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Old 11-26-2015, 08:51 AM   #41
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I actually don't understand why you are concerned that the credit card company doesn't "get it" about what is appropriate for a retiree to spend from their investments. They decided what criteria works for them. If they are mainly going off credit score anyway, stated income must not matter much. If someone asks for what they think is too high a credit limit they can investigate income further if they choose by asking for paycheck stubs, or calling the employer to verify, or other income stubs, or filed tax forms, the latter being maybe a year out of date, but it must not matter in the big scheme of things.

I've been told more than once that loan companies don't like taking savings and investments into account because someone can "run away" with all their liquid assets. But in practice they seem to accept filed tax forms if it comes down to it, and only one cc company ever asked on the application if most of my income came from investments versus salary, pension, etc. Other than preferences for certain sources of income, I wouldn't expect a clerk to understand the bigger picture.

I do notice they are always interested if you own a home, and if so are paying a mortgage, or renting, and the amounts involved.

Obviously, a credit granting company is vulnerable if someone's income or expenses suddenly changes for the worse, but that has always been true - loss of employment, sickness/disability or death in the family, etc., there is always a chance.

But I have never seen questions like "how long have you been retired?", or questions about net worth, or recent changes in employment, or expectations about changes in employment, so in the big scheme it must not matter enough to make a difference.
There are very few things I dont like about this forum. The one thing I dislike is that there are a lot of very knowledgeable people here but that causes them to think they are 100% correct and they dont listen to other opinions or experiences that might make them rethink what they thought they knew. I dont think some of them even listen to what is said to them, which is why I'm not going to respond any further.
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Old 11-26-2015, 09:04 AM   #42
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And a Happy Thanksgiving to all. I plan to use that post-retirement credit card to do a little online shopping this weekend.
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Old 11-26-2015, 09:23 AM   #43
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The last credit card we applied for was a few years ago to get a big store discount, at the cash register. We didn't have to tell the clerk anything to apply other than DH's SS number and drivers license no., which she entered into the cash register. After a few minutes we were denied--the clerk said it was system error and we slunk away like deadbeats. We received a computer generated follow up letter explaining the denial was based on the SS not matching the records. Stupid clerk.
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Old 11-26-2015, 09:34 AM   #44
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Also I forgot to mention that applying for new credit means that I have to unfreeze my credit report with one bureau and with some lenders all three bureaus which is pretty inconvenient. The credit card offer has to be exceptional for me to consider it.
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Old 11-26-2015, 09:53 AM   #45
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Also I forgot to mention that applying for new credit means that I have to unfreeze my credit report with one bureau and with some lenders all three bureaus which is pretty inconvenient. The credit card offer has to be exceptional for me to consider it.
I'd have to do the same and that would cost about $30 to unfreeze three bureaus. I'm flush with credit cards and really only use two. No plans to change.
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Old 11-26-2015, 10:35 AM   #46
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The last credit card we applied for was a few years ago to get a big store discount, at the cash register. We didn't have to tell the clerk anything to apply other than DH's SS number and drivers license no., which she entered into the cash register. After a few minutes we were denied--the clerk said it was system error and we slunk away like deadbeats. We received a computer generated follow up letter explaining the denial was based on the SS not matching the records. Stupid clerk.
Like this post and the one after this one from Corporateburnout, I applied for a CC at Sears to get a discount on an item and was rejected for an unspecified reason. I later got a letter from them with a number to call to find out more. It was because I had a freeze on my credit so they couldn't verify anything. I told the rep that because freezing one's credit is pretty common and may have been done months, if not years earlier, it is easy for the customer to forget this when an application at a cash register is denied.

It took me about 20 annoying minutes at the register to simply buy a $15 item with cash because I tried, unsuccessfully, to get this discount. All I wanted to do was to buy my friggin item and get out of the store.

When I asked to increase the CC limit on my existing card, they told me I needed to unfreeze my credit report for a few minutes. This was done over the phone via conference call and cost me nothing. I was smart enough to have kept the PIN code from the credit reporting agency in an easy-to-find place to speed up the process. The CC limit was increased by the end of business and appeared in my online banking by the next morning.
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Old 11-26-2015, 04:27 PM   #47
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We've did 6 cards among our family members this past year for $400 - $500 each in sign up bonuses, plus the cash back, worth a bit more when we use the points for travel. We also do some checking and saving signups each year as well. The credit card points are usually not taxable income, so worth a bit more to us than 1099 kind of income.

