The #1 mistake you’re making on your credit card application


It can be painful to have your credit card application rejected. Besides losing out on any rewards and benefits that you had hoped for, being denied a credit card can feel like your entire financial history has been judged and found inadequate.

Read more: 7 times you should never use your credit card

This is the biggest mistake credit card applicants are making

And while some applicants simply lack the credit history necessary to be approved for a particular card, others make a common mistake that results in their application being rejected. Simply put, most credit card applicants fail to report all of their eligible income.

Income sources when applying

When asked to list their income on a credit card application, many will count only their salary from full-time employment and omit other valid sources of income. For example, you can also include the income you earn from part-time work or from a small business or freelancing practice that you operated on the side.

In addition, most credit card issuers will allow you to include spousal and parental benefits such as alimony and child support. Applicants are also free to include income received from government payments such as Social Security benefits for retirement or disability. In fact, you can even include any income that you receive from your own investments such as your 401K or other retirement savings accounts.

Using someone else’s income

In addition to counting all of your personal income from various sources, you can also include your household income on credit card applications, provided that you have a reasonable expectation of access to it. The CARD Act of 2009 was actually amended for this specific purpose after it was found that non-working spouses had been unable to qualify for a credit card in their own name.

Furthermore, household income can even extend beyond your spouse to include other family members, such as those in multigenerational households. For example, someone who lives with an adult child or with their parents or grandparents could also include any income used by the household. And as with your own income, you can count all of the sources of income from each member of your household, so long as you have a reasonable expectation of access to this income to pay for your credit card bills.

Net versus gross income

Another reason some people underreport their income on credit card applications is that they use their net income instead of their gross income. Your gross income is total amount of salary or wages that you are paid by your employer before any deductions for benefits, taxes or retirement savings. And as any first-time wage earner quickly realizes, the difference between your gross income and what you actually receive in your regular paycheck can be dramatic.

Putting it all together

Even if you don’t intend to carry a balance (and it’s a best practice not to), a credit card application is essentially a request for a loan. Thankfully, credit card issuers and government rules allow applicants to use their total gross income from many sources, including other household members. By taking the time to add up all of these potential sources of income, and including the total on your credit card applications, you can avoid this common mistake and increase the chances of being approved for your next card.

Of course, it’s in your best interest to apply for a credit card that you can afford to have in your wallet and fits your spending habits. And, no matter what card you choose (or your income), you’ll want to check your credit before applying since you’ll still need a good credit score to qualify for the best terms and conditions. (You can view two of your scores, updated every 14 days, for free on


Read more: 1 in 5 customers are carrying the wrong credit card: Here’s how to choose a better one

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