What defines "income" on a retiree's credit card application?

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michaeljc70
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Re: What defines "income" on a retiree's credit card application?

Post by michaeljc70 » Mon Apr 15, 2019 7:48 pm

DrGoogle2017 wrote:
Mon Apr 15, 2019 7:23 pm
Chicago60 wrote:
Mon Apr 15, 2019 6:03 pm
Lafder wrote:
Mon Apr 15, 2019 9:17 am
I usually just put 100,000$ Or maybe sometimes I put 200,000.

I figure my real income is none of their business and I am giving an underestimation.

What about using your expenses? Your income exceeds that. Or the amount you deposit into your bank account each year?

As long as you are not being fraudulent, does it matter? If you are inflating your income to obtain debt you are going to default on it is entirely different than a card you are responsible with.

I think using your last employment income sounds ok too.

I am curious what others say.

lafder
Since you asked....if you "put 100,000" or "put 200,000" and that is not accurate, it sure seems like you are committing fraud to me.
Fraud for what? The whole reason they ask for income is to see your ability to pay, it may help them determine your credit line. When I hear fraud, I think of Wells Fargo. A big bank, defrauding customers on purpose. Not a single high level executive is in jail.
It's loan fraud and it is a Federal crime.

Specifically, False Statement in a Loan and Credit Application (18 U.S.C. § 1014) with a maximum penalty of thirty years in prison and a $1,000,000 fine as well as restitution.

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munemaker
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Re: What defines "income" on a retiree's credit card application?

Post by munemaker » Mon Apr 15, 2019 7:50 pm

DrGoogle2017 wrote:
Mon Apr 15, 2019 7:23 pm
Chicago60 wrote:
Mon Apr 15, 2019 6:03 pm
Lafder wrote:
Mon Apr 15, 2019 9:17 am
I usually just put 100,000$ Or maybe sometimes I put 200,000.

I figure my real income is none of their business and I am giving an underestimation.

What about using your expenses? Your income exceeds that. Or the amount you deposit into your bank account each year?

As long as you are not being fraudulent, does it matter? If you are inflating your income to obtain debt you are going to default on it is entirely different than a card you are responsible with.

I think using your last employment income sounds ok too.

I am curious what others say.

lafder
Since you asked....if you "put 100,000" or "put 200,000" and that is not accurate, it sure seems like you are committing fraud to me.
Fraud for what? The whole reason they ask for income is to see your ability to pay, it may help them determine your credit line. When I hear fraud, I think of Wells Fargo. A big bank, defrauding customers on purpose. Not a single high level executive is in jail.
If you misrepresent yourself on a credit card application, I don't see how it could not be termed fraud. The bank is making risk decisions on how much credit to grant you, if any, based on the information you provide.

TravelGeek
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Re: What defines "income" on a retiree's credit card application?

Post by TravelGeek » Mon Apr 15, 2019 8:22 pm

Trader Joe wrote:
Mon Apr 15, 2019 6:16 pm
Also, why would you ever need to apply for a credit card in retirement? I have never heard of this.
Not sure if this is a serious question, but if it is, read this parallel thread:

viewtopic.php?f=11&t=278863

And for more info, this mega thread:

viewtopic.php?t=192008

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GerryL
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Re: What defines "income" on a retiree's credit card application?

Post by GerryL » Mon Apr 15, 2019 8:29 pm

Last year I applied for a Costco cc at the store counter as a rep filled in the form. At this point I had been living on severance pay and savings for several years and had no income beyond dividends and a pair of mini pensions. When the rep asked for an income figure, I said “I’m retired. My income is whatever I want it to be.” (That is, whatever I choose to withdraw from my savings.) I settled on a figure that would include my SS and RMDs in the coming years.
I’m pretty sure that having a solid credit history accounts for the immediate approval.

JoeChick10
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Re: What defines "income" on a retiree's credit card application?

Post by JoeChick10 » Mon Apr 15, 2019 9:35 pm

Why don’t you just call the credit card company and ask them?

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beyou
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Re: What defines "income" on a retiree's credit card application?

Post by beyou » Mon Apr 15, 2019 10:18 pm

michaeljc70 wrote:
Mon Apr 15, 2019 6:58 pm
beyou wrote:
Mon Apr 15, 2019 3:50 pm
michaeljc70 wrote:
Mon Apr 15, 2019 10:36 am
The problem with using a tax return is no income/dividends/capital gains from IRAs would show. Clearly that is income. It is just not taxable income. I would include whatever is on your tax return plus non-taxable income.
They want to know what income you will have access to that you can spend and pay off your bills.
If you are taking RMDs then yes include that, but I would not include an IRA if you are below 60 and not taking RMD yet.
For my kids, I read that if they can reasonably expect $ from parents, that can count.
For myself as a retiree in the future, I would just take my 4% SWR as my income, if that is your SWR.
I can take any or all of my $$$ out of my IRA to pay bills at any time. Or I can pull them from a taxable account. Spending money you have does not make it income. A 4% SWR is a withdrawal and not necessarily income. I don't think they are looking for some number you choose.

This site gives a breakdown amongst a few different cards:

https://millionmilesecrets.com/guides/w ... lications/

In general, it says:

Most banks allow you to include income beyond traditional salaries and wages. You can include things like:

Investment income from stocks and rental properties
Social security
Retirement benefits
Military allowances
Income from others you use to regularly pay your bills if you’re 21 or older
I wish the IRS agreed with you, but they call it income when filing your tax returns.
The reality is that the definition on a credit card app is very flexible and ill defined.
The IRS has it well defined, so that is a possible source of justification of income stated, but not the only one.

https://studentloanhero.com/featured/ca ... lications/
https://www.nerdwallet.com/blog/credit- ... plication/

"In 2013, the Consumer Financial Protection Bureau (CFPB) amended the act to offer more detail."
applicants who are 21 and older can claim any income to which they have reasonable access. The amendment also explicitly states that stay-at-home spouses or partners can count a working spouse’s income on an application.

But the “reasonable access” definition may also extend to the following:

Personal income
Allowances and gifts <---- who woulda thought gifts = income ?
Scholarships and grants
Trust fund distributions
Retirement income <---------
Social Security income

If a creditor can prove in court that you committed fraud when applying for a certain card, it could make that debt unable to be discharged in a bankruptcy proceeding, says Scott Maurer, an associate clinical professor of consumer law at Santa Clara University. On very rare occasions, people have also been convicted of fraud for lying about their income on credit card applications, resulting in steep fines and jail time.

But if you’ve reported your income to the best of your knowledge, don’t worry about this.

