“Household” income no more a critical criteria for credit card issuers

Monday, April 11th, 2011

On Friday, the Federal Reserve announced that credit card lenders cannot evaluate the repaying ability of the applicant based on the “household” income. All credit card application forms, till date, had the “household” income section that needed to be filled by the applicants. Credit card issuers used to take this figure into consideration, in addition to the credit history of the applicant before either approving or rejecting the request for a credit card. This information was also used by the issuers to set the spending limit on the card for applicants.

However, with the Federal Reserve’s announcement on Friday, things are bound to change now. Credit card companies should consider the individual income of the applicant before approval. This seems to be a better idea as compared to considering the “household” income because, at the end of the day, it is the individual who has to pay off the debts on his credit card; it is not the responsibility of the people he/she lives with.

This announcement also makes getting credit cards even more difficult for people with lesser income. Those who were looking to go in for that platinum card or interest free balance transfer card may have to rethink if their income is limited. The applicants who do get the required approval for the credit cards may have to be content with the credit limit that is decided by the bank. Going forward, the banks will only have to consider the credit report, individual income and credit score while approving the application and setting spending limits.

Latest Credit Card Issuers News

Wednesday, June 22nd, 2016
More and more people are finding out something that used to be difficult to find out—at least for free. Credit scores used to be top-secret and hard to get your hands on, unless ...
Wednesday, January 20th, 2016
Imagine carrying just one credit card with you and earning rewards that you can trade in for free vacations. WorldVentures DreamTrips is teaming up with Nxt-ID to do just that.
Saturday, November 28th, 2015
Good news for U.S. Bank customers: the company has a new online tool to help consumers make savvier choices about personal finances.
Thursday, June 11th, 2015
Discover is going to allow their cardholders to make contactless payments at participating merchants through Apple Pay beginning this fall.
Tuesday, May 5th, 2015
Capital One and Uber have joined to give the Capital One cardholders new ways to save.
Best Credit Offer
Click the Compare link to compare the checked cards side-by-side at the comparison table.
Consumer Rating: 5 / 5
Pacific Credit Group Emporium Black Card
Copyright © 2001-2016 BestCreditOffers.com All Rights Reserved.

* The BestCreditOffers.com.com webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. BestCreditOffers.com.com does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the BestCreditOffers.com.com website are property of their respective owners.

BestCreditOffers.com makes every effort to keep information up to date and accurate. However, the information regularly changes and is presented without warranty. Therefore, we strongly recommend all our readers to visit the credit card application page by clicking "Apply Online!" button to review the detailed credit card's terms and conditions. Note that BestCreditOffers.com may be compensated by the credit card issuers when the readers apply for a credit card through this site.

BestCreditOffers.com is an independent, advertising-supported website which receives compensation from the credit card issuers and companies whose offers appear on the site. Compensation may impact how and where products appear on our site, including, for example, the order in which they may appear on the site pages. BestCreditOffers.com does not review or list all available financial or credit offers.

User Generated Content Disclaimer: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.