They are worth it to me to do. YMMV.
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Old 11-26-2015, 06:43 PM   #48
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no problem getting another credit card when an offer is too god to refuse.
The last one I applied for gave me a 20000 credit limit even though I under-reported my income. Throw away several offers each week. Nobody is getting any interest payment from me
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Old 11-26-2015, 06:43 PM   #49
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There are very few things I dont like about this forum. The one thing I dislike is that there are a lot of very knowledgeable people here but that causes them to think they are 100% correct and they dont listen to other opinions or experiences that might make them rethink what they thought they knew. I dont think some of them even listen to what is said to them, which is why I'm not going to respond any further.
While you obviously might be right, I've found that the people here are helpful and smart. I enjoy reading what they think, whether they rethink what they think they know or not. On my cynical days the people on this forum give me hope for the intelligence of man. That's just my personal opinion, subject to change of course.
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Old 11-28-2015, 12:29 PM   #50
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Your income is what you report to the IRS. It has little to do with your withdrawal rate.
No, not true at all. What you report to the IRS is a matter of what they legally require you to do so they can give you a tax bill.

I count as income a 5% withdrawal rate (I'm very generous to myself!) from our portfolios. So what if I only spend 3% and re-invest 2%? Actually, to cut down on the paperwork, I short-circuit the process and only take out 3%.
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Old 11-28-2015, 12:42 PM   #51
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But I have never seen questions like "how long have you been retired?", or questions about net worth, or recent changes in employment, or expectations about changes in employment, so in the big scheme it must not matter enough to make a difference.
By the time you retire there are a few decades of history in your credit report.
The only thing the credit card company cares about is if you will pay them back what you've charged. The credit report tells them 99% of what they want to know. Thirty years of "everything paid on time as agreed" is all they need. Your income is a much smaller issue --- if you've always paid on time then they figure that you will manage to find the money to pay them.
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Old 11-28-2015, 01:05 PM   #52
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No, not true at all. What you report to the IRS is a matter of what they legally require you to do so they can give you a tax bill.

I count as income a 5% withdrawal rate (I'm very generous to myself!) from our portfolios. So what if I only spend 3% and re-invest 2%? Actually, to cut down on the paperwork, I short-circuit the process and only take out 3%.
For the purposes of stating your annual income to a credit card company, other than paycheck stubs, SS and pension, they consider what is reported to the IRS as your income, and you can demonstrate it with a copy of the filed 1040 if necessary. This is also the same number used by Medicare, the ACA, and others to determine premiums, eligibility for assistance, etc.

Our retirement fund usually generates more taxable income than what we take out for spending. The rest is reinvested. But whenever I answer the annual income question on a credit application I use what I reported to the IRS for the prior year, as that is the only thing I can back up with documentation.

Anything else is just personal accounting and won't mean anything to a credit or loan company, especially as they don't consider net worth.
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Old 11-28-2015, 01:19 PM   #53
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By the time you retire there are a few decades of history in your credit report.
The only thing the credit card company cares about is if you will pay them back what you've charged. The credit report tells them 99% of what they want to know. Thirty years of "everything paid on time as agreed" is all they need. Your income is a much smaller issue --- if you've always paid on time then they figure that you will manage to find the money to pay them.
This just isn't true, at least as far as getting a significant credit limit. If all you want is the standard $10-15K they give out, you're right. But I want a $50-100K limit, and they just won't give it to me despite paying it off every month (sometimes more than once), never missing a payment, and a credit score in the 800s. And I've had these same cards since the early 90s. But to get the really high limits they base it almost exclusively off your income, although I'm sure a crappy credit score would impact that. So I may try to play a few income games and see if I can get the higher limits I need. It's not like I'm scamming them, other than racking up massive rewards points a few times a year. They get paid, I don't have to jump through hoops, everybody would be happy.
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Old 11-28-2015, 02:00 PM   #54
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This just isn't true, at least as far as getting a significant credit limit. If all you want is the standard $10-15K they give out, you're right. But I want a $50-100K limit, and they just won't give it to me despite paying it off every month (sometimes more than once), never missing a payment, and a credit score in the 800s. And I've had these same cards since the early 90s. But to get the really high limits they base it almost exclusively off your income, although I'm sure a crappy credit score would impact that. So I may try to play a few income games and see if I can get the higher limits I need. It's not like I'm scamming them, other than racking up massive rewards points a few times a year. They get paid, I don't have to jump through hoops, everybody would be happy.

