Question: Can you enter household income where it says annual income on a credit card application?

Answer: Yes, as long as you apply before October 1, 2011. Thanks (or maybe no thanks) to the rules instituted by the Credit CARD Act of 2009, when you apply for a credit card, the card issuer is required to ask for your individual income, not the household income.

Why? Because sometimes the household income doesn't really tell the full story of whether a consumer is taking on too much debt or not. For instance, credit card issuers some time ago began asking applicants under the age of 21 what their individual income was since, for all they knew, the household income referred to the young applicant's well-heeled parents who had no intention of paying for junior's credit card.

But currently, many credit card applications--at least the half dozen or so that I just checked, still ask for total or annual household incomes. Meanwhile, the term "annual income" is vague enough that I don't see how any issuer could hold it against you if you put the household income and they wanted something different.

Now if a credit card issuer asks you specifically for your individual annual income, then clearly you should put what you yourself earn and not what, say, you and your spouse and your five kids earn. I'm not suggesting anyone lie on their application.

Quite the contrary. There has been a fair measure of criticism of the act for the doing away of the household income question because it can hurt the chances of some people getting credit, like a divorced wife who needs a credit card to help her get back on her feet.

Still, as someone who has personally been buried in credit card debt, it's hard for me to argue with the spirit of what the law is trying to do: keep people from borrowing more than they can pay back. I think that's a very worthy goal. Being trapped under a mountain of revolving debt can be just as stressful as a divorce.

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