Loan applications that let you state your own income, such as most credit card loans, are often called liar's loans, because an applicant can easily inflate his income. It can prove tempting to to lie on a credit card application, but doing so is committing fraud and could hurt you down the line.
Whether a credit card company verifies your income depends on your occupation and how much you claim to make, according to Loan Safe. Most credit card companies, however, do not verify income. If a company questions your stated income, it will ask for your tax return from the previous two years and/or a pay stub. Your income determines the size of your credit limit. The actual approval process depends mostly on your credit score.
The self-employed have a much harder time getting credit cards than anyone else and are more likely to be subject to verification, because they lack a steady paycheck in most cases. In addition to providing a tax return, self-employed individuals might have to furnish invoices from past clients and a statement from them declaring that the applicant is a trustworthy person.
If sometime down the line the credit card company gets wind that you lied on your application, it could revoke your account and demand immediate repayment of the balance. You could go to jail because lying on a credit application is a criminal offence. You probably won't go to jail, because credit card companies would rather you work and pay off the loan, according to Loan.com.
If you end up in bankruptcy court, credit card companies could use an inflated income as a sign of fraud and prevent you from discharging the debt -- meaning that you still would owe the debt despite bankruptcy, according to Columbia University.
Avoid lying about income on your credit card application. You do not need a full-time job to estimate your income for the year. Credit card companies ask for the expected income statement on your tax return for the upcoming year, according to Money Under 30. Another benefit of stating your real income is that you receive a manageable line of credit. Maxing out a card you should not have means you may not be able to make the minimum payment.