g289t

One of them is. It's the card with the lowest CL of any I have, and it's my daily driver.

To illustrate my income, I'll use very fake numbers as I'm somewhat private. Let's say that my income was $100 a month. After all normal living expenses were covered, I had $20 left over. I could do whatever I wanted with it: go on vacation, put it through the paper shredder, give it away, use it as kindling, buy an iPad, whatever. I don't need it.

Now, my income is $50. However, instead of expenses of $80/month, my expenses are $30/month. I still have the same $20 left over to do whatever with it. When I apply for a credit card or apply for a CLI, I have to report an income of $50 rather than $100, even though my extra cash is the same.

I realize that there is actually some variation in the situation, as some of the $80 and $30 monthly expenses could be put on the credit card. But in the end, my financial "risk" to the bank is similar. However, my income is reported as half of what it was, even though my overall financial viability is the same.

BostonNewYork

I think you should report income honestly. I would give consideration to the discussion above. If you are declined for a card, due to inadequate income, you can call the reconsideration line and talk to a credit analyst. They have more knowledge and ability than a regular CSR. You might need to lower other CL; perhaps to the extent that your total CL would be less. The systems might also lower your credit lines after denial and not of the cards you want lowered. However, a credit analyst can reallocate your reduced credit lines even if they do not give you a new card.

You discussed applying for an AMEX card and stated your AMEX limit is 16,000 which is more than what you ever expect to need. If I were you I would preemptively lower that limit. However, I would leave it high enough that you could reallocate some of the reduced AMEX limit to the new card and still have adequate limits on both. I doubt the new AMEX application would result in the other card being closed. You could improve your chance of being approved by both reducing the AMEX limit and doing some not insignificant spend on the AMEX card for six months before applying. Of course you will get less rewards than you would have elsewhere with this spend. How much reduction in the value of earned rewards would that be? Do you need to spend on that card? How much and for how long? None of us know AMEX's algorithms so the best we can do is make educated guesses. You need to decide.

If you are considering lower limits on other cards to make yourself seem less risky, I would read the thread(s) about credit line increases and read between the lines. You might conclude that it is best to let things be and not apply. With 12 cards and reduced income,if I were to apply for cards, I would only apply for cards you think you will make long term use of, and only from issuers that you already have a relationship with.

All of this is my opinion and hypotheses. Other people may have other opinions and hypotheses. None of us know any issuer's algorithms.

I hope this helps.

vanillabean

Interesting. I take it you are referring to a defined contribution plan such as an IRA, not a defined benefit plan as in pension. I know of no answer to the question other than, as I see it, yes it’s income because I have just as much access to it as my checking account or yes I can point to the monthly average of distributions over the last two years.

travelpye

While I am not considering applying for a new card, I have received requests when logging into my Chase account asking me to update my income. As I retired late last year, my income this year is only about 60% my pre- retirement income , as I am opting not to touch my IRA or other retirement income. Following the standard 3-4% withdrawal guideline, my income would be stable, and I had wondered if or how to factor that fact in my response.

i do have several credit cards with Chase. My combined credit lines would now be roughly equivalent to my current income if reporting only my social security, pension and misc other income and excluding any reference to my IRAs or other retirement savings.


my questions are

1.My concern is that they might see that and arbitrarily close accounts, despite my record with them. Is that a risk?

2. When updating income is there any way to indicate the additional income available from retirement savings?
3.. Is there any risk in just ignoring these requests to update the info?
4. Should I immediately lower credit limits on several of these cards before updating income?

as a side note, due to reduced travel due to pandemic, I have been thinking of closing my Marriott and old IHG card. I have kept them, as the free nights are normally easy to use and more than completely offset annual fees in normal times and make it easy to keep my points balance active. But these are not normal times and I am unsure how long before I resume traveling. So I am considering closing both, and could do so if that would seem prudent.

thanks!

mia

I would continue to report calendar year 2019 income until a 2020 income tax return is filed, because if an issuer asks for documentation they will most likely request a Federal income tax transcript, and 2019 is the most recent available.

SPN Lifer

To constitute ”income”, the available funds must have been ”realized” as income. Until then, any possible withdrawals only constitute ”potential income”.

Thus, while the IRA funds are indeed “available” to you, the are not yet “available income”, but​​​​​ merely “available potential income”.

The distinction is important because falsifying income on a credit card application could be grounds for the bank to cancel an account and vacate any sign-up bonuses and rewards earned with the card.

