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what's up you guys sasha here and in this video i'm going to talk about what income should you be putting down on your credit card application now this question sounds simple enough but there's a lot of things that people just don't really know about that i wanted to cover for example should you be putting all the different forms of income that you have or just your main salary does overtime and bonus count what is the credit card company looking for will they decline you if you put certain things down or not we're going to have all these in this video including the bit about what happens when you lie on your application about your income let's roll [Music] first before we get into some of the details it's important to note that different credit card companies and different comparison websites will ask this question in a different way so you need to make sure that you read the question extremely carefully it is so easy to make a mistake and if you make a mistake on this question you can get the client for the application you won't know why you've been declined but you might be declined because you put just the wrong thing down because you didn't read the question carefully enough now there's two big differences on how this question is phrased one is some people will ask you for a monthly salary and other people will ask you for an annual salary and the second bit is some people will ask you for your net salary and some people will ask for the gross salary now usually they will not ask you for your annual net salary so the three different options are annual gross salary monthly gross and monthly net now gross basically means pre-tax so whatever your official take-home pay before you pay anything out is and your net is net after paying tax and any other costs for example pension contributions now the sounds simple enough but a lot of people make a mistake on this question in the application form and many credit card companies are just not that good of highlighting it some will have some technology built in which will highlight if you put the wrong number so if the number is way too high or way too low they'll highlight the field and they'll say hey are you sure are you sure that this is what you're earning per month that you've put down 25 000 pounds or whatever it is but in many cases they won't do that in many cases you just won't know you'll get a decline message at the end of the application form and they'll just give you some generic reason like you didn't meet our minimum criteria be extra careful with some of the other parts of the application form that also talk about money specifically the bits that talk about your expenses many times a credit card company will ask for your salary in a different format so they might ask for your annual salary but they will ask for your monthly expenses for things like child care food any other questions they might be asking so just double check on both of those questions now the first top tip for what you should be putting down in terms of which particular types of income you should be including in this field the quick tip is include everything make sure you include your basic income your regular salary make sure you include any overtime you get paid make sure you include any bonus that you regularly get paid also make sure you smash the like button for the youtube algorithm because it is incredibly helpful make sure you go and do it right now thank you very much i hope i got you there did i get you on this one i really hope i did get you on this one okay anyway let's move on make sure you include any different kind of income that you genuinely expect to be paid every single month now the credit card company does not care what your employment contract states your bare minimum basic salary is they're not interested in that they will never ever request to see a copy of your employment contract what they're interested in is how much money are you genuinely earning in order to make their affordability calculation that's all they care about how it's divided up is kind of up to you if it's called salary if it's called overtime if it's called bonus if it's called drug dealing money okay maybe they'll care about that last one but generally speaking it doesn't really matter if you're earning money from more than one place you don't have to pick one you don't have to pick the higher of the two or whichever your main job is you are free to put both of them down because different people earn money in different ways some people who are self-employed or get paid irregularly will have very different ways that the money lands into their account and the credit card company doesn't want to get into the details they're just making their assessment as to how much you can afford to borrow because they are legally obliged to do so if you're earning any kind of money from a side hustle that regularly every single month pays money into your bank account and that amount is somewhat stable you should add that too because that is just like another form of income and the thing that people really get worried about is what if the credit card company then tries to verify this income so let's say your numbers vary month to month or let's say you're earning some bits in one place and other bits in a different place and some of them give you payslips but others maybe don't or maybe some of it is cash in hand work and you do pay taxes on it but you don't really have much paperwork associated the reassuring thing here is in the vast majority of cases the credit card company will not want to verify your income and the reason for it is twofold first there are two ways in which they can verify your income one way is by doing the old-school paperwork and some of the old high street banks still do this they'll either ask you to bring in or mail in some form of verification of the amount that you earn so i'll ask for things like pay slips or bank statements or some other evidence that the amount of money is coming into your bank account in some case they'll ask you to take it to the post office have somebody counter sign it that is an incredibly bad customer journey a lot of people especially the better quality people when they get asked to do this they just don't bother they go and get the other credit card from a different provider who don't ask them to do this so this practice is dying out incredibly fast more and more banks are stopping doing this because it's just a really bad idea you're generally going to get a lot of people dropping out at this point in the application journey so they are stopping doing this in favor of other ways of doing the verification the other way to verify the income is doing it electronically as part of the actual customer journey so in the app they ask you to go and take a picture of some of the evidence but again the same thing applies a lot of people just won't want to do it they don't have the documents to hand and go and look for them so if they're right there filling in the application form you're going to lose them as a credit card company so this also is quite uncommon but the fca which is the regulator for the credit card industry keeps telling their credit card companies that they need to take much greater care with doing affordability assessments when they're lending money to people so what this means