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I get the sense from other threads that there might be some people here who have some industry knowledge relating to this question, so here goes…
I’ve recently had the opportunity to switch from full-time to part-time employment, which I grabbed at with both hands. I’ve been wanting to do it for a while, but I’d assumed I wouldn’t manage it for another year or so for reasons related to my particular job.
This means that my salary is 60% of what it was a month ago. That won’t affect the affordability of my mortgage or anything like that, but if I add up the credit limits on all my cards it’s now more than my annual income, which I imagine might raise some eyebrows. (In practice I pay them off every month and never owe more than a few thousand pounds total.)
I don’t think I have any obligation to tell any existing lenders about the change, but – is it in my interest to let them know?
I’m particularly keen to maintain good relations with Amex. I don’t intentionally churn their cards, but my view of the “best” reward currency changes from time to time, so on average I get a new Amex card every year or two. I guess my worry is that if my income is much lower on my next application than it was on the last one, then that might raise a flag that I’m in difficulties or even that my last declaration was fraudulent.
For clarity – I always have, and always will fill in applications honestly. If ever Amex (or another lender) asks me what my current income is, I’ll tell them the truth. The question is whether it’s in my interest to tell them pro-actively.
This means that my salary is 60% of what it was a month ago. That won’t affect the affordability of my mortgage or anything like that, but if I add up the credit limits on all my cards it’s now more than my annual income, which I imagine might raise some eyebrows. (In practice I pay them off every month and never owe more than a few thousand pounds total.)
I don’t think I have any obligation to tell any existing lenders about the change, but – is it in my interest to let them know?
When Amex ask, as they regularly do, then update them with the current position.
It’s not unusual for people to have credit limits that exceed their annual income across their card portfolio. I’m on around 1.2x income on card limits reported to the agencies, with a further 0.8x income on cards that the lenders choose not to report to agencies. It’s not the limit that’s important, it’s the utilisation and the repayment.
Your main bank, if it’s decent, will already have identified that there is a change to your income. I’ve just bought an extra 5 days holiday, so my salary has dropped by around 1/20th last month and for the next 4 months. On the May pay date, the bank app did the “It’s Payday, you’ve received £xxx less than normal this month”.
(You might want to check on your home and car insurance though now you’re a part timer.)
I don’t think you have an obligation to tell them, unless they ask.
Consider doing a forecast spend for 2024 and review what your credit limit needs are.
Lower spend is less income for them, so you’ve become a less attractive customer, but enjoy the extra time.
Ironically I expect to spend more, not less, because I have time to go on holidays now… but I take the point in general.
It wouldn’t affect me in the least if they reduced my credit limits. I’ve always just accepted the orthodoxy that low credit utilisation looked good, and accepted limits that are much higher than I needed.
I’d be sad if they took a card away altogether, because I like having the choice of which benefit to receive, but I don’t see anything that would motivate them to do that.
This is the problem with eligibility based on income. Just as R76 says, retirement will mean I spend more on credit cards, for the next few years at least.
What do the AMEX (and your other card providers) T&Cs say are your obligations about telling them of a significant change in your circumstances?
A 40% reduction in salary would certainly be a significant change.
It wouldn’t affect me in the least if they reduced my credit limits.
You can reduce the credit limit yourself in the Amex app or on the website.
What do the AMEX (and your other card providers) T&Cs say are your obligations about telling them of a significant change in your circumstances?.
Nothing at all, as far as I can see. I also did some Googling before asking here and the universal view is that you don’t need to tell them unless they ask (and even then you don’t have to answer, though in the case of a credit card of course they could then just decide they don’t want your business any more).
On the whole, I think maybe I’m worrying about nothing. There’s been so much chat recently about CIFAS markers and people having their accounts closed and so on, I was visualising all kinds of trouble if I put down a lower amount on some future application. But thinking about it more rationally, the natural thing for them to assume is exactly what’s happened – that I’ve just taken a pay cut for some reason.
When Amex ask, as they regularly do, then update them with the current position.
Oddly, I don’t remember them ever asking me. But as I mentioned I’ve generally taken out a new card every year or two, and of course they ask me then – so perhaps that resets the clock? Or maybe they did ask and I’ve just forgotten.
Thanks for the reassurance that my position now isn’t as unusual as I thought it was, and particularly the pointer to check my insurances. I hadn’t thought to do that… I will take a look right now!
This seems like an awful lot of worrying over nothing…you were truthful when you applied that’s the main thing. IF they ask you to update your circumstances in the future then you will be truthful again. In the meantime just carry on as normal. Ive been with Amex for 24 years and have never been asked to update my circumstances…I obviously do naturally when I apply for a new card periodically otherwise it’s bau
When Amex ask, as they regularly do, then update them with the current position.
Your main bank, if it’s decent, will already have identified that there is a change to your income. I’ve just bought an extra 5 days holiday, so my salary has dropped by around 1/20th last month and for the next 4 months. On the May pay date, the bank app did the “It’s Payday, you’ve received £xxx less than normal this month”.
Oddly, I don’t remember them ever asking me. But as I mentioned I’ve generally taken out a new card every year or two, and of course they ask me then – so perhaps that resets the clock? Or maybe they did ask and I’ve just forgotten.
Amex asked a lot of people, including me, to update their circumstances at the end of March / early April this year, as posted on this forum and others.
I’ve never heard of Amex asking anyone out of the blue before, let alone “regularly”, on such a wide scale as happened 2 months ago.
Of course if an individual wanted more credit (on an existing card) or suddenly started spending a lot more than they used to, that might prompt Amex to ask. I did also get asked the last time I downgraded BAPP to normal BA on the phone.
I was going to say, how would you actually tell Amex, but I’ve noticed that on the Amex website there is now a place where you can update your employment status and income, which wasn’t there last year (I can’t find such options on the app) – Amex may have added that section during their April exercise.
Also this prompted me to check other banks and I see the Lloyds app has a place where you can tell them your latest employment status/income. Barclaycard has it on the website but not the app. Interestingly, on my Hilton card account it says “Employer: please update” and something along the lines of “Salary: £34325.35”, which is not a figure I would have ever given as the last digits have always been 00.00 on my applications.
I was visualising all kinds of trouble if I put down a lower amount on some future application.
This ^ is a real impact that may be noticeable, but not in terms of jeopardizing existing cards.
When applying for a new amex, it appears they are declining applications recently where people have (either accurately or accidentally) specified a lower income than the last application. No big deal, but worth being aware of.
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