“Proving fraud is not easy, and a consumer who truthfully lists monthly income that happens to be irregular is not going to come close to losing such a suit,”

Seems to me if you are conservative about listing income you can document (RMD distributions, dividends or other)
and you actually pay your bills (an assertion of the OP) then there is NOTHING TO WORRY ABOUT. Nobody will ask to prove
anything unless you default, and if you default after some events out of your control (stock market meltdown and your IRA is wiped out),
then you would have no ramifications in terms of fraud.

This is ill defined for young and not yet employed as well as retired, but just list what you can actually expect to have available to pay your bills and you'll be fine.

michaeljc70
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Re: What defines "income" on a retiree's credit card application?

Post by michaeljc70 » Mon Apr 15, 2019 10:30 pm

beyou wrote:
Mon Apr 15, 2019 10:18 pm
michaeljc70 wrote:
Mon Apr 15, 2019 6:58 pm
beyou wrote:
Mon Apr 15, 2019 3:50 pm
michaeljc70 wrote:
Mon Apr 15, 2019 10:36 am
The problem with using a tax return is no income/dividends/capital gains from IRAs would show. Clearly that is income. It is just not taxable income. I would include whatever is on your tax return plus non-taxable income.
They want to know what income you will have access to that you can spend and pay off your bills.
If you are taking RMDs then yes include that, but I would not include an IRA if you are below 60 and not taking RMD yet.
For my kids, I read that if they can reasonably expect $ from parents, that can count.
For myself as a retiree in the future, I would just take my 4% SWR as my income, if that is your SWR.
I can take any or all of my $$$ out of my IRA to pay bills at any time. Or I can pull them from a taxable account. Spending money you have does not make it income. A 4% SWR is a withdrawal and not necessarily income. I don't think they are looking for some number you choose.

This site gives a breakdown amongst a few different cards:

https://millionmilesecrets.com/guides/w ... lications/

In general, it says:

Most banks allow you to include income beyond traditional salaries and wages. You can include things like:

Investment income from stocks and rental properties
Social security
Retirement benefits
Military allowances
Income from others you use to regularly pay your bills if you’re 21 or older
I wish the IRS agreed with you, but they call it income when filing your tax returns.
Not necessarily. If it is coming out of a Roth or you made non-deductible contributions to a traditional IRA it may not be taxable. Besides that, a credit card application doesn't ask for taxable income which is what is on a tax return. If you have interest on municipal bonds is that income? It doesn't go on a federal tax return but I would include it on a credit application.

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beyou
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Re: What defines "income" on a retiree's credit card application?

Post by beyou » Mon Apr 15, 2019 10:38 pm

michaeljc70

I said " possible source of justification of income stated, but not the only one." in relation to the IRS.
So what part of "not the only one" was unclear ?

OnTrack
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Re: What defines "income" on a retiree's credit card application?

Post by OnTrack » Mon Apr 15, 2019 11:22 pm

From: https://www.nerdwallet.com/blog/credit- ... plication/
"Can Credit Card Companies Tell If You Lie on an Application?"
"If you knowingly report any inaccurate data on a credit application, you’re committing fraud. Credit fraud can cost up to $1 million in fines and/or 30 years of imprisonment. This little white lie just turned into a whale. It’s not worth it."

michaeljc70
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Re: What defines "income" on a retiree's credit card application?

Post by michaeljc70 » Mon Apr 15, 2019 11:30 pm

beyou wrote:
Mon Apr 15, 2019 10:38 pm
michaeljc70

I said " possible source of justification of income stated, but not the only one." in relation to the IRS.
So what part of "not the only one" was unclear ?
You said "I wish the IRS agreed with you, but they call it income when filing your tax returns."

I really am unclear as to what the IRS disagrees with me on.

DrGoogle2017
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Re: What defines "income" on a retiree's credit card application?

Post by DrGoogle2017 » Mon Apr 15, 2019 11:41 pm

munemaker wrote:
Mon Apr 15, 2019 7:50 pm
DrGoogle2017 wrote:
Mon Apr 15, 2019 7:23 pm
Chicago60 wrote:
Mon Apr 15, 2019 6:03 pm
Lafder wrote:
Mon Apr 15, 2019 9:17 am
I usually just put 100,000$ Or maybe sometimes I put 200,000.

I figure my real income is none of their business and I am giving an underestimation.

What about using your expenses? Your income exceeds that. Or the amount you deposit into your bank account each year?

As long as you are not being fraudulent, does it matter? If you are inflating your income to obtain debt you are going to default on it is entirely different than a card you are responsible with.

I think using your last employment income sounds ok too.

I am curious what others say.

lafder
Since you asked....if you "put 100,000" or "put 200,000" and that is not accurate, it sure seems like you are committing fraud to me.
Fraud for what? The whole reason they ask for income is to see your ability to pay, it may help them determine your credit line. When I hear fraud, I think of Wells Fargo. A big bank, defrauding customers on purpose. Not a single high level executive is in jail.
If you misrepresent yourself on a credit card application, I don't see how it could not be termed fraud. The bank is making risk decisions on how much credit to grant you, if any, based on the information you provide.
Fraud is when you intentionally misleading them like you have zero income and you list $500,000. It’s not fraud if you make $201,500 for example, and just list $200,000 or $199,950 and list $200,000.

Lafder
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Re: What defines "income" on a retiree's credit card application?

Post by Lafder » Mon Apr 15, 2019 11:44 pm

I feel a bit guilty now with the negative responses. But not enough to change my ways on this matter.

I put less than my actual income. I have NEVER overstated my income, but I have understated it a number of times on credit card applications.

I stand by my opinion that listing less than my actual income is not a fraud that any credit card company would ever prosecute. I will take my chances.

My actual income is just none of their business, again, in my opinion.

They certainly do not need the exact amount of my adjusted income on my tax return.

I am talking about for example a Target application or Lowes credit card app that I want purely for the extra 5% off purchases. I am not talking about credit for a mortgage that would want my tax returns and actual numbers.

I do not even know why they ask those questions when they have access to a credit report showing my history of debts and payments.

lafder

bltn
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Re: What defines "income" on a retiree's credit card application?

Post by bltn » Tue Apr 16, 2019 12:22 am

Why not just get a debit card? For someone who pays their card balance every month, a debit card would be fine.

SoAnyway
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Re: What defines "income" on a retiree's credit card application?

Post by SoAnyway » Tue Apr 16, 2019 1:00 am

RickBoglehead wrote:
Mon Apr 15, 2019 9:23 am
I haven't given an accurate number on a credit card or loan application ...ever. I always understate it. When you indicate "Retired" for occupation, and then give your interest, dividends, and capital gains as income, that's the end of the story.
+1 with the red caveat.
Nothing in this post constitutes legal or medical advice. | Consult your attorney or physician to verify if/how anything stated might or might not be applicable to your specific situation.

