Wife applied for United card and call into reconsideration. She had a baby this year and took 5 months off, so her income was much less than previous years.
The chase analyst told her that her credit limit was too high based on her rorted income for 2012 and proceeded to tell her that they will need to review and reduce her limit and denied the app. Anyone else experienced that same thing? So if you had a temporary reduction in income they reduce your overall credit limit? Very shady. She oly has two chase card and hadnt applied for one over a yr.

That stinks. Did she put less income on her app?

As far as the bank is concerned, it does not care whether your reported income is a temporary or not, all it goes by is what is being stated on your application. So if she was out of work for 5 months, then yes, in the bank's eyes, the income was drastically reduced by almost 50%, and not justified the previously granted credit line.

Had she not called to recon, the app may have a chance to get approved with low limit.

When she called and then a human looked over things, that was like opening a can of worm when you had 50% less income than before.

the language i've seen in chase united apps recently requests "gross income" which they define as "...income you can use to repay your debts. Salaries, investments, rental property proceeds, Social Security benefits and retirement accounts are some examples."

seems straightforward at first, but the use of plurals also suggests it's acceptable to include a spouse's income and assets, which might have avoided this rejection. other issuers clarify this particular ambiguity by specifying "household income." but it sucks that she was penalized for honesty, when i would argue that there's plenty of room to be honestly confused by the way it's requested.

with the rare exception of the AMEX FR and the even more rare request for income verification via tax forms reported elsewhere, credit card application requests for information about "income" seem likely to end up being what i would call Made Up Numbers.

it may be tempting to conclude that sometimes people lie about their income on applications--and i'm sure some do--but the only thing that seems to be consistent across issuers in the way they request information about "income" is ambiguity!

in the grand scheme of things, it's easier for issuers rely on credit scores than subjecting applicants to the rigamarole of 20 questions on an applications to suss out a borrower's ability to repay, but in that case, the OP's incident description is also bogus... though it could also be the case that other changes to the applicant's credit report played a role in the decision.

but the way credit card issuers ask about income today reminds me of the pre-crisis approach to mortgage applications. it's like we all have "liar loans"--even those of us who are trying to be as honest as we can be--just because of the way the information is requested.

She'll just need to reapply in six months since her iome will be back to normal this year with no baby expected. It sounds like regardless of us calling in they were going to review her credit based on income reported. So i guess its best to not apply or report you annual income without adjusting for gross.

Kind of funny.. I recently applied for a chase card for my dad and he just reired with ss income only. Way less than what he made when he was working and he had to call in to move some from one card to another. He still have a lot of credit reative to income but thy did not reduced or talked about reducing credit. A bit inconsistent here. They both have flawless credit and minimal credit line usage. Maybe we just got a tough rep this time. Just becareful.

This is your taxpayer dollars at work and part of Dodd frank and ability to pay requirements that have been placed on credit card issuers. The ambiguity is because the rules initially stated that household income could not be used so gross got around that but household did not. If the issuers run foul of the law no one gets credit. The issue which began this pointbwa that new additional informationwa offered to the bank and the customer no longer had the ability to pay.

Had a friend to call in once to ask for a CL increase with Chase. Instead of an increase, they reviewed her history (good payment history w/ high utilization) and told her they needed to decrease her limit and immediately closed the account because with the new decreased limit she was now over.

She tried to access immediately (by phone, I believe) and denied access since the account was shut down. The rep. hung up real quick after closing her account.

Sounds strange for someone with high credit scores. But this was several years ago when the economy was plummeting.

Note: she also had the change of income (decreasing) for that year as well.

Not really strange at all. When you call for a line increase a re underwriting occurs. With the new information of a decreased income her risk was greater and she did not qualify for credit.

There is a lot of debate about income as a predictor of risk. It is not part of a fico score for instance and all incomes can have good or bad scores. The regulators take an absolutist view of income. Which they can not even degine whose or what items should be included as income as a key factor insetting credit limits. At some point clearly lack of income will influence bill payment but it really should be up toeahbank to determine their risk appetite.

Moral. If there is a decrease in income it will affect even current cards with on time payments if it is disclosed to the lender.

Did they change the rules now where you CAN use household income? My wife is now a stay at home mom and she could not get any cards in her name since her income is now $0

just put household income in there, that's the only number that I've put in all my application and i won't change it regardless of wording unless they really ask me specifically about it.

also, i saw that they randomly increased the limit on some of our cards. I don't know why since they are cards in the sockdrawer. One was increased from $22k to $25k and the another was increased from $10k to $20k

Why does everyone put their spouse's income as $0 if they are a stay at home parent? Just put the household income... Other than the rare Amex review, the other credit card companies don't care. They never actually verify anything. I've made up number for years and never been turned down once.

I disagree about making up a number as that is not ethical. However, I have always assumed that the annual income question is "expected" annual income, not last year's annual income. After all, don't they need to look at future income, not past income when it comes to ability to pay future debts. If you made 100K last year but are now unemployed, you would not put 100K as your annual income. If you are just graduated from college and started a new job with 60K salary, you would not put $0 income.

Therefore, if she is back at work full time I would think she would use her regular annual salary when completing the application.

It was part of the Card Act, and adopted Fall 2011.

There was a further rule changed proposed in October 2012 that just ended the 60 day comment period. If adopted household members over age 21 will have to check a box that asserts they will have access to the household income on their apps.

I am no psychic, but I think this will be adopted, and I think it will be in the first half of the year. I track this pretty closely for the same reason.

Gross income is like Gross sales..

It is what is in the register at the end of the day....

Net income is what is left after the bills are paid.

If you take home less you should have a lower credit line...

Why would you want a greater credit line when you have less income...

Unless you were a politician.

You are right on all points. Like most regulation it works or worked to plug some holes. Eg young people wo didn't have sufficient income and were not able to handle the credit( and that of course is the governments business to fix) but created unintended consequences like stay at home persons Potentially the
household managers had to provide individual income only when the debt would be paid out of household income. Banks have had regulators reviewing adherence to the rules in effect at any given time and large fines can be levied for non compliance. On balance the new rule should increase the flow of credit for most. And there are till rules for the under21 seeking credit.