There appears to be no systematic method for credit limits based on my 5 cards. Two were given to me with initial $25,000 limits. A third one last year sent me an unsolicited letter saying I could increase my limit from $17,500 to $25,000 IF I CALLED them to do it. The fourth one a couple years ago doubled my limit without even asking. And ironically the 5th one (the one I use 95% of the time and receive my cash back from) has the lowest limit of $6500 and has never increased it or solicited me to the 10 years I have used it.


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Old 11-28-2015, 03:39 PM   #55
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I think the overlooked factor in wondering about credit limits is that different lenders use different guidelines. Some are known for giving large credit lines (PenFed is one) and some are a lot stingier (Capital One often, Discover as well). If I applied for Discover today I'd never get a credit line the size of what I got with the Discover card I applied for in 2008, probably not even half.


But once you get larger limits from one or two lenders, other issuers seem to be more likely to follow suit.
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Old 11-28-2015, 03:42 PM   #56
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We never had any problem getting credit cards. I don't think merchants have access to your income info, which is legally defined on 1099 forms that only the IRS has. So, they took whatever we told them at face value, and I told my wife to always give them what we actually spent. And as that value was quite reasonable for a working couple, in fact quite low compared to our income when still working, they never questioned it.

If we are to apply for a mortgage, I think they will demand more proof, and the 1099 would be one. I remember that a poster here got a bit of a problem even though his after-tax cash hoard was a lot larger than the mortgage. Banks did not know how to deal with that, and probably still don't.
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Old 11-28-2015, 04:51 PM   #57
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If we are to apply for a mortgage, I think they will demand more proof, and the 1099 would be one. I remember that a poster here got a bit of a problem even though his after-tax cash hoard was a lot larger than the mortgage. Banks did not know how to deal with that, and probably still don't.
As I stated in an earlier post a new rule introduced by Freddie Mac allows retirement assets to be used to qualify for a mortgage. A certain percentage of retirement assets are used for qualification so a $1 million portfolio will provide a additional 24K of annual income.

Buying a home in retirement
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Old 11-28-2015, 07:18 PM   #58
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We never had any problem getting credit cards. I don't think merchants have access to your income info, which is legally defined on 1099 forms that only the IRS has.
Umm...are you sure only the IRS has it? Hacking of Tax Returns More Extensive Than First Reported, I.R.S. Says

But your point is taken. Next time I ask for a higher limit I'll give them a higher income. Truly, my income can be pretty much anything I want it to be. I've always reported just my tax return income, which I work to keep below the 15% bracket for Roth conversion purposes.
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Old 11-28-2015, 07:22 PM   #59
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We never had any problem getting credit cards. I don't think merchants have access to your income info, which is legally defined on 1099 forms that only the IRS has. So, they took whatever we told them at face value, and I told my wife to always give them what we actually spent. And as that value was quite reasonable for a working couple, in fact quite low compared to our income when still working, they never questioned it.

If we are to apply for a mortgage, I think they will demand more proof, and the 1099 would be one. I remember that a poster here got a bit of a problem even though his after-tax cash hoard was a lot larger than the mortgage. Banks did not know how to deal with that, and probably still don't.
No, no credit company/bank has your IRS documents (hacking not counted). But they may request an IRS transcript (the official IRS version of your tax filing) as proof of income.
http://www.bankrate.com/finance/mort...returns-1.aspx
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Old 11-28-2015, 08:05 PM   #60
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Umm...are you sure only the IRS has it? Hacking of Tax Returns More Extensive Than First Reported, I.R.S. Says

But your point is taken. Next time I ask for a higher limit I'll give them a higher income. Truly, my income can be pretty much anything I want it to be. I've always reported just my tax return income, which I work to keep below the 15% bracket for Roth conversion purposes.
Now we've come full circle to exactly what I said a few days ago....and exactly what I told the credit card company who raised my limit about 2 minutes later. Of course I don't know how high they would've gone.
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