Why Do Credit Cards Ask for Annual Household Income?

Why Do Credit Cards Ask for Annual Household Income?
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Credit card issuers are in business to make money. To do this, they have to ensure they only give cards to applicants who will pay for the purchases they make with the card. Creditors use household income as one measure of a creditor's ability to repay any credit card loan.

Household Income

Your annual household income is the total amount of income that all members of your household take in each year. However, this generally does not include people who are not part of your marital family, such as your parents or your spouse's parents, nor does it include renters or boarders, according to the Minnesota Department of Revenue.


Credit card applications include a variety of questions aimed at determining whether the applicant would make a reliable debtor. Along with your annual household income, the credit card issuer also wants to know about your history as a credit user. This information is contained on your credit report, and along with your combined household income is often used to not only determine if you get the card but also what credit limit the card company gives you, according to Credit Karma.

Joint Applications

If you are married, you still need to include the combined household income of you and your spouse even if you don't sign up for a joint credit card. Though your spouse may not be on the card application, it is quite common for a spouse to add the other spouse as an authorized user, meaning your spouse will be able to use the card regardless of whether he applied for the account.

Income Types

Combined household income includes income from variety of sources. Apart from you and your spouse's salary, other sources of income may include welfare benefits, emergency assistance payments, income from rental properties or other assets, military housing allowances or non-taxed income.