Interesting article (http://www.dailyfinance.com/2012/05/16/stay-at-home-mom-fights-new-credit-card-rule/). 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!
QuoteStay-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.
Too fucking bad. Get a job, deadbeat.
use debit cards instead
Seems strange to me that credit cards will only be issued to those who are so poor that they have to work :hmm:
Quote from: Richard Hakluyt on May 20, 2012, 04:24:59 AM
Seems strange to me that credit cards will only be issued to those who are so poor that they have to work :hmm:
America needs a Coutts clause.
No income, no credit. Get over it, lady.
QuoteShe 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.
Quote from: alfred russel on May 20, 2012, 09:38:09 AM
QuoteShe 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.
Quote from: Crazy_Ivan80 on May 20, 2012, 03:54:02 AM
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. :mad:
Quote from: Crazy_Ivan80 on May 20, 2012, 03:54:02 AM
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.
Quote from: Peter Wiggin on May 20, 2012, 01:06:20 PM
Quote from: Crazy_Ivan80 on May 20, 2012, 03:54:02 AM
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.
Quote from: merithyn on May 20, 2012, 10:32:38 AM
Quote from: Crazy_Ivan80 on May 20, 2012, 03:54:02 AM
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. :mad:
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.
Quote from: Tamas on May 20, 2012, 10:11:35 AM
The Government knows your interests better than you do.
Indeed. Their ability for long term thinking is superior to that of the average person.
I agree that it's a problem and I actually don't feel that the law was necessarily intended to do this to stay at home parents (unintended consequence.) Traditionally the assumption is in a marriage there is joint financial power over the entire household's finances. I don't see why the application shouldn't be considered in terms of household income. Now, I think it is entirely valid for the bank to
ask for individual income of both spouses in addition to total household income--that can create a different risk profile. A single person making $120,000 a year and two people making $60,000 a year have different risk profiles.
So while I don't necessarily think this is a good rule, I also don't really agree with these tired old arguments from homemakers:
Quote"Just because I don't get a direct paycheck for [my work], doesn't mean it's not worthwhile work that I'm doing."
She doesn't get a direct paycheck because she does not have a paid position, she does not have a professional occupation, period. I have a child, raising kids is work, but it isn't a job and it isn't an occupation. Banks only care (rightly) about paid occupations, and couldn't give a shit what I do outside of my paid occupation for free.
Quote"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?!"
This just isn't true, and I think this is what happens when a yuppie quits their real job to raise kids. They get a little bit of culture shock that sitting behind a desk all day may be a little more glamorous than keeping a house and cleaning up after kids all the time, but that doesn't make it a $120,000 a year job. I have a family friend who is a single mother in St. Louis. About five years ago she got a job as a nanny for a wealthy couple. It pays around $40,000 a year, plus they put her up for free in a townhouse that is a block away from their house so that she is always nearby. She's essentially responsible for the kids she watches anytime the parents aren't home and anytime they come home they may leave at a moments notice and she's expected to come over to watch them. She loves her job, it gives her a free place to live, a decent salary, and the ability to watch her own small child all day while also earning a living. This wealthy family frequently goes on expensive overseas vacations, and when they do our friend and her daughter get to go with them. It's ostensibly "working", but it's working in the Caymans or Australia or New Zealand on a beach somewhere.
If you factor in the free housing it would bump her effective pay over $40k, but it's still nowhere near $120,000. I know other families with live-in nannies who compensate them a lot less than this, the family friend I mention is the
best compensated nanny I'm aware of (once you factor in all the perks on top of salary.) Most of the others I am aware of make an hourly wage under $10/hr with little to no benefits. No one is making $120,000 to do these jobs, and lots of the ones I'm talking about are absolutely expected to do more than just babysit. They're expected to clean house, sometimes handle grocery shopping and etc.
Finally, even if professional nannies made $120k that would still be irrelevant, because no one gets paid to clean up after their own family or to raise their own kids, it's a total non-argument.
Yeah, but because her actual argument is stupid, she's trying to turn it into a 'nobody respects stay-at-home moms' thing.
Quote from: alfred russel on May 20, 2012, 09:38:09 AM
QuoteShe 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.
And the article doesn't even say that lenders are forbidden to issue credit cards to stay-at-home parents who don't have any individual income of their own, only that "the Federal Reserve now requires credit card issuers to
consider individual income from applicants instead of household income". And I know from personal experience that lender will in fact lend money to people with no income (though they may have wised up some in the last couple of years).
Nobody is going to extend credit to individuals with no reportable income that can't be recouped via collection actions or judgments. "Stay-At_Home Moms" are in the same league as the unemployed and the disabled.
Stay at Home Mom = I want to stay home, put kid in the play pen and watch Sally Jesse until 4 pm. Vacuum 5 minutes before man gets home and bitch and moan about how hard my day was.
Quote from: CountDeMoney on May 20, 2012, 08:28:50 PM
Nobody is going to extend credit to individuals with no reportable income that can't be recouped via collection actions or judgments. "Stay-At_Home Moms" are in the same league as the unemployed and the disabled.
A) You are greatly overestimating the intelligence and judgement of lenders.
B) Stay-at-home parents DO have recoverable assets, depending on the jurisdiction--their spouses (who, presumably, do have incomes) are responsible for their debts.
