Denial of banking services, FATCA?

For the first time in my life I have been turned down for a credit card.

Nothing in my circumstances has changed, except that this time the application form asked for my place of birth, nationalities, and all countries where I pay tax. I was honest and answered UK, UK&US, UK&US. The bank has not given me a reason. I have a perfect credit history and salaried full time job.

Is this likely to be a consequence of FATCA?

Yikes, I have not heard thus far of people getting turned down for credit applications thanks to FATCA. But in this situation, it certainly seems suspicious that you were denied.

Let's hope this does not continue to be a trend as that could certainly cause even more problems for Americans living abroad!

The standard answer in the UK is to check with all 3 credit reference agencies because many of us believe we have perfect credit until we check and find something of interest. All can be checked for free. See: http://www.moneysavingexpert.com/credit-cards/credit-reference

Thanks guya.

I would like to check, but must be patient. Experian has a 30 day free trial, but once you sign up you must wait five working days to be sent a pin. Is there any way to find the information more quickly? I guess that once your 30 day trial is ended it will not be free to do a check at a later date.

UPDATE: I used Noodle, which is free and gives instant access. It told me my rating is 5 and that I qualified for the card that I wanted. Makes me more suspicious that this is FATCA at work. I am trying to get a cashback card. I wonder if that is problematic because the (small) annual cashback income would be reportable on a 1040.

I am trying to get a cashback card. I wonder if that is problematic because the (small) annual cashback income would be reportable on a 1040.

Credit card rewards (including cashback) should not be taxable or reportable as income. Cashback would be considered a discount/rebate on the purchase price of goods or services, in the same way as if you receive a percentage discount voucher from a shop.

politicfool: that is good to know about credit card rewards and cashbacks. I would hate to think that this was one more thing that I would have to track for my US tax return.

I wrote to the bank complaining about not being offered a credit card, saying that I had never been refused one before. I mentioned my understanding that discrimination on grounds of nationality is counter to the UK Equality Act 2010 and the EU Lisbon Treaty.

Today I received a letter saying my card application is now approved. It is hard to tell whether or not the original refusal had anything to do with my being a "FATCA-affected" person. Seeing as the bank changed its mind, perhaps it did not.

Credit card rewards (including cashback) should not be taxable or reportable as income. Cashback would be considered a discount/rebate on the purchase price of goods or services, in the same way as if you receive a percentage discount voucher from a shop.

But the act of crediting cashback might put a card a few pennies or pounds in credit, making the card an FBAR reportable foreign account. 

guya. Interestingly to your point, I have had this response to a question I asked about a positive credit balance on a credit card or utility account.

Subject: RE: Are these financial account for FBAR?

Date: Wed, 18 Jun 2014 12:08:00 +0000
From: *SBSE FBAR Form <FBARQUESTIONS@irs.gov>
To: ............

Good morning,
Credit cards and utility accounts are not reportable for FBAR purposes.

L....... J...........
Tax Law Specialist
BSA Department
(313) 234-2278 (Fax)

But the act of crediting cashback might put a card a few pennies or pounds in credit, making the card an FBAR reportable foreign account. 

The only accounts that are FBAR reportable are financial accounts which in layman's terms means an account designed to hold financial assets. Credit cards are fundamentally loans and the fact that the lender may at some point owe the borrower money does not change the nature of the account. Are you advising your clients to report such accounts? If so, did you seek confirmation from the Treasury before providing this advice?

I am also awaiting an account opening with a bank. I had to state my US ties etc, and as far as I'm aware they may refuse to open it at their own discretion.

There is little you can do aside from mailing your congress representative and giving a testimonial to ACA, americansabroad.org/issues/taxation/share-your-banking-or-tax-story/