is the credit card companies are in a bit of a quandary they have to satisfy themselves in the fca that they're doing what is required in order to do this verification but on the other hand they want to make sure that the application process is as quick as minimalist and as streamlined as possible so that as many customers are able to complete the journey as possible so what this means is they generally do two different things as part of that process number one is they go and try to model how much your income is likely to be or at least how much they think it might be based on number of criteria if it is a bank and you have a bank account they can use the current account data in order to make some of those calculations if they are not or if you don't bank with the same company that you're applying for a credit card with they have a bunch of other information so they have things like your bureau data on the basis of which they can assume roughly how much debt you have and on the basis of that they can roughly assume how much you might be earning for those people to have lent you that much money they're able to use other things like your postcode and your job if the application form asks for it to try to determine roughly how much your kind of profession would be earning in your kind of part of the uk so a combination of those things really helps now the other bit of information that credit card companies have access to is the income that you've provided in your previous applications and what they do here is they go to the credit reference agency and some other data providers in some cases and they can go and take a look at what you've put on previous applications now this data is not complete and because not every credit card company works with every credit reference agency it means that sometimes the number that they're looking at is not from your last application or even one before that it may be from some applications ago what this means is that consistency is key every time you go and fill out an application make sure you calculate your income in the exact same way if last time you added your salary your overtime and your bonus make sure that this time you do exactly the same thing because if the number you provide today is too high or too low versus what they think you're earning you could get declined in most of these cases if you're within something like 15 to 25 percent of the number that they think you're earning you're probably going to be okay but if the number is way different if it's way higher or way lower you might get declined and you won't even know that that was the reason why you did get declined consistently does apply as your salary and general income growth so if you begin earning more if you get a higher paid job you get a promotion if you begin earning some money from a side hustle that you didn't earn before as that income figure grows over time that data in the bureaus and wherever else that they go and verify it will also be adjusted so as long as there's consistency in how that salary grows over time you should be okay in some cases if the number is way out of the range they might go and run through a manual process or they'll request some kind of verification that your income is what it is because it is so different and in that case you might have to follow that route let's say you scored a massive promotion and you're earning way more than you used to or something else like that in that case great good for you you're earning a lot more money it may mean that on your credit card application you might follow through a few manual steps just to get verified the last thing about consistency is to make sure you subscribe to this channel make sure you hit that subscribe button hit the bell so you get notifications so that you can watch every single one of my videos consistently three times a week now let's get to the question a lot of people will be asking themselves and that is what happens if you lie on the credit card application form now they might not ask it out loud they might not go and google it what if i put a number down that is just a bit higher than what i'm actually earning what if i just inflate it a little bit to make sure that i increase my chances of being accepted or so that the credit limit i get awarded might be that much higher now the first thing is it's generally a really bad idea for the fact that you are basically committing fraud it might be very low scale fraud it might be a sort of white lie in your eyes it might be well it doesn't really matter it's just a credit card application form but you are committing fraud you're providing knowingly incorrect information in order to be able to get some form of lending they are making some sophisticated risk decisions they're trying to decide should they lend money to you or not based on this information you're providing and i don't know about you i generally don't like getting into the fraud game i don't really want to ever get anywhere near that so if i was to advise you what to do i would say don't do it don't go and lie knowingly don't go and inflate the number you're actually earning now the truth is in many cases the credit card company just won't be able to tell if your numbers increase slightly from what you supplied before they will probably pass you because it won't be too different and if you keep doing that and creeping up maybe the bureaus will be able to keep up and take note but the problem is going to be that you're going to be on a perpetual treadmill of trying to keep up that pretend salary that you've made up every single time you go through any similar process so let's say at some point in the future you go and buy a new house and you're going for a mortgage application all you need to remortgage and the mortgage company wants actual pay slips they want actual bank statements and they go and look at them now if they go and look at all of that information and they see that your actual salary is much less than what you've been providing you might get declined for that mortgage just because of that even if your salary that you actually are earning is sufficient for you to buy that house and you don't really want to get into that i'm not even talking about the potential financial ramifications if it ever transpired that you genuinely lied on an application form and you then have any issues of repaying the debt if this ever does surface the credit card company will have a lot more resource to be able to repossess property to be able to get more money off you in various different ways if it can be easily shown that you lied on your application form the other thing is if you're keeping this pretence up you always have to be remembering how much did you lie the last time and the time before that and time before that to make sure your story makes some sort of consistent sense and that is just generally quite difficult you will forget exactly how much you inflated the salary last time and you'll inflate it too much or too little and therefore you will fall foul of these rules generally speaking it's just a bad idea don't do it add the genuine income that you are getting put it down in the application form and that is the correct thing to do i hope you guys found this useful if you haven't done so already make sure you hit that like button and subscribe and i'll see you guys in the next video you