CC Denied Because We're Not Up To The Eyeballs in Debt

[ERD50]

Quote:

Originally Posted by TrvlBug 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.

Exactly. It might seem silly, but it does have some logical foundation. And I agree with the others, the HELOC is probably the big red flag.

Extreme Example to illustrate:

Person A has 3 cards each with a $25,000 limit. Each month, he racks up ~ $24,000 on each one, and pays it in full each month.

Person B has the same 3 cards each with the same $25,000 limit. Each month, he only charges $17 to each one, and pays it in full each month.

To the CC company, Person A has a history of being able to manage the debt that they can incur. They might see person B as a ticking time bomb, who may suddenly spend a lot, and not be able to pay it off.

For income, all I've done is report 1040 AGI, and was never questioned beyond that.

-ERD50

[aknowhow78]

Quote:

Originally Posted by TrvlBug 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 [emoji23]; 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.

Maybe they suspect you be a card hacker? I believe that is the term used for an individual who get a credit card just to earn points or discounts and they paid off the balance each month so the credit company does not make money off of them.

[audreyh1]

Quote:

Originally Posted by aknowhow78 Maybe they suspect you be a card hacker? I believe that is the term used for an individual who get a credit card just to earn points or discounts and they paid off the balance each month so the credit company does not make money off of them.

The companies that set up a limit of how many cards you have applied for in a 24 month period have already put up a barrier against card hacking. There is no "suspect" or "guess" but a criteria that is applied.

If they haven't applied and been approved for credit cards in the last couple of years, hacking cards won't be the reason for denial.

[Perryinva]

So cancel the cards you aren’t using! Why keep them? I make very good income, I’m still working, DW is retired & we both had 820+ scores, 2 mortgages (total under $3k/m) but we got turned down for a Chase Sapphire, IIRC, for the same reason. Too much unused credit. And no HELOC). We closed a few cards, which dropped us to around 790. After a few months, back to about 810. We’re giving it a year before applying again. We don’t need it, but there are only so many Avios and free trips one can use on BA.

[Senator]

Credit card companies cannot verify income. They rely on the honor system and your credit score/report.

[scrabbler1]

Quote:

Originally Posted by CardsFan 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.

I got whacked like that last year, too. It wasn't 50 points but more like 20, which was a lot because my credit score has been very, very stable. It came from simply charging about $1,100 one month instead of the usual $$200. It bounced back most of the way a month later and al the way back the moth after that.

At least when I applied for a CC limit increase back in 2015, all they wanted to see was a credit report from one agency. I had to place a temporary thaw on it before they viewed it and quickly granted the increase.

[Badger]

I only have a couple of CC and one debit card that stays locked up unless we are traveling. We have had a credit freeze through all 3 agencies for the past 6 years or more so applying for another card is too much of a hassle that is not necessary. So I can't comment. We use CC as long as they remain in my hands otherwise I use cash and pay off the CC balance each month.

Although as I think of it we haven't been getting as many CC offers through the mail lately. I wonder if there is a connection.

Cheers!

[karen1972]

I'd lean towards it being the HELOC.

I got a new CC last year from Capital One, it asked for Income (put in Dividend/cap gains) and net worth. There is no way they could verify either since they asked for no details so I assume they simply pulled a credit report and approved.

I do notice most of my credit cards ask for income verification on a yearly basis and most have switched to including a "net worth" option. I have to assume the growing aging population is creating a new need to confirm ability to pay back both ways.

Wealthy retirees that plan to do WAY more spending in their retirement and want new/better credit cards so they can travel, etc.

Poor retirees who may not have enough saved which see Credit Cards as a way to "borrow" retirement money and if it doesn't get paid back.. well it can't be passed on to your kids. You do hear of elderly having $80-100K in CC debt that they have no way of paying back and let's face it with health care costs I could see people crossing that ethical line.

[Yarnstormer]

Years ago I applied for an Amazon card and was denied due to having recently opened another card. I haven’t tried again. It was very illogical!

[bigcmagor]

Last fall, we opened a double cash back cc account to take advantage of the additional rebate. Last week, we found out the hard way that the limit was too low. This is the only card we use and we use it for everything, including a number of improvements for our home recently. Nothing like standing in line at the check out and getting a denial.


Called them when I got home and was informed we had gone over the credit limit. How about a call or text before causing embarrassment? The service rep offered to raise the limit by $2,000 immediately. I asked for an additional $10,000 so that we might avoid similar circumstances in the future. He said he would have to do a "hard credit check" to process the request. Fine, whatever.


An hour later, they called back to say a partial request had been granted of an additional $1,000. I later found out my 825+ fico score dropped by 30 points due to the inquiry. Dignity required going back the 1.5% cash back card we used to use.


I guess a mid six figure income, 35 year employment with the same company and no debt other than the monthly credit card balance (that is always fully paid) makes me a quasi deadbeat. Now I wonder how much further my credit score will drop if I close the account.