Leesbro63
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Re: What defines "income" on a retiree's credit card application?

Post by Leesbro63 » Tue Apr 16, 2019 1:48 am

123 wrote:
Mon Apr 15, 2019 9:19 am
They often ask for income not taxable income. If you have investments there are typically capital gains (whether they are realized or not). Taxable income, from a tax return, may not be an indicator at all when you consider the exemption of muni bond interest etc.
Agreed with all but unrealized capital gains. I don’t think that “income” in any way, shape or form. Why not include home appreciation then? Unrealized cap gains may just be a temporary bump up in the value of your asset. Could be here today, gone tomorrow. Tax free muni bond interest is income. Non-taxable social security is income. RMDs and even withdrawals from Roth IRAs could be considered income. But not unrealized capital gains I don’t believe.

MikeG62
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Re: What defines "income" on a retiree's credit card application?

Post by MikeG62 » Tue Apr 16, 2019 7:16 am

Leesbro63 wrote:
Tue Apr 16, 2019 1:48 am
123 wrote:
Mon Apr 15, 2019 9:19 am
They often ask for income not taxable income. If you have investments there are typically capital gains (whether they are realized or not). Taxable income, from a tax return, may not be an indicator at all when you consider the exemption of muni bond interest etc.
Agreed with all but unrealized capital gains. I don’t think that “income” in any way, shape or form. Why not include home appreciation then? Unrealized cap gains may just be a temporary bump up in the value of your asset. Could be here today, gone tomorrow. Tax free muni bond interest is income. Non-taxable social security is income. RMDs and even withdrawals from Roth IRAs could be considered income. But not unrealized capital gains I don’t believe.
I find it interesting that RMD’s from an IRA seems to be universally acceptable by most commenters above as income a CC company would value when in fact it is simply a movement of assets from one pocket to another (and in fact reduces ones net worth by the amount of taxes paid). Sure it is income to the IRS (and most states), but does it really make one who is receiving an RMD a better credit risk than the person who is a few years younger and yet to begin taking their RMD’s?
Real Knowledge Comes Only From Experience

Retired2013
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Re: What defines "income" on a retiree's credit card application?

Post by Retired2013 » Tue Apr 16, 2019 7:42 am

MikeG62 wrote:
Tue Apr 16, 2019 7:16 am
Leesbro63 wrote:
Tue Apr 16, 2019 1:48 am
123 wrote:
Mon Apr 15, 2019 9:19 am
They often ask for income not taxable income. If you have investments there are typically capital gains (whether they are realized or not). Taxable income, from a tax return, may not be an indicator at all when you consider the exemption of muni bond interest etc.
Agreed with all but unrealized capital gains. I don’t think that “income” in any way, shape or form. Why not include home appreciation then? Unrealized cap gains may just be a temporary bump up in the value of your asset. Could be here today, gone tomorrow. Tax free muni bond interest is income. Non-taxable social security is income. RMDs and even withdrawals from Roth IRAs could be considered income. But not unrealized capital gains I don’t believe.
I find it interesting that RMD’s from an IRA seems to be universally acceptable by most commenters above as income a CC company would value when in fact it is simply a movement of assets from one pocket to another (and in fact reduces ones net worth by the amount of taxes paid). Sure it is income to the IRS (and most states), but does it really make one who is receiving an RMD a better credit risk than the person who is a few years younger and yet to begin taking their RMD’s?
If all of your investments are in Roth accounts, you could have a $10m portfolio with $500,000 gain each year, non-taxable. No income? Living in poverty?

Because I select to keep my income low for ACA, $23k MAGI, my portfolio is growing by 6 figure (in good years). Per my tax return, I look like I live in poverty.

I report the $23k to match the tax return and then report "other income" using my last 10 yr average.

Broken Man 1999
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Re: What defines "income" on a retiree's credit card application?

Post by Broken Man 1999 » Tue Apr 16, 2019 9:35 am

bltn wrote:
Tue Apr 16, 2019 12:22 am
Why not just get a debit card? For someone who pays their card balance every month, a debit card would be fine.
Well, to start with, debit cards pull the funds out immediately, I think. You pay as you use them, funds are withdrawn from your account. I don't like debit cards, so I always get a card that works for ATMs only.

There are lots of reasons some prefer using credit card, as some give nice rewards. And, personally I hate having to do mental gymnastics over keeping a balance in my credit union to ensure all needed debits are funded. Most of my spending is on credit cards. Using a credit card allows me to have large balances in my checking account for only a few days, keeping my investments working for me.

And, I modified your last sentence to read: For someone who pays their card balance every month, a debit credit card would be fine.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

Leesbro63
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Re: What defines "income" on a retiree's credit card application?

Post by Leesbro63 » Tue Apr 16, 2019 9:58 am

MikeG62 wrote:
Tue Apr 16, 2019 7:16 am
Leesbro63 wrote:
Tue Apr 16, 2019 1:48 am
123 wrote:
Mon Apr 15, 2019 9:19 am
They often ask for income not taxable income. If you have investments there are typically capital gains (whether they are realized or not). Taxable income, from a tax return, may not be an indicator at all when you consider the exemption of muni bond interest etc.
Agreed with all but unrealized capital gains. I don’t think that “income” in any way, shape or form. Why not include home appreciation then? Unrealized cap gains may just be a temporary bump up in the value of your asset. Could be here today, gone tomorrow. Tax free muni bond interest is income. Non-taxable social security is income. RMDs and even withdrawals from Roth IRAs could be considered income. But not unrealized capital gains I don’t believe.
I find it interesting that RMD’s from an IRA seems to be universally acceptable by most commenters above as income a CC company would value when in fact it is simply a movement of assets from one pocket to another (and in fact reduces ones net worth by the amount of taxes paid). Sure it is income to the IRS (and most states), but does it really make one who is receiving an RMD a better credit risk than the person who is a few years younger and yet to begin taking their RMD’s?
Technically you are right. But unlike other investments, RMDs require the taxpayer to actually liquify a portion of their nest egg each year. And yeah, you might take convert an entire IRA to a Roth (or just to a taxable account) in one year and have no "income" the next. But I guess from a lender's point of view, a stream of income from a senior citizen's nest egg is probably at least as reliable as employment income for younger people, who can be employed today and unemployed tomorrow. But circling back to my original comment about unrealized capital gains, I don't think that they are really income. And while an IRA can fluctuate just as a taxable account, that forced liquification of a small amount each year (RMD) seems more like "income" than the fact that my Apple stock went up 20% this year but I didn't sell any of it to "lock that in".

DetroitRick
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Re: What defines "income" on a retiree's credit card application?

