Credit Card Programs - I'm afraid my short career in churning could be over, What do I do?

Hi All,
I am very frustrated today! I applied last week for the United Explorer Plus card in order to get the 65,000 bonus miles and no annual fee. I applied online and got and wait and see note. I called today and they asked me to verify some of the facts on my application. They asked me what I do and I answered I am a homemaker, then they asked my annual income and I told them my annual household income. Then they asked how I make that money and I answered it's my husbands income. The lady then told me I can't use that as my income. I was so mad, I said, "What do you mean? We file income taxes jointly, I pay too, How do expect me to make money when I chose to stay at home and raise my three children?" I said this isn't fair you are discriminating against stay at home moms. She told me this is part of the Dodd Frank act and they no longer accept annual household income for those applying separately. She was so unsympathetic that I asked for a supervisor. He was very nice and explained the same things. I explained to him that I already have two cards with him and money in their bank. He looked and moved some credit over so he could open my new card. I am happy with that, but now what do I do????
How am I ever going to apply for the Southwest card and the Chase ink bold, Chase Sapphire card? What am I going to do? Any suggestions? I told my husband I have to get a job now to keep opening cards for the miles. Is it only Chase that has this rule? Are there any people that have no income source themselves that are able to apply for and get cards? BTW, I am the primary on an AMEX Platinum and many, many other cards, with a credit rating over 800.
Any suggestions? Is my only option to open all cards for my husband only? With his permission, of course.

This is true. I just wrote about this earlier today:

Household income is only allowed between spouses in community property states. Per the CARD Act, banks are supposed to be required to use the applicant's income only. This has caused some blowback from non-working spouses and hearings were held in the spring, but so far the regulation put in place in late 2011 (related to the 2009 legislation) has not been changed. Mind you the specific purpose of the rule was to cut back on kids in college using HHI to dig a hole with a lot of debt.

Community property states are an exception since state law says that both spouses equally share in each other's asset and income while married.

Do you live in a community property state?

Not that I am an expert, I am just following this issue as my wife is in the same shoes as you. We do not live in a community property state. We are very much by the book people, so we don't push particularly as my credit is sufficient to get what ever we need (so far).

A lady in Virginia started a group to advocate change and there were hearings in the Spring in Congress related to this matter. The legislative intent was to stop college students from relying on household income to dig giant debt traps. There was bipartisan support to providing relief for stay at home spouses.

The authority for this change went into effect in November 2011 (IIRC) by way of regulation, not statute. The CFPB has jurisdiction over the regulation and are supposedly considering revising it. There is a petition at change.org related to this matter. I have not signed it as I don't like petitions, even if I agree with them. I think the politics and optics on this are negative and the rule will be changed, eventually.

I am sure many folks continue to make apps using household income. I have seen articles where folks suggest calling themselves consultants or something like that. I don't think there would be any consequence, aside from the occasional denial. Personally, that is not an approach I would take or recommend.

A thought that just popped in my head was that the CARD Act made changes to personal credit cards. I would wonder if business applications would be handled differently in the eyes of the law, or the lenders.

Are you telling me that Chase was wrong in their evaluation of my applcation because I do live in a community property state? So, do I now have a chance to stay in the game?
Thanks again for your help!

Are you telling me that Chase was wrong in their evaluation of my applcation because I do live in a community property state? So, do I now have a chance to stay in the game?
Thanks again for your help!

The chances of a front line CSR or even a 1st line supervisor knowing who can/cannot use HHI is fairly slim. Just keep applying using your HHI and if you run into a problem, make a call and see if you can solve the issue. I would not list "homemaker" as your occupation, just use "other" if it is available.

Business cards do not follow the same rules and HHI can be used for everyone, most card companies have HHI listed on the application. To be fair, even on personal cards a case can be had for listing HHI, given that some companies tell you to list all income you have available to repay your debts. It's on the card companies to enforce this new regulation, not on the consumer. It's not your fault that Chase was vague on the application and you used your HHI. I'm sure there are a lot of people out there that still do (knowingly or unknowingly). Until every application asks for "your individual income only" people can assume what they want from "total annual income" or "total income." I'll add though that business cards do not follow the same consumer protections, whether or not that makes a difference is up to you.

With an 800 FICO, I would think most of your approvals will be instant and if not just identity questions might follow. Try to minimize the red flags as stated above and you should be fine.

Are you telling me that Chase was wrong in their evaluation of my applcation because I do live in a community property state? So, do I now have a chance to stay in the game?
Thanks again for your help!

Yes and no. Yes, in community property state, HHI is personal income since by state law you have full rights to your spouses income. No, Chase wasn't wrong on the general rule, but it likely would have been up to you to assert the correct position. Lucky break on your part to live in the right state.

A quote from this article is relevant:

Community property laws lessen rule's impact

The CARD Act rule forcing credit card issuers to weigh only the applicant's individual income will have minimal impact on stay-at-home parents in states with community property laws.

Community property laws typically ensure that both spouses have equal rights to assets and income—as well as equal responsibility for debts—that are acquired during a marriage, although specifics vary from state to state.

That means stay-at-home parents applying for credit cards in their own names in a community property state can claim a share of their spouses' incomes and assets.

States with community property laws include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

http://hffo.cuna.org/12433/article/3288/html

Note, Alaska couples can opt in to community property:
http://en.wikipedia.org/wiki/Community_property

Only problem I see is once Chase have flagged your application once, it may or may not flag it again on future applications. I know that Citi did that to my wife's CC applications before.

Have your husband pay you for babysitting, cooking, etc. and now you are self employed and/or the owner of a small business.

Are you telling me that Chase was wrong in their evaluation of my applcation because I do live in a community property state? So, do I now have a chance to stay in the game?
Thanks again for your help!