[Texas Proud]

Quote:

Originally Posted by karen1972 I'd lean towards it being the HELOC. I got a new CC last year from Capital One, it asked for Income (put in Dividend/cap gains) and net worth. There is no way they could verify either since they asked for no details so I assume they simply pulled a credit report and approved. I do notice most of my credit cards ask for income verification on a yearly basis and most have switched to including a "net worth" option. I have to assume the growing aging population is creating a new need to confirm ability to pay back both ways. Wealthy retirees that plan to do WAY more spending in their retirement and want new/better credit cards so they can travel, etc. Poor retirees who may not have enough saved which see Credit Cards as a way to "borrow" retirement money and if it doesn't get paid back.. well it can't be passed on to your kids. You do hear of elderly having $80-100K in CC debt that they have no way of paying back and let's face it with health care costs I could see people crossing that ethical line.

I have noticed them asking for my income also.... I ignore them... so far nothing has happened with any of them.... and this is going on my 3rd year of them asking...

[Yarnstormer]

I got a costco card intending to put everything on it. Immediately, the first payment (entire months spending) put a hold on the account because of the number! That happened twice. They did raise my limit but it has to do with the payment. Now I pay mid month if It looks like it might get too high. Anyone know if I will get automatic credit increases from them even with my credit locked down?

[calmloki]

Quote:

Originally Posted by bigcmagor .... I guess a mid six figure income, 35 year employment with the same company and no debt other than the monthly credit card balance (that is always fully paid) makes me a quasi deadbeat. Now I wonder how much further my credit score will drop if I close the account.

You may be a deadbeat by card company definition: according to them a deadbeat is a customer who pays in full each month. yeah.

To OP: if the Amazon card is backed by Chase and you have other Chase cards try asking that they transfer some of the credit limit from one Chase card to the new Amazon (Chase?) card. That means they have zero extra risk and calms their warning bells.

[Danmar]

Next thing they will be denying cards to people who pay them off every month? I guess as long as they can earn retail exchange they make something. We regularly get “pre approved” CC offers to our address in Arizona. As soon as they find out we don’t have a SS number the approval evaporates.

[Chuckanut]

You might wish to open a CreditKarma account. Once you do it's easy to get a feel about things like your credit score and to see if anything odd has happened to your credit picture. Also, CK lists how your stand with various criteria used to calculate your score. Some items are high impact while others are medium and low. I try and minimize high impact things (like not making payments on time) and dont worry about the low impact things.

[tmm99]

I was denied a credit increase for a Costco MC (a Canadian Costco card). They said My balance never gets high enough so I didn't qualify. I was like, what

[ERD50]

Quote:

Originally Posted by Danmar Next thing they will be denying cards to people who pay them off every month? I guess as long as they can earn retail exchange they make something. ... .

Seems the retail exchange is enough to make them want my business, as they have never made any money in interest from me.

But suppose if you only charge a small amount and pay that off every month, they might figure you just aren't worth much to them. I wonder what their annual fixed costs are for a low use customer?

I do have one card that I keep as a backup now. I make a couple charges around this time in an attempt to keep it active, as they pay the reward in February. Then I make a charge to "use up" the reward (or else they send me a $0.79 check 3 months later!).

I keep thinking they will drop me due to low use, but it hasn't happened yet.

-ERD50

[kgtest]

Quote:

Originally Posted by audreyh1 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.

This is true. For instance I already have the maximum # of cards that Chase and AmEx are willing to issue. There is a period of time that must pass if you cancel before getting a new one, and for the AmEx Delta, you only get one sign-up bonus per lifetime.

Things to think about when gaming points. But Ultimate Rewards pts are awesome. I have the Chase Trifecta and I've scored literally dozen's of tickets for $11.20/ticket plus usually around 7-13k UR pts.

[kgtest]

Quote:

Originally Posted by scrabbler1 I got whacked like that last year, too. It wasn't 50 points but more like 20, which was a lot because my credit score has been very, very stable. It came from simply charging about $1,100 one month instead of the usual $$200. It bounced back most of the way a month later and al the way back the moth after that. At least when I applied for a CC limit increase back in 2015, all they wanted to see was a credit report from one agency. I had to place a temporary thaw on it before they viewed it and quickly granted the increase.

This happens to me occasionally. I haven't really figured out any rhyme or reason. I sometimes carry up to 12% DTI on my cards. It seems if I pay down the debt my score goes up a little but not a lot.

I know as long as you are above like 720 or so you will likely get approved if you don't have too many of the same issuer's cards.

[athena53]

Quote:

Originally Posted by Danmar Next thing they will be denying cards to people who pay them off every month? I guess as long as they can earn retail exchange they make something.

I sure hope not- that would be me! I agree that they'll always make something off the merchant fees and in my case, my monthly charges average about $3,000 because I put everything I can on the cards and that includes some expensive travel. I could see them closing out or refusing applications for accounts that they think might not generate enough merchant fees- or trying to make it up with an annual fee.