Post by DetroitRick » Tue Apr 16, 2019 10:43 am

In the recent past, I've played this 2 different ways in retirement. First case, I applied a strict accounting/tax definition of income and got a card with the lowest limit I've ever had in my entire life. Second case, used a broad definition of income and got a card with a completely normal credit limit. All with the same stellar credit history and extremely high credit score(s). Both from applications were from the SAME issuer, and that issuer was also my bank. These applications were made 1.5 years apart.

Seriously, there is no need to turn this into a moral dilemma or to go all accounting theorist. As whodidntante points out, this is vague on purpose. If card companies wanted to be specific, they could be. As beyou points out, the law itself (Card Act and amendment) is very broad. This could be succinctly defined, but it isn't. That makes it their problem (card companies), not mine.

I now apply only 3 principals in the application or request for additional credit: 1)conform to any specifics on the application, 2)put down numbers that I can substantiate in the highly unlikely event I'm asked and 3)interpret ambiguity in my favor.

michaeljc70
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Re: What defines "income" on a retiree's credit card application?

Post by michaeljc70 » Tue Apr 16, 2019 10:48 am

Thinking to back when I was in college, I was able to get credit cards. I had a low paying part-time job. My guess is they will approve you for most cards (maybe with a lower credit limit) if you have good credit and state minimal income.

TravelGeek
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Re: What defines "income" on a retiree's credit card application?

Post by TravelGeek » Tue Apr 16, 2019 11:12 am

bltn wrote:
Tue Apr 16, 2019 12:22 am
Why not just get a debit card? For someone who pays their card balance every month, a debit card would be fine.
Three reasons for me:

1. you presumably pay at least 2% more than someone who uses an award credit card (and pays off the balance every month).

2. The money comes straight out of your checking account, including fraudulent transactions.

3. As far as I know, debit cards have fewer card holder rights/protections/benefits than credit cards.

I use my debit card only at ATMs to get cash. And rarely.

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munemaker
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Re: What defines "income" on a retiree's credit card application?

Post by munemaker » Tue Apr 16, 2019 11:17 am

bltn wrote:
Tue Apr 16, 2019 12:22 am
Why not just get a debit card? For someone who pays their card balance every month, a debit card would be fine.
Poor fraud protection. I keep mine (Capital One 360) "locked" in their app and only unlock it to use the ATM. I also leave it physically locked up at home except when using it for ATM.

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munemaker
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Re: What defines "income" on a retiree's credit card application?

Post by munemaker » Tue Apr 16, 2019 11:59 am

Leesbro63 wrote:
Tue Apr 16, 2019 9:58 am
MikeG62 wrote:
Tue Apr 16, 2019 7:16 am
Leesbro63 wrote:
Tue Apr 16, 2019 1:48 am
123 wrote:
Mon Apr 15, 2019 9:19 am
They often ask for income not taxable income. If you have investments there are typically capital gains (whether they are realized or not). Taxable income, from a tax return, may not be an indicator at all when you consider the exemption of muni bond interest etc.
Agreed with all but unrealized capital gains. I don’t think that “income” in any way, shape or form. Why not include home appreciation then? Unrealized cap gains may just be a temporary bump up in the value of your asset. Could be here today, gone tomorrow. Tax free muni bond interest is income. Non-taxable social security is income. RMDs and even withdrawals from Roth IRAs could be considered income. But not unrealized capital gains I don’t believe.
I find it interesting that RMD’s from an IRA seems to be universally acceptable by most commenters above as income a CC company would value when in fact it is simply a movement of assets from one pocket to another (and in fact reduces ones net worth by the amount of taxes paid). Sure it is income to the IRS (and most states), but does it really make one who is receiving an RMD a better credit risk than the person who is a few years younger and yet to begin taking their RMD’s?
Technically you are right. But unlike other investments, RMDs require the taxpayer to actually liquify a portion of their nest egg each year. And yeah, you might take convert an entire IRA to a Roth (or just to a taxable account) in one year and have no "income" the next. But I guess from a lender's point of view, a stream of income from a senior citizen's nest egg is probably at least as reliable as employment income for younger people, who can be employed today and unemployed tomorrow. But circling back to my original comment about unrealized capital gains, I don't think that they are really income. And while an IRA can fluctuate just as a taxable account, that forced liquification of a small amount each year (RMD) seems more like "income" than the fact that my Apple stock went up 20% this year but I didn't sell any of it to "lock that in".
If you are going to count RMDs, then you may as well include Roth conversions too. Similar in that they are just moving money from one pocket to another.

Chicago60
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Re: What defines "income" on a retiree's credit card application?

Post by Chicago60 » Tue Apr 16, 2019 12:02 pm

DrGoogle2017 wrote:
Mon Apr 15, 2019 7:23 pm
Chicago60 wrote:
Mon Apr 15, 2019 6:03 pm
Lafder wrote:
Mon Apr 15, 2019 9:17 am
I usually just put 100,000$ Or maybe sometimes I put 200,000.

I figure my real income is none of their business and I am giving an underestimation.

What about using your expenses? Your income exceeds that. Or the amount you deposit into your bank account each year?

As long as you are not being fraudulent, does it matter? If you are inflating your income to obtain debt you are going to default on it is entirely different than a card you are responsible with.

I think using your last employment income sounds ok too.

I am curious what others say.

lafder
Since you asked....if you "put 100,000" or "put 200,000" and that is not accurate, it sure seems like you are committing fraud to me.
Fraud for what? The whole reason they ask for income is to see your ability to pay, it may help them determine your credit line. When I hear fraud, I think of Wells Fargo. A big bank, defrauding customers on purpose. Not a single high level executive is in jail.
If the person above had income of $50,000 per year, but in applying for credit with a new credit card, listed income at $100K or $200K then the applicant has defrauded the financial institution by overstating their income in order to get the bank to extend credit.

Chicago60
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Re: What defines "income" on a retiree's credit card application?

Post by Chicago60 » Tue Apr 16, 2019 12:07 pm

munemaker wrote:
Mon Apr 15, 2019 6:45 pm
Chicago60 wrote:
Mon Apr 15, 2019 6:26 pm
It seems to me that what you report on your 1040 is a defensible answer to the question, no matter the sources of "income."
Including Roth conversions (which are part of AGI)?
In what way is that not income?

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Re: What defines "income" on a retiree's credit card application?

Post by munemaker » Tue Apr 16, 2019 12:18 pm

Chicago60 wrote:
Tue Apr 16, 2019 12:07 pm
munemaker wrote:
Mon Apr 15, 2019 6:45 pm
Chicago60 wrote:
Mon Apr 15, 2019 6:26 pm
It seems to me that what you report on your 1040 is a defensible answer to the question, no matter the sources of "income."
Including Roth conversions (which are part of AGI)?
In what way is that not income?
The IRS definitely considers Roth conversions as income. The reason I questioned it is, Roth conversions really are not income in the sense that you did not receive any additional money. Roth conversions just move money from one account to another. They do not increase your ability to pay, which is presumably what the lender would be interested in.

