Question

what does "ANNUAL HOUSEHOLD INCOME" mean in credit card application?

I sent in a application and put my parents income down as well(i currently live at home still)! I since read online that the word "HOUSEHOLD" Mean's the person applying, why didn't they just say so on the form? I mean what purpose was it for them to use a confusing"HOUSEHOLD" instead of "YOUR"? Surely they would know some people would take "household" as meaning "household". why household, if they meant you? It didn't say your's or your's and spouse( it said household)! What is their purpose in the use of the word "HOUSEHOLD" as oppossed to "YOUR or YOUR AND SPOUSE"! Anyways what if a spouse doesnt aggree to sign up, why would they ask for their's, instead of just "YOUR'S"! I mean why the "household" instead of the "your"? I suspect since they are in the 2011 wall-street banking industry(which has almost bankrupted the country),that they have some underhanded reason for this also!

3 years ago - 3 answers

Best Answer

Chosen by Asker

Years ago the Fed realized that many stay at home spouses (mostly women) were harmed, through death or divorce of their spouse, by not having credit in their own names. While the stay at home spouse could receive credit as being joint on their spouses account the Fed realized that the opportunity for the stay at home spouse to gain credit was based on the whim of the working spouse.

Under Regulation Z of the TILA (Truth in Lending Act) household income was originally for the stay at home spouse so that they could use the income of their working spouse to gain credit in their name only and not as a joint account.

Since it was written in very vague terms, at first the creditors also allowed of age children to use their parents income if they lived in the same household as their parent(s). Eventually the creditors ran with it and basically considered the term household income as meaning the income of "anyone" in the household of legal age ..... parents, of age children, siblings, roommates, etc., etc.

Earlier this year the Fed approved a rule to amend Regulation Z so that only the personal income of the applicant can be used. The new law will be in effect by October of this year but some creditors have already been changing the wording on their applications.

While this new rule is good in some respects, by keeping people from putting in the income of anyone and everyone of legal age who lives in the household, it will harm those that the Fed originally intended to help through the old law.

3 years ago

Other Answers

"household" refers to the (combined) income of the person(s) who will use and be responsible for paying the cc bill. If your parents are co-signers, add in their income. But it sounds like you would only list your own income.

Source(s)

by SumDude - 3 years ago

It's simply because the application is much neater when there is a blank that says:

Annual Household Income: $___________________

instead of a blank that says:

Annual income of the applicant; or income joint applicants; or income of the applicant, including income from a second or third job; or income of the joint applicants, including income from a second or third job; or income of the applicant, including alimony and/or child support payments; or income of the joint applicants, including alimony/or child support payments: $___________________

by Monte P - 3 years ago