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CC Denied Because We're Not Up To The Eyeballs in Debt
Old 01-23-2018, 04:33 PM   #1
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CC Denied Because We're Not Up To The Eyeballs in Debt

We thought it was time to apply for an Amazon CC. We order enough through them and the 5% cash back would be nice. Got a letter yesterday that we (DH) were denied because 1. delinquencies (there are none) and 3 other reasons.

Called them today and they confirmed there are no delinquencies and the reason for the denial was that we had too much credit available and only 1% utilization of same, in other words, we aren't up to our eyeballs in debt . They would not reconsider even after we explained that 2/3 of the available credit was a HELOC with no balance. All CCs are paid off monthly and we have no outstanding loans which also counts against us (one of the reasons listed) as DH's FICO score is only 769 while mine is 820.

I suspect the real reason was that we are both retired and they were unable to verify income which is substantial. Funny that when we bought our $45K car at the end of August, the dealership required we finance the car in order to get the $750 financing credit. Took them 5 minutes to run credit reports...they financed the full amount of the car without a down payment...go figure. Before retiring, in addition to getting a HELOC, make sure you apply for any CCs.
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Old 01-23-2018, 04:37 PM   #2
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Originally Posted by TrvlBug View Post
We thought it was time to apply for an Amazon CC. We order enough through them and the 5% cash back would be nice. Got a letter yesterday that we (DH) were denied because 1. delinquencies (there are none) and 3 other reasons.

Called them today and they confirmed there are no delinquencies and the reason for the denial was that we had too much credit available and only 1% utilization of same, in other words, we aren't up to our eyeballs in debt . They would not reconsider even after we explained that 2/3 of the available credit was a HELOC with no balance. All CCs are paid off monthly and we have no outstanding loans which also counts against us (one of the reasons listed) as DH's FICO score is only 769 while mine is 820.

I suspect the real reason was that we are both retired and they were unable to verify income which is substantial. Funny that when we bought our $45K car at the end of August, the dealership required we finance the car in order to get the $750 financing credit. Took them 5 minutes to run credit reports...they financed the full amount of the car without a down payment...go figure. Before retiring, in addition to getting a HELOC, make sure you apply for any CCs.
We have had no trouble getting new credit cards in spite of having no outstanding loans. We've never had to verify income.

But we don't have a HELOC.

I know some places will deny a new credit card if you've opened X cards in the past two years, or you have too many credit report inquiries.

Maybe they've changed the rules.
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Old 01-23-2018, 04:38 PM   #3
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That is so weird. When I applied for my Amazon Visa in May of 2014, I had not had a CC, car loan, or any other consumer loan for 16 years and I had not even had a mortgage for 8 years. And, I had been retired for 5 years. Yet, I had the card in 5 minutes or less IIRC. Like you, I had no late payments for anything, because I have regular bills like utilities on automatic deduction from my checking account and I pay the one time bills like dentist bills on the spot.

Maybe they are tightening up on their requirements.
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Old 01-23-2018, 04:38 PM   #4
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When I was married to my first husband, the financial basket case, he was maxed out on his credit cards and he got more offers, for bigger limits, than I did.

I always pay my cards off in full and haven't had a car loan since 1991 but I carry a mortgage, which has probably helped when I applied for credit cards over the years.
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Old 01-23-2018, 04:39 PM   #5
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Maybe I'm just not recalling, but I don't remember being asked about my income for that card. I think you are correct though, that if they did ask and you told them you are retired, they rejected you for lack of income. Since they don't ask about your assets, income is all they have to go on.

Can you report dividend and cap gain income?
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Old 01-23-2018, 04:39 PM   #6
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We have had no trouble getting new credit cards in spite of having no outstanding loans. We've never had to verify income.

But we don't have a HELOC.
Same here.
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Old 01-23-2018, 04:42 PM   #7
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We do have a HELOC and have applied and been approved for several CCs in the 12 years we've been retired. That includes both the Chase Amazon Prime Rewards card and the Amazon store card.
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Old 01-23-2018, 04:44 PM   #8
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Maybe I'm just not recalling, but I don't remember being asked about my income for that card. I think you are correct though, that if they did ask and you told them you are retired, they rejected you for lack of income. Since they don't ask about your assets, income is all they have to go on.

Can you report dividend and cap gain income?
I asked to get my limit increased on my old Fidelity AMEX, now visa. They were reluctant to do so, I finally did get them to accept distributions and income from investments.
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Old 01-23-2018, 04:46 PM   #9
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Maybe I'm just not recalling, but I don't remember being asked about my income for that card. I think you are correct though, that if they did ask and you told them you are retired, they rejected you for lack of income. Since they don't ask about your assets, income is all they have to go on.

Can you report dividend and cap gain income?

Yes... I report all income that will go on a tax return...
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Old 01-23-2018, 04:53 PM   #10
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I can't remember where, but I read something not too long ago about people being denied credit because they had a lot of cards with high limits but very low balances (just like the OP). Apparently, some institutions are afraid that you might suddenly go nuts and run up all your cards, giving you a staggering amount of debt that you have no earned income to repay.

Sounds to me like they're running their show using an AI that isn't actually very I.
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Old 01-23-2018, 04:54 PM   #11
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Yes... I report all income that will go on a tax return...
It's been 4 years so I don't remember the form for the Amazon Visa card, but if they asked me I would have given them my AGI from the previous tax return. If they asked me what my occupation was, I said "Retired Oceanographer" or if it was a pull-down with limited choices, then "Retired".