Someone above suggested not including it as income on the credit card application.

After thinking about it, I do believe it (along with RMDs) should be included as income on a credit card application, and you have your tax return as evidence if you are challenged.

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Re: What defines "income" on a retiree's credit card application?

Post by beyou » Tue Apr 16, 2019 12:30 pm

michaeljc70 wrote:
Mon Apr 15, 2019 11:30 pm
beyou wrote:
Mon Apr 15, 2019 10:38 pm
michaeljc70

I said " possible source of justification of income stated, but not the only one." in relation to the IRS.
So what part of "not the only one" was unclear ?
You said "I wish the IRS agreed with you, but they call it income when filing your tax returns."

I really am unclear as to what the IRS disagrees with me on.
Anything you report to IRS as income can be counted as income (you said RMD were not, I disagree and so would the IRS).
Many things you don't have to report to IRS (or at pay tax) can be income too (muni interest).
The fact you could take MORE than the RMD is a judgement call. Do you really plan to liquidate all your 401k/tax deferred at once,
then yes IRS would call that income. You can even report that to a credit card issuer, but next year you better update your income with the credit card issuer when your income is reduced (IRS would see income reduced, so should the bank). We all love to report increase in income, not decrease, but that would be misrepresenting yourself if you didn't adjust your income up and down, just like you do with the IRS.

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Re: What defines "income" on a retiree's credit card application?

Post by michaeljc70 » Tue Apr 16, 2019 1:22 pm

beyou wrote:
Tue Apr 16, 2019 12:30 pm
michaeljc70 wrote:
Mon Apr 15, 2019 11:30 pm
beyou wrote:
Mon Apr 15, 2019 10:38 pm
michaeljc70

I said " possible source of justification of income stated, but not the only one." in relation to the IRS.
So what part of "not the only one" was unclear ?
You said "I wish the IRS agreed with you, but they call it income when filing your tax returns."

I really am unclear as to what the IRS disagrees with me on.
Anything you report to IRS as income can be counted as income (you said RMD were not, I disagree and so would the IRS).
You must see posts that I don't. You said you would use your SWR which is not the same as an RMD. You seem to just want to argue quoting things you said I didn't even respond to.

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Re: What defines "income" on a retiree's credit card application?

Post by michaeljc70 » Tue Apr 16, 2019 1:25 pm

adamthesmythe wrote:
Tue Apr 16, 2019 1:08 pm
BOGLEHEAD ACCUSED OF BANK FRAUD

(name) was indicted for bank fraud. The indictment alleged that he reported an income of $100,000 on a credit card application, when in fact his income was $101,875. He also neglected to include interest income of $45. Even worse, he reported dividend income of approximately $1000, when in fact his dividend income was actually $988.

At trial the judge said "de minimis non curat lex". No one present knew what that meant, including the AG, as it seemed to be in a furrin' language.
There is someone above that said sometimes they put $200k and sometimes they put $100k so let's not conflate a rounding error or small discrepancy with a $100k difference. The same person said "I figure my real income is none of their business and I am giving an underestimation." Well, if you want credit from them it is their business.

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Re: What defines "income" on a retiree's credit card application?

Post by Barsoom » Tue Apr 16, 2019 1:40 pm

Isn't your retirement "income" basically whatever you want it to be?

The W-2 asks for "wages, tips, other compensation." You are no longer being compensated; you are withdrawing accumulated life savings.

Instead of showing a tax return, wouldn't showing a bank statement with monthly transfers from a Fidelity or Vanguard account into your checking account be the same thing as if a paycheck were direct deposited? In that case, the cash in is whatever you want it to be, and that would be the information to put on a CC application.

Yes? No?

-B

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Re: What defines "income" on a retiree's credit card application?

Post by OnTrack » Tue Apr 16, 2019 1:44 pm

beyou wrote:
Tue Apr 16, 2019 12:30 pm
...
The fact you could take MORE than the RMD is a judgement call. Do you really plan to liquidate all your 401k/tax deferred at once,
then yes IRS would call that income. You can even report that to a credit card issuer, but next year you better update your income with the credit card issuer when your income is reduced (IRS would see income reduced, so should the bank). We all love to report increase in income, not decrease, but that would be misrepresenting yourself if you didn't adjust your income up and down, just like you do with the IRS.
I was unaware that there is any requirement to update income with the credit card issuer after the credit card has already been issued? :confused So if a person is laid off or retires then he or she must update their income? Would this be true of car loans or mortgages also?

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Re: What defines "income" on a retiree's credit card application?

Post by DrGoogle2017 » Tue Apr 16, 2019 1:50 pm

Chicago60 wrote:
Tue Apr 16, 2019 12:02 pm
DrGoogle2017 wrote:
Mon Apr 15, 2019 7:23 pm
Chicago60 wrote:
Mon Apr 15, 2019 6:03 pm
Lafder wrote:
Mon Apr 15, 2019 9:17 am
I usually just put 100,000$ Or maybe sometimes I put 200,000.

I figure my real income is none of their business and I am giving an underestimation.

What about using your expenses? Your income exceeds that. Or the amount you deposit into your bank account each year?

As long as you are not being fraudulent, does it matter? If you are inflating your income to obtain debt you are going to default on it is entirely different than a card you are responsible with.

I think using your last employment income sounds ok too.

I am curious what others say.

lafder
Since you asked....if you "put 100,000" or "put 200,000" and that is not accurate, it sure seems like you are committing fraud to me.
Fraud for what? The whole reason they ask for income is to see your ability to pay, it may help them determine your credit line. When I hear fraud, I think of Wells Fargo. A big bank, defrauding customers on purpose. Not a single high level executive is in jail.
If the person above had income of $50,000 per year, but in applying for credit with a new credit card, listed income at $100K or $200K then the applicant has defrauded the financial institution by overstating their income in order to get the bank to extend credit.
Yes, that’s obvious. But the fact that one puts all 000 or round number is not necessarily fraud as your post implied. It’s sheer laziness which I’m quite guilty off many times. Plus I don’t have my income down to the pennies anywhere. Like I wrote earlier, tax return is not accurate.
Last edited by DrGoogle2017 on Tue Apr 16, 2019 5:10 pm, edited 1 time in total.

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Re: What defines "income" on a retiree's credit card application?

