re: Annual Household Income

toppers555 — Fri, 25 Oct 2013 13:41:02 GMT

It depends on the state. here in WI you use household, but I personally nly use my income.

Re: Annual Household Income

too-much-time — Fri, 25 Oct 2013 15:26:19 GMT

I don't think you can use the full household income unless explicitly specified. But I do think you can use half the household income as your individual income if you live in a community property state.

Added: Forgot all about the revised rule! ("reasonable expectation of access" ("account holder") to household income.)

Household Income Will Be Permitted Again on Credit Card Applications

Household Income Rule Will Help Stay-at-Home Spouses and Partners

Re: Annual Household Income

EaglesFan2006 — Fri, 25 Oct 2013 14:00:36 GMT

I agree, I think it's vague unless the words "Household Income" are stated. However, I think the wording i mentioned above indicates that you can use it... but I'm not sure.

I wonder what the benefits of doing so really are though regardless.

Re: Annual Household Income

coldnmn — Fri, 25 Oct 2013 14:26:04 GMT

I did a search on google it states on the credit card act of 2009 houshold income can't be used for a stay at home with no personal income unless filing jointly. The credit card act of 2013 doesn't mention it. In searching it wasn't the intent of the legislature to do this to the stay at home spouse. But I can't find anywhere where they made changes. I'm not saying changes haven't been made I just can't find any. The credit card act of 2013 became effective Oct 1st.

Re: Annual Household Income

jenn_bar — Fri, 25 Oct 2013 14:51:58 GMT

When I set my mom up with her CC, Chase and AMEX let her put their household income because they file jointly.

Re: Annual Household Income

cashnocredit — Fri, 25 Oct 2013 14:55:47 GMT

The CFPB, which produces the regulations for interpreting Regulation Z, has eliminated the requirement that only individual income is considered and expanded the allowable income rule to include that which a consumer reasonably has access to for those over 21 years of age.

http://files.consumerfinance.gov/f/201304_cfpb_credit-card-ability-to-pay-final-rule.pdf

The final rule amends Regulation Z to remove the requirement that issuers

consider the consumer’s independent ability to pay for applicants who are 21 or older, and

permits issuers to consider income and assets to which such consumers have a reasonable

expectation of access.

Note that this allows lenders to set stricter requirements if they wish. If they wanted to they could simply not lend to people under 21 y/o no matter their income or require IRS tax returns from every applicant. They don't because it would not be a smart business decision.

As for ambiguous "Income" application requests, it is a well established legal rule that ambiguity shall be interpreted in favor of the persons that didn't write the agreement.

Re: Annual Household Income

jenn_bar — Fri, 25 Oct 2013 14:59:45 GMT

@cashnocredit wrote:
The CFPB, which produces the regulations for interpreting Regulation Z, has eliminated the requirement that only individual income is considered and expanded the allowable income rule to include that which a consumer reasonably has access to for those over 21 years of age.

http://files.consumerfinance.gov/f/201304_cfpb_credit-card-ability-to-pay-final-rule.pdf

The final rule amends Regulation Z to remove the requirement that issuers
consider the consumer’s independent ability to pay for applicants who are 21 or older, and
permits issuers to consider income and assets to which such consumers have a reasonable
expectation of access.

Note that this allows lenders to set stricter requirements if they wish. If they wanted to they could simply not lend to people under 21 y/o no matter their income or require IRS tax returns from every applicant. They don't because it would not be a smart business decision.

As for ambiguous "Income" application requests, it is a well established legal rule that ambiguity shall be interpreted in favor of the persons that didn't write the agreement.

Hmmm this is interesting. So depending on bank rules, I could include my BF's income in the picture as we share expenses and share the place. At least that is how I am interpreting it?

Re: Annual Household Income

cashnocredit — Fri, 25 Oct 2013 15:12:00 GMT

@jenn_bar wrote:
@cashnocredit wrote:
The CFPB, which produces the regulations for interpreting Regulation Z, has eliminated the requirement that only individual income is considered and expanded the allowable income rule to include that which a consumer reasonably has access to for those over 21 years of age.

http://files.consumerfinance.gov/f/201304_cfpb_credit-card-ability-to-pay-final-rule.pdf

The final rule amends Regulation Z to remove the requirement that issuers
consider the consumer’s independent ability to pay for applicants who are 21 or older, and
permits issuers to consider income and assets to which such consumers have a reasonable
expectation of access.