The reason I would respond like this is that if they don't like it, my opinion is that they can stuff it you know where. I'm sort of like that sometimes (cranky old witch), and besides, I didn't really need the CC so much as just wanted to try one.

BTW, they only gave me $2500 limit at first but that has tripled in the four years I have had it. Makes me feel like Sally Field, when she said,

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Old 01-23-2018, 05:20 PM   #12
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I'm surprised at that. My DD who is 24 just got her first credit card a couple of weeks ago; she started her first real job out of college six months ago. It was also the Amazon Visa card. They only gave her a $900 limit but she has to start somewhere. Plus it only took about 30 seconds for them to let her know online.

OTOH I just applied for a Chase Sapphire Reserve a few weeks ago and got it. It is only in my name, I am retired. It asks something like household income and I put in my husband's salary. Did not ask for his SSN or any identifying info about him.

Now I have to crank up my spending to get my free sign-up points!

Also and I have several cards with high limits, several with Chase, low or no balances. It might be that I have a "relationship" with Chase--by default--they bought our other banks/credit cards over the past 20+ years.

So there was more for the computer to look at instead of just my FICO score.
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Old 01-23-2018, 05:22 PM   #13
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I've had no trouble getting credit cards after retiring either. They ask me to verify my income and I write the number in the box.
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Old 01-23-2018, 05:41 PM   #14
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I don't think I have ever been turned down, but haven't applied for many. Several years ago I applied for a PenFed cc. I had close to $200k in cd's with them at the time and figured I would have no trouble. After applying, I get a call stating they wanted copies of tax returns for 3 years. I told them to shove it. A month later I get an email stating I had been preapproved for a card with a credit limit of $25k. Since then they have almost doubled it. Crazy.
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Old 01-23-2018, 06:16 PM   #15
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DH are I are similar, both 800+ FICO's, gobs of credit unused, HELOC, no debt, no car notes or mortgage in past 10+ years.

But we do put in a good estimated income number. It doesn't go thru verification for a credit card app, perhaps only for LOC increases. We both got the Amazon cards within the past 3 or 4 months.
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Old 01-23-2018, 06:22 PM   #16
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Maybe I'm just not recalling, but I don't remember being asked about my income for that card. I think you are correct though, that if they did ask and you told them you are retired, they rejected you for lack of income. Since they don't ask about your assets, income is all they have to go on.

Can you report dividend and cap gain income?
I just make up a number that is close to what my 1040 says my income is.
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Old 01-23-2018, 06:23 PM   #17
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Maybe I'm just not recalling, but I don't remember being asked about my income for that card. I think you are correct though, that if they did ask and you told them you are retired, they rejected you for lack of income. Since they don't ask about your assets, income is all they have to go on.

Can you report dividend and cap gain income?
If you reported income to the IRS on your 1040, you have income. How can a retiree have no income? Do they live only on taxable savings and are not receiving any interest or dividends?

These credit cards don't ask for your wages or salary alone. They ask for income. Income includes interest, dividends, and capital gains, pension, social security, and withdrawals from IRAs. I give them the income I declared on my last 1040 rounded to some whole number. I know that if every required I can prove it from my tax return.

I always say that I am retired and/or unemployed where asked in the application. No credit card company infers from that that someone has no income.

We have gotten numerous credit cards since retiring with no problems.
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Old 01-23-2018, 06:25 PM   #18
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I can't remember where, but I read something not too long ago about people being denied credit because they had a lot of cards with high limits but very low balances (just like the OP). Apparently, some institutions are afraid that you might suddenly go nuts and run up all your cards, giving you a staggering amount of debt that you have no earned income to repay.

Sounds to me like they're running their show using an AI that isn't actually very I.
Yes - I had also read that criteria may change soon that raises a red flag for low balances and high limits. Seems very silly to me.

Maybe this is the first example where we see some new criteria?
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Old 01-23-2018, 06:28 PM   #19
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Tangentially related to this: I recently had my credit score whacked by over 50 points because I used too much of my credit limit (paid off every month, of course). These were items ( cruise and trailer repairs) I could have paid with a check, but wanted the points!

And, of course, there is the standard statement that I have no recent experience with a mortgage or any other recurring debt.

A month later, the score has recovered by half, so it is catching up.

More on topic: I have only applied for one credit card since retiring. I did say retired, but also showed income as my last 1040 amount ( I didn't say 3/4 of it was a Roth conversion). It was Capital One, and there was no problem. I do have a small MM account still with them.
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Old 01-23-2018, 06:46 PM   #20
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I can't remember where, but I read something not too long ago about people being denied credit because they had a lot of cards with high limits but very low balances (just like the OP). Apparently, some institutions are afraid that you might suddenly go nuts and run up all your cards, giving you a staggering amount of debt that you have no earned income to repay.

Sounds to me like they're running their show using an AI that isn't actually very I.
This is what they are claiming. That we have too much UNUSED available credit. If available credit was being used, they would have no problem issuing the card . I did mention that 2 of our 5 CCs with very high limits are Chase CCs ; didn't sway her. I don't think she or the other person making the decision know what a HELOC is and that it acts like a mortgage and not like CC money available.

WRT income, all we reported was the income resulting from SS, a small annuity and RMDs, all easily verifiable if necessary.
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