Post by DrGoogle2017 » Tue Apr 16, 2019 1:55 pm

michaeljc70 wrote:
Tue Apr 16, 2019 1:25 pm
adamthesmythe wrote:
Tue Apr 16, 2019 1:08 pm
BOGLEHEAD ACCUSED OF BANK FRAUD

(name) was indicted for bank fraud. The indictment alleged that he reported an income of $100,000 on a credit card application, when in fact his income was $101,875. He also neglected to include interest income of $45. Even worse, he reported dividend income of approximately $1000, when in fact his dividend income was actually $988.

At trial the judge said "de minimis non curat lex". No one present knew what that meant, including the AG, as it seemed to be in a furrin' language.
There is someone above that said sometimes they put $200k and sometimes they put $100k so let's not conflate a rounding error or small discrepancy with a $100k difference. The same person said "I figure my real income is none of their business and I am giving an underestimation." Well, if you want credit from them it is their business.
I didn’t read as such, I read that he puts numbers that are not real, like who has income end with even number like 000, it’s always some odd numbers, that’s why he gets rejected. I think you read something more than I read. If that’s actually is the case that he makes $100k and report $200k then it’s fraud. I’m reading he puts $100,000 or $200,000, instead of $101,511.02 or $202,005.02. So he puts the ballpark or estimate.

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Re: What defines "income" on a retiree's credit card application?

Post by DetroitRick » Tue Apr 16, 2019 3:34 pm

adamthesmythe wrote:
Tue Apr 16, 2019 1:08 pm
BOGLEHEAD ACCUSED OF BANK FRAUD

(name) was indicted for bank fraud. The indictment alleged that he reported an income of $100,000 on a credit card application, when in fact his income was $101,875. He also neglected to include interest income of $45. Even worse, he reported dividend income of approximately $1000, when in fact his dividend income was actually $988.

At trial the judge said "de minimis non curat lex". No one present knew what that meant, including the AG, as it seemed to be in a furrin' language.
This is my favorite post of 2019. Hilarious. Someday I hope to post this on my cell wall. :beer

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Re: What defines "income" on a retiree's credit card application?

Post by Flobes » Tue Apr 16, 2019 3:39 pm

munemaker wrote:
Mon Apr 15, 2019 9:09 am
... I do not want to fraudulently misrepresent my situation on a CC application....What do others do who are living off of their investments?
JoeChick10 wrote:
Mon Apr 15, 2019 9:35 pm
Why don’t you just call the credit card company and ask them?
Trader Joe wrote:
Mon Apr 15, 2019 6:16 pm
Also, why would you ever need to apply for a credit card in retirement? I have never heard of this.
I'm in retirement.

Last year, I wanted the then-new Alliant 3% cash-back credit card.

Their application required income verification.

I called. (I was an Alliant customer, with some CDs there.)

I told CSR that my investment portfolio is more than a million bucks,
but I keep my "income" low for other keen financial planning strategies.

He replied, saying we review income and not assets.

And so I explained that my "income" could be whatever I wanted, whenever needed it.

He asked what that really meant.

I replied: if on a whim I want to take a trip around the world, for $100k,
and charge it to the card, my $100k is there, no problem, no fuss.

He said he'd talked to his supervisor.

By day's end, I was approved for the card.

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Re: What defines "income" on a retiree's credit card application?

Post by TravelGeek » Tue Apr 16, 2019 3:48 pm

Flobes wrote:
Tue Apr 16, 2019 3:39 pm

I replied: if on a whim I want to take a trip around the world, for $100k,
and charge it to the card, my $100k is there, no problem, no fuss.

He said he'd talked to his supervisor.

By day's end, I was approved for the card.
With a $100k credit limit? :D

Also, did you take the trip yet?

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Re: What defines "income" on a retiree's credit card application?

Post by munemaker » Tue Apr 16, 2019 3:57 pm

Trader Joe wrote:
Mon Apr 15, 2019 6:14 pm
Ask the credit card issuer how they define income.
JoeChick10 wrote:
Mon Apr 15, 2019 9:35 pm
Why don’t you just call the credit card company and ask them?
I doubt if the front line customer service people could speak knowledgeably on the subject. Just look at Flobes post as an example. Anyway, I wanted to hear what others do. There does seem to be a lot of interest and wide differences of opinion on the subject.
Last edited by munemaker on Tue Apr 16, 2019 4:08 pm, edited 1 time in total.

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Re: What defines "income" on a retiree's credit card application?

Post by munemaker » Tue Apr 16, 2019 4:03 pm

Trader Joe wrote:
Mon Apr 15, 2019 6:16 pm

...why would you ever need to apply for a credit card in retirement? I have never heard of this.
A retiree applying for a credit card is about as common as anyone else applying for a credit card. What's the premise for your question? Do you think people in retirement should only pay cash, or are so set in their ways they won't consider new and improved services (i.e. a credit card with better features than the ones currently used)? Trying to understand where you are coming from?

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Re: What defines "income" on a retiree's credit card application?

Post by drawpoker » Tue Apr 16, 2019 5:07 pm

In taking out quite a few zero % intro new offers (cards) since becoming retired I have noted 2 things:
They don't just ask for an annual figure for income - they also ask you check off a box describing the source.
I always check the box labeled "investments". That should tell them all they need to know.

#2, I don't recall any of them asking me to name a requested credit limit. If they did, I would just leave that blank. Like salary negotiations, you don't want to name a figure too low. Or too high, either. They will pick an amount based on income and FICO score. Requesting a certain dollar amount is probably just asking for trouble (further inquiry)

If any of them ever asked me to produce documentation, or tax returns, before approving me, would cheerfully tell them

"Kiss My Grits" :P :P

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Re: What defines "income" on a retiree's credit card application?

Post by LadyGeek » Tue Apr 16, 2019 7:00 pm

Several off-topic posts regarding hypothetical situations were removed. Please stay on-topic and focus on helping the OP.
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Re: What defines "income" on a retiree's credit card application?

Post by beyou » Tue Apr 16, 2019 8:49 pm

OnTrack wrote:
Tue Apr 16, 2019 1:44 pm
beyou wrote:
Tue Apr 16, 2019 12:30 pm
...
The fact you could take MORE than the RMD is a judgement call. Do you really plan to liquidate all your 401k/tax deferred at once,
then yes IRS would call that income. You can even report that to a credit card issuer, but next year you better update your income with the credit card issuer when your income is reduced (IRS would see income reduced, so should the bank). We all love to report increase in income, not decrease, but that would be misrepresenting yourself if you didn't adjust your income up and down, just like you do with the IRS.
I was unaware that there is any requirement to update income with the credit card issuer after the credit card has already been issued? :confused So if a person is laid off or retires then he or she must update their income? Would this be true of car loans or mortgages also?
A fixed term loan is issued for a specific period
of time, paid off and done. Credit cards are “revolving credit” and as such they can change the amount of credit, the rate charged and close the account anytime. The issuer will check your credit regularly, and ask you for income updates. If your credit declines they can close the account. When they solicit income, most seem to make it optional, and expect you may report an increase to get more credit. I expect most would not report a decrease, but in theory yes they want to know, and could act on decreased income. Only due to intense competition do they ease off on such a requirement, which works since most people seek increases, and because your credit rating is more verifiable. I would not report zero if unemployed, any BH would have that emergency fund ready to pay bills :-).