If you have a private banker you can apply through her and that can help mitigate the problems of the CARD Act; at least in my experience.

I was going to apply for the Chase BA card for my wife until I saw the details they wanted for income verification. We were about to go out the door for vacation so I put it on hold until we got back and now the offer is gone. But I do think it is only Chase that is starting to require specific income sources for the applicant. This is pretty recent too. I did an app-o-rama for here back in April and she was approved for 7 of 8 cards. The only one not approved was the Ink Bold because they stated she did not have enough income in the "business" that she stated. She did get the approval for the Chase SP card at that time though. But they just asked for HHI then. I hope this is not going to trickle down to other CCs that would put a dent in our miles earnings.:(

I was going to apply for the Chase BA card for my wife until I saw the details they wanted for income verification. We were about to go out the door for vacation so I put it on hold until we got back and now the offer is gone. But I do think it is only Chase that is starting to require specific income sources for the applicant. This is pretty recent too. I did an app-o-rama for here back in April and she was approved for 7 of 8 cards. The only one not approved was the Ink Bold because they stated she did not have enough income in the "business" that she stated. She did get the approval for the Chase SP card at that time though. But they just asked for HHI then. I hope this is not going to trickle down to other CCs that would put a dent in our miles earnings.:(

Just out of curiosity, what did you list as her occupation? What income verification did they ask for? I've never had any problems with Chase, but would be interested to hear what might be going on.

I did not complete the app. I went on vacation and when we came back the BA offer on the BA airline site was over. Have not tried another app-o-rama in her name yet. We are about to go out the door again to Europe so we will try when we get back, again.

Have your husband pay you for babysitting, cooking, etc. and now you are self employed and/or the owner of a small business.

And you are now liable for income and social security taxes, and your husband is responsible for paying the employer's share of social security taxes.

Next bright idea?

Sorry to hear this happened, unfortunately it's not new. My wife was denied beginning of the year for the Chase United Explorer card for the same reason. HHI is fine but her staying at home with kids was not. Ironically she got approved for a CSP last August, and an Ink Bold not long after that. So I guess about the new year is when they started being a pain.

Listing "retired" as the occupation for a non-working spouse has never caused a problem in the past ;)

Sorry to hear this happened, unfortunately it's not new. My wife was denied beginning of the year for the Chase United Explorer card for the same reason. HHI is fine but her staying at home with kids was not. Ironically she got approved for a CSP last August, and an Ink Bold not long after that. So I guess about the new year is when they started being a pain.

The regulation went into effect in October 2011. I suspect the banks changed their application processes on a rolling basis.

Listing "retired" as the occupation for a non-working spouse has never caused a problem in the past ;)

LOL, until they look at the application and notice the DOB and figure spouse is only 24 y/o.

And you are now liable for income and social security taxes, and your husband is responsible for paying the employer's share of social security taxes.

Next bright idea?

I don't think you're liable for those if the annual income is less than $600 right? Not sure though.

I don't think you're liable for those if the annual income is less than $600 right? Not sure though.

You're always liable to pay taxes on every cent you earn subject to income tax brackets. The $600 only refers to the limit over which an org has to send you a 1099.

You're always liable to pay taxes on every cent you earn subject to income tax brackets. The $600 only refers to the limit over which an org has to send you a 1099.

So true, IRS requires you to pay for ANY earnings even if no 1099 is sent to you. Lets say you earn $500, that amt is suppose to be reported ,But its just harder for them to track without the 1099. But I've heard people getting caught by the IRS thru the reverse method. IRS audits the company itself, finds out everyone the company paid in the past year and then check if all those individuals reported the earnings (regardless of whether 1099 was sent or not). Now, they flag and target those that didn't report with a fine tooth comb audit (even if its just $500) with the mindset that if you didn't report this then what else didn't you report).

My wife and I started a small home based business for this very reason. She "makes" less than $5000 a year with it, but it avoids those questions. If you want any advice, PM me.

say that you work. stop being so honest, haha. you are self-employed and make 60,000 a year. I've only been asked to verify income once on a personal card and that was by citi for the aa cards. I simply ignored them. A few months later I applied again and they approved my cards without asking for verification. I guess its not 100% street legal to stretch the truth about your income and work situation, but if you are as responsible as you say you are, its a white lie that you will love to make :)

say that you work. stop being so honest, haha. you are self-employed and make 60,000 a year. I've only been asked to verify income once on a personal card and that was by citi for the aa cards. I simply ignored them. A few months later I applied again and they approved my cards without asking for verification. I guess its not 100% street legal to stretch the truth about your income and work situation, but if you are as responsible as you say you are, its a white lie that you will love to make :)

repeat after me.. i misinterpreted the rulez.. lol

Thanks for this helpful thread. We don't live in a community property state, and my wife does make a small income, but she just recently went 1 for 3 on apps. Granted, I think part of the problem was a mistake on my part having her apply for 2 chase cards (Hyatt and Priority Club) but the recon lines didn't like her income when they asked (on the app we used the total household income). I guess I should just chalk it up to a good learning experience and keep in mind for next time.

Just lie and be done with it.

The CRPB will propose a rule change to the legistration this fall that will hopefull end this discrimination. Here is the article:
http://money.cnn.com/2012/09/24/pf/stay-at-home-parents-credit-card-rule/index.html?section=money_pf&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_pf+%28Personal+Fi nance%29&utm_content=My+Yahoo
Hope fully this will open up the gates for all the stay at hope spouses!

Just lie and be done with it.

+1 lol

+1 lol

Lololol. I had just over $20,000 in credit card "credit" about a month after my 18th birthday. Thank you FirstUSA and WatMu!