BACK

Fine Print

Why is my credit card company asking about my income?

Summary

Telling your income is mandatory on a card application, but voluntary once you have been approved. However, card issuers need income information to offer you a credit limit increase under Credit CARD Act rules.

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Why does my credit card account in good standing ask about my income?

Card issuers need income information to offer an increase in your credit limit, under the Credit CARD Act’s “ability to pay” rule.

You can choose to skip questions by your card issuer about your income, but that may affect offers to increase your credit line.

Expert Q&A

Check out all the answers from our credit card experts.

Voluntary question helps you qualify for higher credit limit

Under rules implemented by the Credit CARD Act, banks must consider your ability to pay your debt before issuing the card, and before granting an increase in your credit limit.

  • Under the rule, the card must consider at least one of the following metrics:
  • The ratio of debt obligations to income, debt to assets or “the income the consumer will have after paying debt obligations.”

The rule says cards are allowed to rely on the income data that you provide.

See related: Credit card issuers vary wildly on how they verify income

What issuers can see to verify your income

Card issuers do review your credit report, but credit reports do not have data about your income, and may not even list your employer.

That is not the end of the story, however.

Although card issuers rarely confirm income, “they can impute validity in ranges, such as using trend data to assure that income is in line with expectations,” said Brian Riley, director of credit advisory service at Mercator Advisory Group.

For example, “a high school teacher’s income at $150,000 might be questioned, though a college professor in that amount would be acceptable.”

The regulations mean telling your income is mandatory on a card application, but voluntary after you have been approved and opened the account.

Of course, if you decide to skip the income question, the card issuer may not offer to increase your credit limit.

Inflating income can backfire down the road

If you do answer the income question, there are good reasons to be accurate, even though the figure isn’t likely to be checked.

“Income is self-reported so the data are certainly vulnerable to overzealous consumer interpretation,” Riley said. But if your account is ever subject to collection action, or if you file bankruptcy, “issuers have a notation on file with a claim for cardholder income.”

  • In these situations, any inflated income claims that you made will harm your chances of erasing the debt, or a portion of it.
  • In the same way, the exaggerated income claim will work against you if you ever try to negotiate a settlement of the debt, or a workout arrangement.

Different ways to think about income

What measure of income should you use? Card issuers avoid using specific definitions of income in their questions to avoid confusion.

And their instructions vary widely.

  • Chase card applications ask for “total gross annual income” and whether any of it is non-taxable.
  • Citi applications ask for total annual income, and the amount of your monthly rent or mortgage payment.

Card users may wonder whether to give last year’s income per tax filings, or an estimate of this year’s income – or whether to include one-time income sources such as a bonus that’s unlikely to recur.

You can ask the card issuer for guidance – or just be conservative and consistent in stating your annual income.

What’s up next?

In Fine Print

5 great fall destinations, and how to fly there nearly for free

You can find cheap flights to great destinations in the fall, and use points to travel nearly for free

Published: September 12, 2018

See more stories
Credit Card Rate Report Updated: August 21st, 2019
Business
15.55%
Airline
17.49%
Cash Back
17.63%
Reward
17.49%
Student
17.69%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.