For U.S. residents, the very safest way to resolve such questions could be to use the definition of “income” set forth in various IRS publications, including distinctions between “realized” and “recognized” income. Unrecognized income such as tax-free bond income may indeed satisfy banking definitions, but unrealized income never will.

notquiteaff

When I had W-2 income, I did not count my IRA/401k funds (hypothetical 4% withdrawal of it) as income. I suspect few people would. I basically reported my (our) actual Form 1040 income.

That 1040 income has dropped now that I don't have a W-2 anymore, but I continued to report that when applying for a new card. I am ignoring the requests to update my information that pop up occasionally when logging into the banking site. FWIW, I am not a "radical churner". My new card applications were

2018: 5
2019: 1
2020: 1

I am currently working on right-sizing my card fleet by eliminating cards I don't really need anymore and downgrading a few others.

Yes, I would hate to have my relationships with Amex or Chase disrupted by what they might consider deliberately incorrect income reporting.

Out of curiosity, how would you classify dividend income? In a taxable account it's realized and appears on the 1040 (and is potentially taxed). That same dividend income earned in an IRA or 401k is not reported to the IRS. My custodian/brokerage statements might show it in the transaction history, but I am not sure I would want to get into a debate with a bank on whether that counts.

SPN Lifer

I agree with your application of the same distinction. If realized, it is income.

In an IRA or 401(k), if not distributed, the dividend has not yet been realized. It would be income when transferred out of the retirement account to you personally.

username

I am going to retire in the next few months and am wondering about this too.

I have saved a decent amount of frequent flyer points from years of work travels and the concept of "paying for vacations" in retirement will be pretty new I am more worried about my frequent flyer accounts going to zero than bank accounts since the frequent flyer accounts still devalue faster and don't pay dividends and interests

I an thinking about getting multiple sub-$100 cards from hotel chains that come with free nights. It seems a good deal, assuming I don't need to stay at places that exceed the point / category limitations. That is allowed, right? Specifically I am thinking about the Chase IHG and Marriott cards. I am not sure if I want to get them before I retire since dealing with COVID extensions have been a pain.

Also, I guess the credit card companies don't consider assets / savings? How about the banks that you already have a relationship with? Some Canadian banks used to offer kind of secured credit cards to new immigrants (e.g. put C$100,000 and you get a credit card with a $20,000 limit). Do US banks do that?

I have always under-reported my income when applying for credit cards - not that I make that much money but they don't need to know. They are handing them out like candies anyway.

Thanks.

mia

Are you asking about multiple copies of the same card?

username

No, different versions of the card - I think both IHG and Marriott have newer versions but I still have both of the legacy cards...

mia

Both IHG and Marriott have restrictions:

IHG Rewards Club Premier MC- 125K Points, Free Night, $3K spend

Chase Marriott Bonvoy Cards, 2019 to present

The Marriott rules are dense reading because they reference cards issued by both American Express and Chase, and they reference cards using both their current and previous names. Marriott has separate rules to open a card with a bonus and without the bonus.

Dr Jabadski

(Never seen it phrased that way, presumably by “sub-$100” you mean an annual fee less than $100.)

Both Hyatt and IHG have (relatively) new BUSINESS versions of their credit cards which are distinctly different products from the personal versions, the same person can have and get SUBs from both consumer and biz versions at about the same time. Although the Hyatt biz AF is $199 the two easily attainable $50 credits (for spending more than $50 at any Hyatt property) effectively bring it to sub-$100.

Hilton has long had a business and multiple personal versions. Marriott has multiple versions, from multiple issuers; as mia wrote (above) their rules are dense reading.

There are also multiple sub-$100 (some $0) Chase UR and AmEx MR cards which earn points which are easily transferable to several different hotel programs.

Mike B

I am pondering some of the issues discussed in this thread, as late last year I inherited a half interest in a farm with substantially varying income each year, and it looks like 2022 will be especially uncertain! I have applied for two credit cards since then, and used a “generic” typical recent income in addition to the salary I’ve steadily earned for many years. This almost doubled my precious income. I suspect it was the trigger for Chase to ask me to call fraud prevention when I listed the new figure on an application, since they had shown a lower income for many years. I explained why my income jumped, and had no problem being approved. I think I can defend what I am doing, but I have wondered what the best way is. It will get even more complicated since I will be retiring in less than a year. A nice problem to have, though!

Mike B

I have both of the IHG cards you mention, and no problems from Chase or IHG. At one time I had all three Hilton personal cards, though I cancelled the Surpass and am patiently waiting for an upgrade offer on the Hilton free card. So it is definitely possible, though I have no experience with Marriott.