In Feb of 2007, my wife and father started a small business and I decided to help them. Obviously they needed capital for the business..THis is where I helped them out. I bought a lot of inventory needed for the small business using my personal credit card. Not once was I late or strayed over my credit limit. They would pay me back in time and I in turn paid the credit card company. All of a sudden I recieve a call in the week of Christmas demanding my tax returns. I said I cannot do that without talking to my accountant who was away on vacation. This resulted int he CC company canceling my account and sending me a letter stating that it could result in derogatory comment on my credit history??? What wrong did I do? I never exceeded my spending limit and only trying to help my Father and Wife start s small business to support the ever growing expenses we had thanks to a slowing economy and Father and Mother moving in with me. What should I do? I have cleared all dues etc but can they harm me for no fault of mine? Please help?
I'm not sure I understand this problem completely...what CC company is this, if you don't mind? What puzzles me is the demand for tax returns; I cannot see why this request would be made. The only thought I have is that the CC company thought you were possibly trying to run up a "business debt" that you would default on. But since you paid on time, and never went over your limit, it is puzzling. What was the nature of the inventory you were purchasing? How much were your purchases (monthly)? A few more details may help shed light on this.
Agree with Biz. Now to my "take". Did you send in ypur personal checks when you made the cc payments or were your wife/father making the payments from a business checking account? If business checks were sent they, the cc probably is assuming that you are the business owner, and might want to increase your limit. Was the cc American Express?
Thanks to both of you for responding. The CC company is American Express. !-I dont know why they demanded tax returns. 2-The company belongs to my Father and my Wife. 3- I bought inventory on my credit card, most retail jewelry and they paid me back and I paid the CC company back. 4- Average purchases were around 30K a month for about 4 months and around 15K a month for the rest. 5- I never defaulted and once I was told my card was canceled, I paid off 35K oft he 45K i owed them. They told me they were not looking for immediate payment just monthly due but still I saw no point in keeping the balance especially since now my Father and Wife are off and running 6-My wife had to return inventory to help make the payment. She returned some of the goods and took a hit. The company then credit some amount back to the Card. When I spoke with them they never told me this would affect me badly....they just said card would be canceled. Now the letter states :This MAY be reported as a derogatory account. What I am confused with is I was never late, I dont owe them anything, never went over my credit limit. What wrong have I done for them to put a neg comment on my history? What should I do? I did not feel comfortable giving them access to my tax returns without talking to my accountant.
It's called a financial review and AMEX does it quite frequently. They don't typically want your tax returns rather a 1044T (I think) to verify your income compared to what you put on the application. So long as you were truthful, you really have nothing to worry about. Personally, I think it's rather intrusive. However, you must supply the information of they will close the account. It won't hurt your scores insofar as the notation "closed by grantor" isn't factored in.
AMEX is known for doing what is called FRs, or financial reviews. If they feel that your spending is too much for your income, they ask for financial statements. The negative information will probably be "account closed by credit grantor." On a manual review it won't hurt you too much. This is one of the problems with AMEX accounts.
So it shouldn't reduce my credit score right? My accountant feels strongly about this and says they have no reason to ask for my financial documents. I also feel that since the tax returns from last year wont reflect the business information that my wife started in 2007 so what do they want I am really frustrated with this....Here we are trying to try our best to help my parents who have fallen on bad times and what good is my credit or anything else if I cannot help my dad out of a jam....What wrong have I done? Thanks for your kind words.. it really does help