Note that this allows lenders to set stricter requirements if they wish. If they wanted to they could simply not lend to people under 21 y/o no matter their income or require IRS tax returns from every applicant. They don't because it would not be a smart business decision.

As for ambiguous "Income" application requests, it is a well established legal rule that ambiguity shall be interpreted in favor of the persons that didn't write the agreement.
Hmmm this is interesting. So depending on bank rules, I could include my BF's income in the picture as we share expenses and share the place. At least that is how I am interpreting it?

That's right. A bank or other creditor may allow this under the CFPB's final regulatory rules.

Re: Annual Household Income

Anonymous — Fri, 25 Oct 2013 15:46:39 GMT

The under 21 can not use household income to help keep the "protections" for students intact as they can't use parental incomes on their application.

Also I read the CFPB ruling also restricted to spouse or domestic partner who did not work "outside the home." Is this untrue?

Re: Annual Household Income

jenn_bar — Fri, 25 Oct 2013 15:54:14 GMT

I'm trying to get an idea of which banks follow this rule strictly, but am stuck on AMEX currently. Anyone have any idea where they keep their application terms and conditions? Not any of the links at the bottom have mentioned income!

Re: Annual Household Income

youngandcreditwrthy — Fri, 25 Oct 2013 15:54:16 GMT

Most banks will tell you what they want.... GE usually asks for "individual net income" while it seems that Chase just wants an income. Lol Can't really remember the others.

Re: Annual Household Income

PokemonMaster — Fri, 25 Oct 2013 15:56:05 GMT

I saw that message when I was filling out the online form for a CLI on my Citi Card. The feeling I took from it was exactly that, a spouse/significant other or parents.

Re: Annual Household Income

sccredit — Fri, 25 Oct 2013 16:21:16 GMT

reasonable expectation of access

Those are the key words. In other words, you can use the joint income of you and your spouse if you file a joint tax return, IMO at least. Trying to justify anything beyond that would be pushing it.

Re: Annual Household Income

Anonymous — Fri, 25 Oct 2013 16:36:54 GMT

Not sure when the 6 month deadline for credit issuers to implement the householdish income thing is. This is why you are seeing such different things from different companies as some have implemented vs others. So wait till it is fully implemented to see how these companies inact it. I didn't read the actual ruling but here is article:

http://www.consumerfinance.gov/newsroom/the-cfpb-amends-card-act-rule-to-make-it-easier-for-stay-at-home-spouses-and-partners-to-get-credit-cards/

Again the stay at home spouses/etc. are mentioned. However maybe rule allows banks to go further, but banks must allow stay at home. If that is the case, then we will see signficantly different allowed income from different lenders. Of course this is all signficiantly more complicated than before the government got involved (no surprise here).

Re: Annual Household Income

jenn_bar — Fri, 25 Oct 2013 16:43:06 GMT

I believe that if you do have reasonable access to another's salary and live within the same household (or maybe not in extraordinary cases) you should be able to use their salary and rely on it.

Personally, I've been with my BF for five years, lived together for two, and don't see us getting married anytime soon. Maybe in 5-10 years... However, we both share finances and nothing is "cookie cutter." AKA More similar to my parents who file jointly than a new-couple.

Annddd if he worked for Starbucks I would even be able to get benefits on his behalf!

I just think our country is adapting to a ~~new~~ variety of ways of cohabitating and accepting it more with more opportunities than before.

Re: Annual Household Income

Anonymous — Fri, 25 Oct 2013 16:42:31 GMT

@Anonymous wrote:
Not sure when the 6 month deadline for credit issuers to implement the householdish income thing is. This is why you are seeing such different things from different companies as some have implemented vs others. So wait till it is fully implemented to see how these companies inact it. I didn't read the actual ruling but here is article:

http://www.consumerfinance.gov/newsroom/the-cfpb-amends-card-act-rule-to-make-it-easier-for-stay-at-home-spouses-and-partners-to-get-credit-cards/

Again the stay at home spouses/etc. are mentioned. However maybe rule allows banks to go further, but banks must allow stay at home. If that is the case, then we will see signficantly different allowed income from different lenders. Of course this is all signficiantly more complicated than before the government got involved (no surprise here).

I'd say easily more than 90% of the time this is the case, lol.