A credit card business will look at your annual income to decide if they will give you a card and how much credit they will give you. The applicant’s annual income may also help the credit card company figure out how much the minimum monthly payment will be. Still, it’s up to you to make sure you have enough money each month to pay off your credit card bill, and you can start by knowing how much you make each year. Not only is it in your best interest to report it properly, but it’s also the rule.
How is gross income different from net income?
On a credit card application, you will need to list your “gross income,” which is your annual pay before taxes and other charges. When all of these things are taken out of your pay, the amount left is your “net income.”
How to figure out your yearly gross income
If you get paid a pay every year, you can use that as your gross income. You can also look at your most recent tax report, which should have a number for your gross yearly pay. If not, you might need to add up all the ways you make money.
You need to increase your hourly wage by the number of hours you work each day.
For example, if you make $15 an hour and work eight hours a day, you would make $120 a day. If you work five days a week, then you multiply by five. So far, it would look like this:
$15/hr × 8 hr/day × 5 day/wk = $600/wk
This is how much you make each week. To figure out the net income for the whole year, multiply that number by 52.
$600/wk × 52 wk/yr = $31,200/yr
You should make sure to include all of your cash.
On a credit card application, what kinds of cash can I list?
It’s important to be honest about your yearly income so that you don’t get a credit limit that’s too high or too low or risk not being able to pay back your amount. Just remember that you have to pay off your entire credit card debt every month.
Money comes from:
- (From your job) Federal taxable wages
- Tips
- Money from self-employment
- The Social Security system
- Disability Income from Social Security (SSDI)
- Income from a salary or retirement plan, such as most IRA and 401k payments.
- Depending on when the divorce or split was completed, alimony may have to be paid.
- Money from investments
- The money from rent and royalties
What will happen if I lie on a credit card application about how much money I make?
If you lie on a credit card application, you are committing fraud, which can lead to bad things. Card companies can find out about bad information when an application is sent in, and they can still check on an account after it has been accepted. No matter when they find out, they can ask you to pay back your amount and tell the police about you. If someone is found guilty of a loan application scam, they could get fined or even go to jail.
Instead of lying about your wealth, think about what else you could do. You can get a card, a protected card, or become an authorized user with the help of a cosigner.
What else does an application for a credit card ask for?
When you apply for a credit card, you may be asked for your:
- Full legal name
- Individual Tax Identification Number or Social Security Number
- Mailing address
- Total income for the year
- Costs of living based on employment
- Number to call
- Birth date
- Homeownership or rental
- Source of most of the money
- if available, the number of the employer.
You may also have to show your driver’s license, passport, recent pay stubs, and tax papers, among other things.
In conclusion
On a credit card application, it’s important to be honest about your yearly income because it helps the credit card company figure out your credit limit and monthly minimum payments. To figure out your gross income, you just need to add up all the money you make in a year. If you lie on the application, it could lead to bad things, so take the time to give the right information or think about other choices.
