What Happens if I Lie About My Income on My Credit Card Application?

by Craig Berman
Obtaining credit cards by falsifying your income can lead to headaches down the road.

Lying on a credit card application isn’t just unethical; it can lead to serious practical and legal consequences. A company that discovers you’re not being honest likely will deny your application if it's pending, or reduce your credit limit or cancel the card if you’ve already been approved. The issuer also can use the legal system against those who obtain credit under false pretenses.

Credit You Can't Afford

Banks have income requirements for a reason; that figure, along with your credit history and other factors, is how they determine whether you’ll be able to pay the resulting bills. If you have to falsify your income to get credit, you’re applying for credit you can’t afford. That may seem like a short-term solution to your financial problems, but it will only increase your financial difficulties in the long term if the added debt load is too much for you to handle.

Income Checks

Increasingly, credit card companies are checking to make sure the information on your credit card application is correct. This can take the form of a financial review, where the issuer asks you to confirm your income with documentation such as tax returns for the past two years. If you can’t provide that information, your credit line could be decreased or canceled.

Criminal Prosecution

Federal law makes it a crime to submit false financial information to banks. Penalties range up to 30 years in prison and $1 million in fines for each instance of knowingly falsifying statements as part of a loan or credit application to a federally insured bank. While it’s rare, banks have been know to prosecute those who knowingly falsify their income on a credit application. This might come to their attention if you have to declare bankruptcy, for example, and the bank is faced with having to write off thousands of dollars in debt.

No Discharge

Falsifying your income also makes it less likely that you’ll be able to wipe away your debts in bankruptcy if you’re unable to pay your bills. Creditors can stop a discharge by alleging the card was obtained using fraudulent information or that it was used fraudulently. Declaring bankruptcy, particularly if your credit card debts are large and occurred close to your filing date, may inspire the issuer to take a closer look at your financial situation to see if you lied on your application.

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