We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Credit cards income restrictions
Hi,
Apologies if this has already been asked elsewhere.😊
I'm looking into applying for a credit card at the moment, and I can see some have minimum salary requirements, e.g. must be earning above £7000 to apply.
I fulfil that criteria for now, but I just wondered, what would happen if I lost my job or had a period between jobs in the future once I'd been approved for the credit card? Would I have to let the cc company know, and would I lose access to the card/have to close the account?
Comments
-
You'd need to check the individual cards' Terms & Conditions to be sure but I'd be very surprised if any card issuer would care as long as you were able to continue making the necessary monthly payments.
1 -
I would say that much like mortgage applications, once you have met the criteria, nobody is checking back on you for the next 25 years providing the bills keep on being paid.
As with all credit card T's and C's though, they will reserve the right to call in the debt at their discretion at any time of their choosing should they think your circumstances exceeds their current risk criteria for whatever reason.
• The rich buy assets.
• The poor only have expenses.
• The middle class buy liabilities they think are assets.3 -
The terms might state that you have to tell them if you lose your job as it could affect the repayments. It's probably not going to be enforced but I could imagine a rare scenario where someone got into financial difficulty and tried to do an unaffordable lending complaint and the firm pointed out they were not told and so didn't have the option to assist early on or reduce your limit to reduce spending.
In reality I suspect if you kept paying and managed your spending appropriately, they would not ever follow it up.
Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
1 -
What do you mean not in forced? In that they wont claim a breach of terms if they look at your LinkedIn profile and see you've been made redundant? Even if they did they can only claim for what losses they actually suffered due to the breach which if you have kept paying in will be 0.
The requirements are normally stated as the conditions to be able to apply for the card, not conditions that you must continuously abide by. As you say, you are required to inform them of any material change in circumstances, which becoming unemployed probably triggers unless your next role is already lined up and you are just taking some time off between roles. Most arent going to cancel your account, obviously some who become unemployed get notable redundancy payments so arent automatically in financial difficulty, however they may well adjust their decision making on if to offer you credit limit increases etc and may act faster on reducing limits etc were you to start missing payments.
0 -
If the terms say you must let them know if you lose the job or experience financial difficulty and you don't, you are breach and they can close the account. Note that terms can require stuff like this, not just on application
Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
0 -
I've had periods of unemployment/underemployment after being made redundant. Cards were never shutdown nor credit limits cut.
By the same token, I had a personal rule - never apply for credit when unemployed or underemployed. That way I never got asked what my salary was.
The only way a credit card provider could tell something might be happening was that my monthly spend went down as I "cut my cloth according to my means" (the balance got cleared in full each month).
0 -
They don't know if you are unemployed and provided you keep paying they won't do anything.
The point I made was that in the rare scenario you have financial hardship, if you then tell them you are struggling and especially if an unaffordable lending complaint was put in, they can show that per the terms you didn't tell them you lost your job so they aren't liable, it's not likely, it's just something you agreed to when you signed up with some firms
Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
0 -
My experience is that I applied for and got 3 cards whilst I was working. I then stopped working and was surviving on my savings but no income as such.
After I stopped working for two of my cards, the card provider shut down the card. Details below. In the John Lewis case, the business was moved to NewDay. I was not offered a replacement card by NewDay. I then went applied for a John Lewis card with NewDay and they were not interested. I presumed this was because of my lack of income.
My only advice when applying for a credit card is you might be better off applying for a card that is offered directly by a bank or building society. In my opinion these are less likely to be closed than a co-branded card, but this is not an impossibility. For example, Norwich and Peterborough BS used to offer a credit card in their own name, but they were taken over by Yorkshire building society, the card was discontinued and has not been replaced by Yorkshire.
The cards that were closed were:
The old John Lewis credit card which was a joint venture with HSBC. Apparently John Lewis wanted a different supplier for their card so they shut down the HSBC backed card.
The Post Office card which moved to Jaja. Jaja closed many accounts, especially those where the customer was not paying any interest. I was one of those customers not paying interest.
Funnily enough the one card I still have is the one provided by my bank who can see my income and outgoings and have not closed the card account, yet. Fingers crossed the situation remains that way.
0 -
I fulfil that criteria for now, but I just wondered, what would happen if I lost my job or had a period between jobs in the future once I'd been approved for the credit card? Would I have to let the cc company know, and would I lose access to the card/have to close the account?
An interesting question. I have three CC's, two with one institution (my main bank) and one with another. All of these are long standing and although I have never updated the card issuers as my career developed and my income rose, the limits have increased over the years and are currently £10K, £10K and £5K. I have recently semi-retired and I wonder if any of the limits will be reduced as a result of my reduced income.
0 -
If you have behaved yourself as a customer, by that I mean paying balances off on a regular basis and not having late payment markers then I don;t see that they will do anything with the limits.
However if you get a Know your Customer letter and they ask about your income then you have to answer truthfully.
0
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 355.8K Banking & Borrowing
- 254.9K Reduce Debt & Boost Income
- 456.2K Spending & Discounts
- 248.3K Work, Benefits & Business
- 605.9K Mortgages, Homes & Bills
- 179K Life & Family
- 263.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.7K Read-Only Boards