Retired and getting credit cards with lower income
 

So I’m basically retired now due to health issues and having plenty of savings in retirement accounts that I can access early because of having disabled status, So my annual income has gone way done. I could make my income higher by reallocating my stock/bond investment portfolio. But I really don’t want to because I just don’t need any more cash to live off of and would rather leave it heavily in stocks for the time being. I realize a LOT of people would tell me not to do that. But I don’t care. What I’m trying to get some decent advice on is how to move forward with getting some credit cards.

The thing is, a few years back, maybe five years back, I was playing credit card bonuses heavily. I didn’t play them so heavily I ever got denied for a credit card. But that was back in the day would when you could apply for like five credit cards in the same day. I just counted, and I still have 12 open credit cards. And that’s after two were just cancelled for inactivity. I have no other open debt accounts other than these credit cards. And I do make sure they are all brought down to a zero balance every month, Last I checked my credit rating was in the 800’s.

I have no interest in playing credit cards back like I use to. But I’m just wondering if I should do anything to avoid getting cards I want in the future. I’ve already got so much open credit, and my income has gone way down,

The only card I want now is the Amex Blue Cash Preferred. I go into the Amex prequalified offers page and used my current real income, and instead of offering me the $300 bonus for being a new cardmember, they offer me a $150 bonus for upgrading from a Blue Cash Everyday that I alreadyhave. I am way to cheap to accept that. I want the new member bonus. I only have two AMEX cards currently open, a Blue Cash Everyday (with like a $3K credit limit) and a regular Everyday (wth a $16K credit limit).

In the next couple of years I plan on traveling more, including international travel, and the Chase Sapphire Reserve, the Chase Mariott, and the Capital One Savor cards look interesting to me,

After not applying for any cards for a few years, I did apply for 3 cards last year. And I just lied about my income and acted like I was still working because I didn’t want to fool with being denied, Maybe I should just keep lying? But I kind of don’t want to. I guess in case they ever actually ask for proof of how much I’m making every year,

Part of the problem is I!ve still got a lot of points laying around from back when I used to play points so hard. And I don’t want these companies being like, he’s making less money! Let’s cancel his card and revoke his points! Like I’ve got something like 170,000 Chase UR and 120,000 AMEX MR that I don’t want either company revoking.

These points I’ve got laying around is how I intend to travel without spending much more money. But that’s a whole different story.

It was hard to find a clear question in your post. That said, I have a similar issue which revolves around how much income a retired person should tout in a cc application. It will vary as I decide what amount of money to withdraw from retirement accounts. Especially now that RMDs have been deferred a few years, Since we had significant income prior to retirement, the drop is noticeable, but still variable.

A general question would be whether there are income estimates that are minimum thresholds that one should use to get certain higher tier cards? Even that is a fuzzy question, but there are probably a number of people in the same situation...

XOOZ, yeah. That’s basically my question.

And I’m guessing closing some of my 12 already open credit cards would help because it would lower my available credit, but I was hoping to get some kind of feedback before I did that.

Or maybe just run around and lower credit limits on a bunch of my cards? Like I don’t need a $16K limit on my AMEX Everyday. Since AMEX dropped return protection on it, I don’t even use that card any more, I just want to keep it because if it’s closed, I lose all my AMEX MR points.

I’m thinking just apply for the AMEX BCP that I want, and sort it all out in reconsideration with AMEX. I guess what’s holding me back is this the the first time my lower retirement income will be reported to the credit bureaus? But although it’s possible, it’s looking less and less likely I’ll return to work.

If they’d let me get credit cards based on liquid assets available this would be no problem. It’s the income variable that’s got me scratching my head.

I have read that credit card companies want you to use as much legitimate income as you can when you apply for a card.

Would this be a legitimate strategy for reporting income?

It’s a common guideline that you can spend 4% of your stock/bonds per year and almost certainly have money left over when you die (almost certainly because it depends on the performance of the market) Now 4% isn’t written in stone. Some people use 3%, some people use 5%. But if I could add 4% to my Social Security income, then I would be getting back closer to what I was making while working.

