Stay-At-Home Mom Fights New Credit Card Rule

[merithyn]

Interesting article. I'm not sure how I feel about this. On one hand, if all credit cards have to be in the working parent's name, the SAHP won't be able to build good credit on their own, which can and will cause problems for both of them down the line. Plus, it will be a serious issue for the SAHP if s/he ends up divorced. On the other hand, I can understand the serious problems that arise from allowing a non-earning spouse excess credit based on the earning spouse's income. They are, or should be, a team, which means that they should both be aware of the financial picture they're in.

By the way, the comments at the end of the article are hilarious!

Stay-At-Home Mom Fights New Credit Card Rule

By CNNMoney
Posted 2:55PM 05/16/12
By Blake Ellis

After nearly five years managing her family's finances, Holly McCall, a 34-year old stay-at-home mother of two from Vienna, Va., never thought she would have trouble getting a credit card.

She makes the majority of family purchases, has an excellent credit score and has been approved for several cards in the past. But when McCall applied for a Target (TGT) card last fall, she was denied.

She blames that denial on a recent Card Act rule.

The law was passed in 2009 to protect consumers from unfair and deceptive credit card practices. But some stay-at-home parents argue that a Card Act rule that took effect last October has made it harder for them to get approved for credit cards. Aiming to protect consumers from racking up too much debt, the Federal Reserve now requires credit card issuers to consider individual income from applicants instead of household income.

As a result, stay-at-home parents who rely mainly on their spouse's income have a harder time getting approved for credit cards on their own.

"I think it's demeaning -- I don't want to ask my husband's permission for a credit card," McCall said. "Just because I don't get a direct paycheck for [my work], doesn't mean it's not worthwhile work that I'm doing."

Outraged by the new requirements, McCall created an online petition at Change.org a couple weeks ago and has already received more than 30,000 signatures -- many of which are from other stay-at-home mothers and fathers.

"I used to be CEO of a small software consulting business and am now staying at home to take care of a toddler and first grader. If you had to pay someone to do what I do now, it would cost you at least $120,000, which is a lot less than what I used to earn," one stay-at-home mom wrote on the online petition. "BTW, it's a 24x7, not a 40 hour per week job. Don't you think I should be allowed to get a credit card on my own?!"

On Tuesday, McCall said she and about half a dozen other petitioners delivered the signatures in thick binders to the Consumer Financial Protection Bureau in Washington, D.C.

Some petitioners dressed up as housewives from the 1950s -- complete with A-line skirts, pearls and tightly pulled back hair -- since the rule "feels like a flashback to the 1950s because of the way women aren't empowered financially." One petitioner held a sign in the shape of a credit card with the word "DENIED" stamped on it in red.

McCall said she hopes the petition will push the CFPB to amend the Card Act rule in order to protect the rights of all stay-at-home parents -- both moms and dads alike.

"It's about fair and equal access to credit," said McCall.

The CFPB inherited the Card Act rules from the Federal Reserve last summer, when the bureau was launched.

The agency said it is looking into the issue.

"We recognize that stay-at-home spouses have significant financial responsibilities and play an important role in the U.S. economy," said CFPB spokeswoman Jen Howard.

[Neil]

Too fucking bad.  Get a job, deadbeat.

[Crazy_Ivan80]

use debit cards instead

[Martinus]

Too fucking bad.  Get a job, deadbeat.

This.

[Richard Hakluyt]

Seems strange to me that credit cards will only be issued to those who are so poor that they have to work 

[Tamas]

use debit cards instead

no shit.

[Sheilbh]

Seems strange to me that credit cards will only be issued to those who are so poor that they have to work 

America needs a Coutts clause.

[CountDeMoney]

No income, no credit.  Get over it, lady.

[alfred russel]

She blames that denial on a recent Card Act rule.

The law was passed in 2009 to protect consumers from unfair and deceptive credit card practices. But some stay-at-home parents argue that a Card Act rule that took effect last October has made it harder for them to get approved for credit cards. Aiming to protect consumers from racking up too much debt, the Federal Reserve now requires credit card issuers to consider individual income from applicants instead of household income.

I don't know why she was denied credit, but if it was because of the Card Act and a company otherwise would give her credit, I don't see the compelling state interest in prohibiting it from doing so. It isn't as though stay at home moms racking up credit card debt caused the financial crisis.

[Tamas]

She blames that denial on a recent Card Act rule.

The law was passed in 2009 to protect consumers from unfair and deceptive credit card practices. But some stay-at-home parents argue that a Card Act rule that took effect last October has made it harder for them to get approved for credit cards. Aiming to protect consumers from racking up too much debt, the Federal Reserve now requires credit card issuers to consider individual income from applicants instead of household income.

I don't know why she was denied credit, but if it was because of the Card Act and a company otherwise would give her credit, I don't see the compelling state interest in prohibiting it from doing so. It isn't as though stay at home moms racking up credit card debt caused the financial crisis.

The Government knows your interests better than you do.

[merithyn]

use debit cards instead

The problem with this is that it doesn't build credit history, which is essential anymore in the US. This policy puts stay-at-home parents in a position where if the marriage collapses, they're screwed. I don't really care about whether or not they should get credit without a paying job, but so long as the system is so skewed toward a credit history, it's an issue.

Plus, I'm more than tired of the damn government making laws to protect people from themselves. 

[Eddie Teach]

use debit cards instead

Or get her husband to sign off on her credit card. If that's too "demeaning" she should make some other arrangements for child care and get her own money.

[Richard Hakluyt]

use debit cards instead

Or get her husband to sign off on her credit card. If that's too "demeaning" she should make some other arrangements for child care and get her own money.

I think that makes sense. If the economic unit is the household, then getting the working spouse to sign seems reasonable. Conversely if the economic unit is the individual then get a job.

[Neil]

use debit cards instead

The problem with this is that it doesn't build credit history, which is essential anymore in the US. This policy puts stay-at-home parents in a position where if the marriage collapses, they're screwed. I don't really care about whether or not they should get credit without a paying job, but so long as the system is so skewed toward a credit history, it's an issue.

Plus, I'm more than tired of the damn government making laws to protect people from themselves. 

Her husband can cosign for her.  After all, he's the one who will be paying the bills.

Besides, stay-at-home moms are the ones who go whining for government help when their marriages collapse.

[Neil]

The Government knows your interests better than you do.

Indeed.  Their ability for long term thinking is superior to that of the average person.