What affect will income decrease have on credit card limits

[CH-7-Mission-Accomplished]

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@Anonymous wrote:

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@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.

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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 

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+1000.  The lectures get old.

[CH-7-Mission-Accomplished]

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@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.

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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.

[Anonymous]

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.

[Anonymous]

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.

[EAJuggalo]

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@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.

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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.

[Anonymous]

^ that also depends on state as well.

[Kevin86475391]

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@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.

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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.

[Anonymous]

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. 

[Anonymous]

^ good idea