This has nothing to do with your income, it is simply because the system "recognized" you. Try applying in a Private or Incognito browser window to block cookies that they use to identify you.

I would apply using my real household income, including any disability or retirement benefits. Income affects the credit limit more than approval.

You will make life a lot simpler for yourself in the medium to long run if you just tell the truth. You have a reduced income but an extremely good credit rating.

Lying is a fraudulent activity. Do not lie

Yeah, I don’t think I’m gonna lie. If I’m not comfortable telling the truth, I’m just not gonna apply for any credit cards. And right now my biggest expense is I eat out all the time, so restaurants. And Discover it card is 5% cash back on restaurants this quarter. So if I apply for the AMEX BCP, it would be when I get closer to the $1500 limit for that on the Discover it card.

The only reason I even brought it up, is I was thinking out loud in the OP. And when you think through the process, the benefits of lying do pop up. But I’m aware you should try to avoid lying, especially in legal situations. I just skimmed the OP and t don’t think that came across well enough.

Like if I had sold any of my larger holdings in the last few years, I’d have plenty of capital gains I could report as income. But I’m really content just to let them ride at this point, I’m not gonna sell stocks and or bonds just so I can get a credit card. That would be ridiculous.

I didn't take it as you were looking for justification to lie but rather as a legitimate pondering of what is the right number when income can be variable. It's particularly interesting as to whether to claim only your own income or also claim income jointly with a spouse when you are applying for a card in your name only. I haven't applied in a while but I recall sometimes you are asked for household income, but maybe not always.

Now that we have retired, we actually try to manage our incomes and any withdrawals from IRAs/401Ks to get us to the maximum of the 12% tax bracket. If I needed something I would take out what I need but the jump from 12 to 22% tax makes me think twice about increased withdrawals.

I just looked at the AMEX BCP application. If you click on the little “I” icon next to where they ask for your income, this is the explanation they give:

”Include all income available to you. If under age 21, include only your own income. Income includes wages, retirement income, investments, rental properties, etc.

Alimony, child support, or separate maintenance need not be revealed if you do not wish to rely upon it.”

Now, it says “available to me”. and 4% of my stock/bond portfolio in my IRA’s certainly is “available” to me. I just don’t take it because I don’t need it.

Now most of the blogs I’ve read, when they talk about this stuff, they talk about income you report on your taxes. But that’s not what the application says. The application just says available. And the application could very easily say “income reportable to the IRS” if it wanted to. But it doesn’t,

What do you people think? Am I stretching things too far?

The final judge would be an AMEX financial review. But I’m thinking even if I called AMEX and they would let me talk to one of those guys (which they wouldn’t), it wouldn’t be a good idea to ask. All I’d get is a regular customer service person who wouldn’t know and would make something up. And may trigger a real financial review in the process.

You certainly can.

It's an open question whether you can include "income" earned in a retirement plan, but not withdrawn. Why not apply using the household income shown on your 2019 Federal tax return, and see if you are approved with a useable credit limit?

Credit card issuers are mass market companies. They are not interested in individual customers or circumstances. If they ask you to prove your income they will tell you what documentation to submit, and there won't be an opportunity to "explain" a discrepancy.

If I used what i reported on taxes last year, I guess I would just leave the income field blank on the application. Because I didn’t have to file taxes last year. Or the year before that.

I’m not sure you’ve read a lot about the AMEX financial review process. Because there are plenty of stories of an interview being part of the process. I just did a quick Google search, and here’s one: https://milestomemories.com/american...ancial-review/

Typically, FR has nothing to do with new card approval. The Flyertalk discussion is here: https://www.flyertalk.com/forum/amer...iscussion.html

I have had this question as well. My income is reduced, although not from retirement. I took a temporary position with an NGO. I am living in Africa. I am given an "allowance", but most living expenses are provided by the NGO. Although my current income is much lower on paper than it was when I had a regular job in the US, the money left over after all necessary expenses is roughly the same as it was because my living expenses here are very low. This makes it look bad on paper though, such as when I apply for a credit card. I have never been denied for approval, but I have been denied CLI's. It also seems to me that the CL's I'm given at approvals are lower than they used to be.

Are they lower than you need?