Updated
Sep 23, 2020 If you’ve ever completed a credit card application, you might have asked yourself several questions about including spousal income on the application. Is it illegal? Why would it help? Can it hurt? Let’s discuss those questions.
Why Would You Want to Include Your Spouse’s Income on a Credit Card Application?
If you’re a stay-at-home spouse, make marginal income, or your partner makes more money than you do, it might be enticing to include a spouse’s income on a credit card application. Credit card approval decisions are based on more than your credit history; card companies also care about whether you have the income necessary to pay the credit bill each month. Companies want to limit their risk this way, but they also want to make sure that they give higher credit limits to people with higher incomes.
In theory, you could potentially increase your chances of a successful application by simply accounting for your spouse’s income. Furthermore, it’s possible to get a higher credit limit on your card which may be necessary for your budget.
Is It Possible to Include Your Spouse’s Income?
It’s not only possible, it’s legal and understood. If you know your spouse’s income, you simply add it to your own and put that amount down as your household income. Even if the application specifically says that you must use your “individual income,” the law says you can incorporate several other sources of income besides your own. It is up to the creditor to validate the “total sum of all income stated by the applicant” for reliability according to the FDIC.
Additionally, according to the Credit Card Act of 2009 and its 2013 amendment, applicants 21 and older can put down any income that they have a “reasonable expectation of access” to. That means, if you are over 21, live with someone and have joint finances—or can access his or her money if necessary—then you can count his or her income on the credit card application. The Act was designed to help stay-at-home parents or those who have low and/or marginal income still apply for credit, by taking into account other sources of income.
Should You Do It?
While there are no criminal penalties for adding your spouse’s income to a credit card you’re applying for in your own name, there are sometimes drawbacks.
One of the most common is when one spouse applies for a credit card partially based upon the other spouse’s income—and then they get a divorce. If by chance, the applicant spouse is left with a high credit card balance that’s disproportionate to his or her income, there could be negative consequences for his or her own credit history and finances overall.
For most married couples, applying for credit while including the other spouse’s income doesn’t cause any ill effects as long as they stay married and handle the credit responsibly by paying the balance off each month. For others, however, it can cause significant marital issues if one spouse overspends, or doesn’t make the payments on the card.
In all cases, it’s probably best to talk to your spouse before applying for credit using his or her income. You can’t get in trouble with the law for using his or her income…but you might get in trouble with them.