A majority of credit card companies want to know the income of their consumers. So they make you fill out your income when you do an application for a new credit card. But you as the consumer would probably like to know why the credit card company wants to know how much money you are making.
There is a clear need for the credit card companies to know that you will be able to pay for the balance you accumulate on your credit card. Your income level is one of many determinants of your ability to pay your credit card debts. The credit card company must know that their card holders are able to pay back the debts because otherwise they will have a difficult time getting that money paid back.
The income level is one of the biggest factors in deciding whether or not you are qualified to get a credit card. It also determines what kind of card you will be able to qualify for and what your spending limits are. Your income will determine the highest balance you are allowed to have on your credit card. Your maximum credit limit isn’t determined solely by your income level, but this is the biggest factor that credit card companies will use to set your limit.
Your credit score is the other major determinant of your credit card limits. If you have a large income but no established credit history, you will not have a very large credit card limit, until you begin to build up a positive credit score. Also, the card company will look at your past history with using and paying for a credit card. If your credit card history and credit ratings are both positive, then both of these factors should increase your credit card limits.
Credit card companies will want the most recent income data possible, in order to make sure that the data is as accurate as possible. Credit card companies want to know that your income is regular and stable, and not the byproduct of a windfall or sheer luck. It has become rarer for credit card companies to analyse your employer or job security as part of the qualification process, but it does happen.
Many cards are very exclusive, with exorbitantly high income requirements to make them available only to a small number of consumers. These cards are most commonly called Platinum, Gold, or Prestige cards. These cards are the most difficult to qualify for, but not impossible with a high income and positive credit card history.
The credit card companies may use income estimation software to calculate an estimate of your income. Australian card companies may be beginning to take advantage of this new software soon.
