Credit card companies aren’t interested in approving everyone for credit cards. They want to know “does this person have the ability to pay his/her bill on time?”

In other words, do they have a reliable and steady income?

The Credit Card Act of 2009 requires credit card companies to take “the ability of the consumer to make the required payments” into account when deciding whether to approve an application.

A 2013 amendment to the federal regulations surrounding the Card Act by the CFPB expanded the definition of one’s ability to pay so that people 21 and older can include any income to which they have a “reasonable expectation of access.” This can include income from a spouse, partner, or other members of your household. It can also include nonwage income such as savings, trust fund distributions, unemployment compensation, and others.

This also includes any anticipated income as long as it falls under “reasonable expectation of access.” If you were recently hired for a new job at a set salary that hasn’t yet begun, then you can include the salary. But you can’t write that you earn fifty million dollars a year because you bought a lottery ticket and you hope on winning.  

What you can state as income if you’re age 21 and older

Borrowers over 21 can list any income to which they have “reasonable expectation of access.” This broad definition includes:

• All personal income
• Investment income from stocks and rental properties
• Income from a spouse, partner, or other household income
• Allowances and gifts
• Trust fund distributions
• Scholarships and grants
• Retirement fund distributions
• Social Security income
• Child support
• Alimony
• Public assistance
• Unemployment compensation
• Military allowances

Household income is not limited to your spouse or partner. It can even include other family members, such as those in multigenerational households. 

For example, someone who lives with an adult child, with their parents or even grandparents could also include any income used by the household. 

And as with your own income, you can count all of the sources of income from each member of your household, so long as you have a reasonable expectation of access to this income to pay for your credit card bills.

What you can state as income if you’re under 21

Borrowers ages 18-20 can report only independent income, which typically includes:

• Personal income, including regular allowances
• Scholarships and grants
• Trust fund distributions or inheritances

Is income considered your net income or gross income?

Banks and credit card companies may ask you for your:

• Gross Income
• Total Income
• Annual Income
• Net or annual net income
• Monthly income

Annual net income is the amount of money you make in a year after all deductions and taxes are subtracted out. If they don’t ask for net income, then you should assume they are asking for your gross income which is your income before deductions and taxes.

Examples of what credit card companies ask for

The Capital One Venture card application says income can include:

• Wages from full-time, part-time, or seasonal jobs
• Self-employment income
• Interest or dividends from investments
• Retirement
• Public assistance
• Shared income from somebody else that is regularly deposited into your individual account or into a joint account

The Chase Sapphire Preferred application mentions examples of income you can include such as:

• Salaries
• Investments
• Social Security benefits
• Retirement
• Income from others you use to regularly pay your bills if you’re 21 or older
• Child support or alimony

The Amex Blue Cash Preferred card says you can include these items in the total income field:

• Salary and wages
• Investments
• Rental income
• Retirement benefits
• Income from others you use to regularly pay your bills if you’re 21 or older
• Child support or alimony

The Citi Prestige application says you can include these items in the total income field:

• Salary and wages
• Interest and dividends
• Rental income
• Retirement benefits
• Income from others you use to regularly pay your bills if you’re 21 or older
• Child support or alimony

Can you be convicted of a crime for misreporting your income?

Yes, you can, but it’s an extremely rare occurrence. Here is the one case we found.

Rochester Man Sentenced for Loan Application Fraud

U.S. Attorney’s Office
Western District of New York
November 19, 2012

ROCHESTER, NY—U.S. Attorney William J. Hochul, Jr. announced today that David P. Gaylord, 52, of Rochester, New York, who was convicted of bank loan application fraud, was sentenced to time served and five years’ supervised release and ordered to pay $46,914.73 in restitution by U.S. District Judge Charles J. Siragusa.

Assistant U.S. Attorney Tiffany H. Lee, who handled the case, stated that in 2006, while residing in the Western District of New York, the defendant submitted various credit card applications to Advanta Corp., Bank of America, and Family First Federal Credit Union. Gaylord knowingly provided false information regarding his income in order to obtain lines of credit from the banks and credit union. The defendant indicated that his income was anywhere between $90,000 to $122,000 when, in 2006, he reported to the Internal Revenue Service that his income was approximately $12,488. Gaylord ended up leaving outstanding balances on the various lines of credit and filed for bankruptcy.

The sentencing is the culmination of an investigation on the part of special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota.