Credit Is REALLY Hard to Get

[Gearhead Jim]

Last week I applied online for a BP/Amoco VISA card. Although my credit score is 908 out of 950, I was declined because:
Anticipated income from account not sufficient to cover account expenses.
Well, I guess I can reluctantly understand that, I pay all my bills on time and NEVER run a balance on the cards.

My wife and I keep most things including checking and credit cards in separate accounts, so she applied. I can't tell her credit score, she pays her bills on time but has ~$5,000 total cc balances. She was declined for the same reason:
Anticipated income from account not sufficient to cover account expenses.
That's BS, the other companies are making a killing off of her interest expenses.

Screw them, I'll stay with my Shell MasterCard.
I use the gas company cards only for gas, mostly Shell because I get 5% back. Looks like it will stay that way.

 

[W2R]

Amazing! I am speechless. Just when I think I have heard the most ridiculous story possible about credit card companies, something even more insane comes along.

 

[LOL!]

Anticipated income from account not sufficient to cover account expenses.

That makes perfect business sense. It seems like if you charge a small amount every month, then the CC company does not earn enough from fees it gets from merchants on your charges to justify giving you a card.

However, if you charge a large amount every month and pay the balance in full, then the fees from merchants can cover the costs of providing you a credit card, mailing you bills, collecting your payments, etc.

So I'm guessing the company estimated how much you would charge on the card every month, how much interest you would pay, and blew you off. So you blew them off. Big deal.

 

[LOL!]

I have to ask: Why did you apply for this card anyways? You don't even need it since you already have a 5% cash-back-on-gas card.

 

[easysurfer]

I haven't applied for a CC since FIRE'ing but do wonder if I'd be turn down because of no more w*rking income.

 

[Gearhead Jim]

That makes perfect business sense. It seems like if you charge a small amount every month, then the CC company does not earn enough from fees it gets from merchants on your charges to justify giving you a card.

However, if you charge a large amount every month and pay the balance in full, then the fees from merchants can cover the costs of providing you a credit card, mailing you bills, collecting your payments, etc.

So I'm guessing the company estimated how much you would charge on the card every month, how much interest you would pay, and blew you off. So you blew them off. Big deal.

I charge a fairly large amount on some of my other cards but pay it off, so does my wife and she doesn't pay it all off (like I wish she would). They could make a ton of money by giving her a card.

I have to ask: Why did you apply for this card anyways? You don't even need it since you already have a 5% cash-back-on-gas card.

We take long car trips, Shell is hard to find in some parts of the country.

 

[Gearhead Jim]

I haven't applied for a CC since FIRE'ing but do wonder if I'd be turn down because of no more w*rking income.

I've been retired for 4+ years, my credit score is good and so is my total retirement income from various verifiable sources. This is the first time I've applied for credit in over a decade, but the letter also said that credit risk was not a factor in their decision.

 

[Moemg]

I have a Sears card that I only use for Appliances or patio furniture (basically large purchases ) . I take the zero interest on these items and pay them off before the interest kicks in rather than taking the money from savings where it's earning interest . The week before Christmas my fridge started acting up so I went to Sears and bought a new one . When I gave them my card it was denied . It had been cancelled without notifying me . They immediately opened a new account and gave me a discount so I guess I'm still a good credit risk .

 

[bbbamI]

This is why we applied for another (back-up) credit card before DH retired. We have three major credit cards now and use each one. If one cc company gets wiggy, we'll have two remaining. Of course we pay them off each month.

 

[Alan]

We also have 3 cards and 2 we try and keep ticking over, while charging the bulk to the one with the biggest cash back. A few months ago we did have the main one compromised and it took over a week to get a replacement so it was nice to have back-ups available.

 

[Moemg]

You really do need a back up especially if you travel . I've heard of people trying to use their cards while on vacation and either they were cancelled or their limits had been lowered.

 

[LOL!]

So it seems that the solution is to have your wife apply online for the card.

 

[traineeinvestor]

You really do need a back up especially if you travel . I've heard of people trying to use their cards while on vacation and either they were cancelled or their limits had been lowered.

This is one of the reasons why I carry three credit cards (Visa, Mastercard and Amex - the last being provided by my employer) and my wife two cards.

Before I retire, I intend to (i) take out an Amex in my own name and (ii) review the morgages on the properties and extend some of the terms and/or (maybe) draw down more principal. I'm assuming that it would get a lot harder to get loans once I cease to have a paycheck. [Note for the lawyers - there is nothing illegal about this here in HK unless the bank asks about my retirement plans and, to date, none of them have]

 

[Gotadimple]

I'm assuming that it would get a lot harder to get loans once I cease to have a paycheck.

Don't know about Hong Kong, but with have good credit and verifiable sources of income -- even if retired -- I was able to refinance my mortgage with a different lender.

-- Rita

 

[rescueme]

That makes perfect business sense. It seems like if you charge a small amount every month, then the CC company does not earn enough from fees it gets from merchants on your charges to justify giving you a card.

However, if you charge a large amount every month and pay the balance in full, then the fees from merchants can cover the costs of providing you a credit card, mailing you bills, collecting your payments, etc.

I would have to agree with your logic. While I/DW also pay off our respective cards in full each month, we do charge a lot on each of our cards during the year (normally $25-$35k total) by charging everything possible (even our home/car insurance) along with all utilities - if they take a card.

I'm sure our two cards (Visa/AMEX - via Fidelity through FIA card services) gets enough transaction fees to cover our usage, regardless of the full payment and cash back we get over the year...

 

[ksr]

I have a Sears card that I only use for Appliances or patio furniture (basically large purchases ) . I take the zero interest on these items and pay them off before the interest kicks in rather than taking the money from savings where it's earning interest . The week before Christmas my fridge started acting up so I went to Sears and bought a new one . When I gave them my card it was denied . It had been cancelled without notifying me . They immediately opened a new account and gave me a discount so I guess I'm still a good credit risk .

This happened to me at Sears a few years ago. Apparently my cc had been closed due to inactivity, but I was never notified. They did the same thing for me - opened a new one on the spot.

 

[Lakedog]

I've been retired for 4+ years, my credit score is good and so is my total retirement income from various verifiable sources. This is the first time I've applied for credit in over a decade, but the letter also said that credit risk was not a factor in their decision.

You might try Penfed for a reward card (as mentioned frequently on this site) since it pays 5% on gas -- I got one after I retired and they keep offering to increase the credit limit.

 

[Ed_The_Gypsy]

Well, I guess I can reluctantly understand that, I pay all my bills on time and NEVER run a balance on the cards.

That must be the reason.

A few years ago, I read in Yahoo that people who do not carry a balance on their CCs were now called deadbeats. A close relative, retired from the CC business, didn't belileve me. Had to show her the article. Amazement.

 

[Alan]

That must be the reason.

A few years ago, I read in Yahoo that people who do not carry a balance on their CCs were now called deadbeats. A close relative, retired from the CC business, didn't belileve me. Had to show her the article. Amazement.

Was it one of these?

Credit card deadbeats


Credit-Card Companies Become 'Deadbeats'

 

[Ed_The_Gypsy]

Alan, not the exact same one, but the message is there.

How is ol' Red Stick these days?

 

[Alan]

How is ol' Red Stick these days?

Soon to be a distant memory as we move back to Texas on Wednesday.

We've enjoyed being here this last couple of years but are keen to move closer to the kids, and closer to some hills.

 

[tryan]

I said on a few threads I was rejected for a HELOC re-fi ... "Insufficient income." Seems they only wanted working types. Not enough income shown on 2 years taxes to entice them. And that was a couple years ago.

I would think in this enviroment anybody thinking of retiring should line up any all credit lines/mortgage refis while working.

 

[WhoDaresWins]

I was going to cancel some credit cards I never use...just to clean things up and not have them languishing in a drawer. There are no fees involved with maintaining them. Maybe I should reconsider this action. I use two of my cards regularly...one for cash back and the other for airline miles and pay them off every month. I am not planning on getting any mortgages or lines of credit.