The main thing they do not want reported as incone is a loan you obtain. Most other sources of funds are acceptable.

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Re: What defines "income" on a retiree's credit card application?

Post by retiredflyboy » Tue Apr 16, 2019 9:52 pm

Pension+interest+dividends+farm land rental. I use latest quarterly dividend and months interest.
Facts are stubborn things. Everything works until it doesn’t.

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Re: What defines "income" on a retiree's credit card application?

Post by Chicago60 » Tue Apr 16, 2019 10:18 pm

munemaker wrote:
Tue Apr 16, 2019 12:18 pm
Chicago60 wrote:
Tue Apr 16, 2019 12:07 pm
munemaker wrote:
Mon Apr 15, 2019 6:45 pm
Chicago60 wrote:
Mon Apr 15, 2019 6:26 pm
It seems to me that what you report on your 1040 is a defensible answer to the question, no matter the sources of "income."
Including Roth conversions (which are part of AGI)?
In what way is that not income?
The IRS definitely considers Roth conversions as income. The reason I questioned it is, Roth conversions really are not income in the sense that you did not receive any additional money. Roth conversions just move money from one account to another. They do not increase your ability to pay, which is presumably what the lender would be interested in.

Someone above suggested not including it as income on the credit card application.

After thinking about it, I do believe it (along with RMDs) should be included as income on a credit card application, and you have your tax return as evidence if you are challenged.
As far as the bank issuing the credit card is concerned, I think a Roth conversion is new money because the application does not ask for assets so there is no disclosure of tIRA or Roth IRA balances. As you noted, the IRS clearly treats a conversion as income, and I think a credit card applicant should too.

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Re: What defines "income" on a retiree's credit card application?

Post by JackoC » Wed Apr 17, 2019 9:04 am

Chicago60 wrote:
Mon Apr 15, 2019 6:03 pm
Lafder wrote:
Mon Apr 15, 2019 9:17 am
I usually just put 100,000$ Or maybe sometimes I put 200,000.

I figure my real income is none of their business and I am giving an underestimation.

I am curious what others say.

lafder
Since you asked....if you "put 100,000" or "put 200,000" and that is not accurate, it sure seems like you are committing fraud to me.
Fair enough, he or she did ask. But I'd just put in my 2 cents that I completely disagree. The typical definition of fraud, as for example here
"Somebody misrepresents a material fact in order to obtain action or forbearance by another person;
The other person relies upon the misrepresentation; and
The other person suffers injury as a result of the act or forbearance taken in reliance upon the misrepresentation."
https://en.wikipedia.org/wiki/Fraud#United_States

Using common sense to further define terms, if 'I am giving an underestimation' that does not make it more likely I 'obtain the action' of a financial institution extending me credit, nor is the lending institution 'suffering injury' to consider an application based on lower income or assets than is actually the case. Not fraud.

I have also sometimes put $100k income (understatement) on minor credit applications, though sometimes because a bigger credit card line would be useful I put the latest 1040 gross. I don't bother to add in muni income, and stuff like unrealized cap gains or distributions inside tax deferred accounts might actually get a little shaky IMO (for one thing I'd have to say my income was negative some years if I consistently included the year's change in unrealized gain) though still wouldn't be 'fraud'. Likewise I do not disclose my real total assets to anybody except if it were to be legally subpoena'd. I make sure all personal debt (which is generally zero anyway) is disclosed on applications for non-recourse loans in my LLC (they still ask about financials of an LLC member in that case) but not all my assets. There's no harm to them from going with a partial number, but there's downside to me from potential unscrupulous people working at the institution if I disclose everything.
Last edited by JackoC on Wed Apr 17, 2019 1:09 pm, edited 1 time in total.

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Re: What defines "income" on a retiree's credit card application?

Post by SQRT » Wed Apr 17, 2019 9:48 am

I recently applied on line for a limit increase on one of my cards. Put in my income as pension and divs. Got a call from the CC issuer to confirm the figures. They accepted my statements over the phone and increased the limit. No discussion of my net worth, RMD’s, cap gains, or SWR’s.

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Re: What defines "income" on a retiree's credit card application?

Post by Chicago60 » Wed Apr 17, 2019 3:13 pm

JackoC wrote:
Wed Apr 17, 2019 9:04 am
Chicago60 wrote:
Mon Apr 15, 2019 6:03 pm
Lafder wrote:
Mon Apr 15, 2019 9:17 am
I usually just put 100,000$ Or maybe sometimes I put 200,000.

I figure my real income is none of their business and I am giving an underestimation.

I am curious what others say.

lafder
Since you asked....if you "put 100,000" or "put 200,000" and that is not accurate, it sure seems like you are committing fraud to me.
Fair enough, he or she did ask. But I'd just put in my 2 cents that I completely disagree. The typical definition of fraud, as for example here
"Somebody misrepresents a material fact in order to obtain action or forbearance by another person;
The other person relies upon the misrepresentation; and
The other person suffers injury as a result of the act or forbearance taken in reliance upon the misrepresentation."
https://en.wikipedia.org/wiki/Fraud#United_States

Using common sense to further define terms, if 'I am giving an underestimation' that does not make it more likely I 'obtain the action' of a financial institution extending me credit, nor is the lending institution 'suffering injury' to consider an application based on lower income or assets than is actually the case. Not fraud.

I have also sometimes put $100k income (understatement) on minor credit applications, though sometimes because a bigger credit card line would be useful I put the latest 1040 gross. I don't bother to add in muni income, and stuff like unrealized cap gains or distributions inside tax deferred accounts might actually get a little shaky IMO (for one thing I'd have to say my income was negative some years if I consistently included the year's change in unrealized gain) though still wouldn't be 'fraud'. Likewise I do not disclose my real total assets to anybody except if it were to be legally subpoena'd. I make sure all personal debt (which is generally zero anyway) is disclosed on applications for non-recourse loans in my LLC (they still ask about financials of an LLC member in that case) but not all my assets. There's no harm to them from going with a partial number, but there's downside to me from potential unscrupulous people working at the institution if I disclose everything.
The key to the definition you quoted is "material", and I think we are saying the same thing, though our interpretation of what I quoted above may be different.

