Have you been dishonest with your partner about your finances? You’re not alone. Two in five with combined finances admit to lying to their partner or hiding information about money matters, find a study by Harris Poll for the National Endowment for Financial Education (NEFE). In fact, dishonesty among couples is rising – it’s up from 42 percent in 2015 and 33 percent a couple year ago. The most common financial deceptions were hiding a purchase, bank account, statement, bill or cash from your partner (39 percent), followed by lying about the amount of debt (16 percent).
When it comes to men, women and money, men are more likely to deceive their partner than women. 46 percent of men admitted to committing financial deception, while only 38 percent of women are guilty. Financial deception happens at all ages, but it’s more prevalent with the younger generation. 61 percent of young adults age 18 to 34 admit to committing financial deception.
Lying on Credit Applications
People aren’t just deceiving their partner when it comes to financial matters. Many people lie on credit applications. When you’re applying for credit, whether it’s a mortgage, line of credit or credit card, you’re asked to provide among other things your annual income. Some premium credit cards require an annual income above a certain threshold to qualify. Inflating your income on a credit card application in hopes of getting approved for a premium card or more credit may be tempting, but it’s not worth it.
Although lying to your partner about your finances isn’t illegal per se, lying to the bank sure is! Not only is it illegal, it raises the cost for all borrowers. Banks ask you to verify your income for a good reason. They want to know you have the financial capacity to handle the credit they’re extending you. While credit card companies aren’t able to verify 100 percent of the information on an application, large discrepancies in reported income will raise a red flag and could land you in some hot water. You could be blacklisted by banks or worse, be charged with fraud.
Lying to get a Credit Limit Increase
Lying to get a credit limit increase isn’t just bad for your bank, it could hurt your finances. Banks give out credit limits based on what you can reasonably afford to pay back. If you have too much credit at your disposal, it may be tempting to spend more than you can afford. As you spend more on your card, your credit utilization rate rises which hurts your credit score. Unless you can afford to pay off the balance, the cycle will continue, potentially leading to disastrous financial problems.
For some, it’s better to avoid credit limit increases. Even if your bank approves you for a credit limit increase, if you’re already carrying a balance on your credit card, just say no.
The Bottom Line
Many people think financial deception is a victimless crime, when nothing could be further from the truth. Not only can it lead to the end of your relationship, it can hurt your credit score and in extreme cases could even land you in jail. Next time you think about lying about your financials, don’t do it. The risks far outweigh the benefits.