I took the "put 100,000" or "put 200,000" on the application as suggesting that the poster was not only being untruthful, but materially exaggerating their income. I took the language to mean that he picked a number at random to inflate his income in order to get the credit card. If his actual income was, for example, $105,000 but he "put $100,000" then that would not be fraudulent, in my opinion.

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Re: What defines "income" on a retiree's credit card application?

Post by student » Wed Apr 17, 2019 3:21 pm

Chicago60 wrote:
Wed Apr 17, 2019 3:13 pm
JackoC wrote:
Wed Apr 17, 2019 9:04 am
Chicago60 wrote:
Mon Apr 15, 2019 6:03 pm
Lafder wrote:
Mon Apr 15, 2019 9:17 am
I usually just put 100,000$ Or maybe sometimes I put 200,000.

I figure my real income is none of their business and I am giving an underestimation.

I am curious what others say.

lafder
Since you asked....if you "put 100,000" or "put 200,000" and that is not accurate, it sure seems like you are committing fraud to me.
Fair enough, he or she did ask. But I'd just put in my 2 cents that I completely disagree. The typical definition of fraud, as for example here
"Somebody misrepresents a material fact in order to obtain action or forbearance by another person;
The other person relies upon the misrepresentation; and
The other person suffers injury as a result of the act or forbearance taken in reliance upon the misrepresentation."
https://en.wikipedia.org/wiki/Fraud#United_States

Using common sense to further define terms, if 'I am giving an underestimation' that does not make it more likely I 'obtain the action' of a financial institution extending me credit, nor is the lending institution 'suffering injury' to consider an application based on lower income or assets than is actually the case. Not fraud.

I have also sometimes put $100k income (understatement) on minor credit applications, though sometimes because a bigger credit card line would be useful I put the latest 1040 gross. I don't bother to add in muni income, and stuff like unrealized cap gains or distributions inside tax deferred accounts might actually get a little shaky IMO (for one thing I'd have to say my income was negative some years if I consistently included the year's change in unrealized gain) though still wouldn't be 'fraud'. Likewise I do not disclose my real total assets to anybody except if it were to be legally subpoena'd. I make sure all personal debt (which is generally zero anyway) is disclosed on applications for non-recourse loans in my LLC (they still ask about financials of an LLC member in that case) but not all my assets. There's no harm to them from going with a partial number, but there's downside to me from potential unscrupulous people working at the institution if I disclose everything.
The key to the definition you quoted is "material", and I think we are saying the same thing, though our interpretation of what I quoted above may be different.

I took the "put 100,000" or "put 200,000" on the application as suggesting that the poster was not only being untruthful, but materially exaggerating their income. I took the language to mean that he picked a number at random to inflate his income in order to get the credit card. If his actual income was, for example, $105,000 but he "put $100,000" then that would not be fraudulent, in my opinion.
Didn't the poster say "I am giving an underestimation" in his comment. The phrase is in the quote above. "I usually just put 100,000$ Or maybe sometimes I put 200,000. I figure my real income is none of their business and I am giving an underestimation."

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Re: What defines "income" on a retiree's credit card application?

Post by JackoC » Wed Apr 17, 2019 5:00 pm

Chicago60 wrote:
Wed Apr 17, 2019 3:13 pm
JackoC wrote:
Wed Apr 17, 2019 9:04 am
Chicago60 wrote:
Mon Apr 15, 2019 6:03 pm
Lafder wrote:
Mon Apr 15, 2019 9:17 am
I usually just put 100,000$ Or maybe sometimes I put 200,000.
I figure my real income is none of their business and I am giving an underestimation.
I am curious what others say.
Since you asked....if you "put 100,000" or "put 200,000" and that is not accurate, it sure seems like you are committing fraud to me.
Fair enough, he or she did ask. But I'd just put in my 2 cents that I completely disagree. The typical definition of fraud, as for example here
"Somebody misrepresents a material fact in order to obtain action or forbearance by another person;
The other person relies upon the misrepresentation; and
The other person suffers injury as a result of the act or forbearance taken in reliance upon the misrepresentation."
https://en.wikipedia.org/wiki/Fraud#United_States

Using common sense to further define terms, if 'I am giving an underestimation' that does not make it more likely I 'obtain the action' of a financial institution extending me credit, nor is the lending institution 'suffering injury' to consider an application based on lower income or assets than is actually the case. Not fraud.
The key to the definition you quoted is "material", and I think we are saying the same thing, though our interpretation of what I quoted above may be different.

I took the "put 100,000" or "put 200,000" on the application as suggesting that the poster was not only being untruthful, but materially exaggerating their income. I took the language to mean that he picked a number at random to inflate his income in order to get the credit card. If his actual income was, for example, $105,000 but he "put $100,000" then that would not be fraudulent, in my opinion.
The post you originally replied to specifically said "I am giving an underestimation". IOW 100 and 200 were both underestimations OP seemed to be saying. *That* was the key to my response.

For an incorrect statement to be fraudulent it has to be to the advantage of the party presenting it and at the expense of the party to whom it's presented. That's not true when somebody gives a deliberately too low income number on a credit application. That is not fraud even if it's a material difference, putting your income as $100k on a credit card application when it's really $327.4k is not fraud. That was my point.

If it was the other way around, the person's income provably and certainly $121k and they said $125k for no reason but to get the card or a bigger line, then there could be argument if that was material. Likewise if the person added in *unrealized* capital gains in a given year or interest/divs in an IRA one could argue they were inflating things a bit compared to the categories the card company probably expected to see, but still very unlikely to be found 'fraud' in the real world if the application just asked for 'income' and didn't define it.

All in all I think perhaps the 'f' word might be broken out a bit too readily on this forum sometimes. :happy

drawpoker
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Re: What defines "income" on a retiree's credit card application?

Post by drawpoker » Wed Apr 17, 2019 8:02 pm

All in all I think perhaps people on this forum are a bit too-readily often over-thinking things. Like here, and it is becoming a little silly.

Can anyone cite a case where a credit card issuer, when faced with a defaulting customer, expended time, energy, and money (legal fees) to investigate if a retired, sr. citizen falsely inflated their annual income on the application? Why would they go to the bother? If it is a default, they are going to pursue what they always do - when all collection efforts fail, they file for a judgement.

Pursuing criminal penalties in an effort to prosecute so-and-so for lying about their income is not going to reap them one extra penny in recovery; going after delinquents thru civil suits is the only way they can possibly get back (some of) their money.

Or, can anyone cite a case where a credit card issuer sends out an invitation to that select group they culled thru for their 800-plus FICO scores, and, upon receiving the completed application, starts a petty argument with that potential, Grade A, top-shelf, customer, over a few measly thousand?

Gimmee a break......

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