Quote from: Neil on May 20, 2012, 03:31:38 PM
Yeah, but because her actual argument is stupid, she's trying to turn it into a 'nobody respects stay-at-home moms' thing.
This was actually the part that turned me off her side of things. It's a by-product of a law, not the intent, so her turning it into a whole NOBODY RESPECTS THE STAY-AT-HOME MOM AND I'M TIRED OF IT!! schtick makes no sense.
As for the idea of them just getting a job, for some families, it costs more to get a job than it does to stay home. Monkeybutt should attest to this. Having five kids under five at home would cost him a lot more than anything his wife would make were she to get a job. I went through the same thing. It was, honestly, far more cost-effective for me to stay home than for me to get a job for the first eight years that I had kids. As soon as it made sense financially, I was out the door and making a paycheck, believe me. :ph34r:
Quote from: Tamas on May 20, 2012, 10:11:35 AM
Quote from: alfred russel on May 20, 2012, 09:38:09 AM
QuoteShe 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.
Correct.
Quote from: dps on May 20, 2012, 09:03:29 PM
Quote from: CountDeMoney on May 20, 2012, 08:28:50 PM
Nobody is going to extend credit to individuals with no reportable income that can't be recouped via collection actions or judgments. "Stay-At_Home Moms" are in the same league as the unemployed and the disabled.
A) You are greatly overestimating the intelligence and judgement of lenders.
B) Stay-at-home parents DO have recoverable assets, depending on the jurisdiction--their spouses (who, presumably, do have incomes) are responsible for their debts.
I don't think that's true in most jurisdictions. In community property states, perhaps.
Quote from: Ideologue on May 21, 2012, 12:20:33 AM
Quote from: Tamas on May 20, 2012, 10:11:35 AM
Quote from: alfred russel on May 20, 2012, 09:38:09 AM
QuoteShe 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.
Correct.
filthy communist
First Central Heat, now this.. eh, Tamas?
Quote from: Tamas on May 21, 2012, 01:36:34 AM
Quote from: Ideologue on May 21, 2012, 12:20:33 AM
Quote from: Tamas on May 20, 2012, 10:11:35 AM
Quote from: alfred russel on May 20, 2012, 09:38:09 AM
QuoteShe 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.
Correct.
filthy communist
But I live in a country where I'm free to be so. It's pretty swell! :cheers:
Quote from: Ideologue on May 21, 2012, 02:36:49 AM
Quote from: Tamas on May 21, 2012, 01:36:34 AM
Quote from: Ideologue on May 21, 2012, 12:20:33 AM
Quote from: Tamas on May 20, 2012, 10:11:35 AM
Quote from: alfred russel on May 20, 2012, 09:38:09 AM
QuoteShe 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.
Correct.
filthy communist
But I live in a country where I'm free to be so. It's pretty swell! :cheers:
Well, you can express your ideas, but fortunately there is the rule of law to prevent you from robbing and murdering everyone the way you would like to.
Quote from: Neil on May 21, 2012, 12:51:57 PM
Well, you can express your ideas, but fortunately there is the rule of law to prevent you from robbing and murdering everyone the way you would like to.
:lol:
Quote from: OttoVonBismarck on May 20, 2012, 03:25:14 PM
I agree that it's a problem and I actually don't feel that the law was necessarily intended to do this to stay at home parents (unintended consequence.) Traditionally the assumption is in a marriage there is joint financial power over the entire household's finances. I don't see why the application shouldn't be considered in terms of household income. Now, I think it is entirely valid for the bank to ask for individual income of both spouses in addition to total household income--that can create a different risk profile. A single person making $120,000 a year and two people making $60,000 a year have different risk profiles.
So while I don't necessarily think this is a good rule, I also don't really agree with these tired old arguments from homemakers:
Quote"Just because I don't get a direct paycheck for [my work], doesn't mean it's not worthwhile work that I'm doing."
She doesn't get a direct paycheck because she does not have a paid position, she does not have a professional occupation, period. I have a child, raising kids is work, but it isn't a job and it isn't an occupation. Banks only care (rightly) about paid occupations, and couldn't give a shit what I do outside of my paid occupation for free.
Quote"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?!"
This just isn't true, and I think this is what happens when a yuppie quits their real job to raise kids. They get a little bit of culture shock that sitting behind a desk all day may be a little more glamorous than keeping a house and cleaning up after kids all the time, but that doesn't make it a $120,000 a year job. I have a family friend who is a single mother in St. Louis. About five years ago she got a job as a nanny for a wealthy couple. It pays around $40,000 a year, plus they put her up for free in a townhouse that is a block away from their house so that she is always nearby. She's essentially responsible for the kids she watches anytime the parents aren't home and anytime they come home they may leave at a moments notice and she's expected to come over to watch them. She loves her job, it gives her a free place to live, a decent salary, and the ability to watch her own small child all day while also earning a living. This wealthy family frequently goes on expensive overseas vacations, and when they do our friend and her daughter get to go with them. It's ostensibly "working", but it's working in the Caymans or Australia or New Zealand on a beach somewhere.
If you factor in the free housing it would bump her effective pay over $40k, but it's still nowhere near $120,000. I know other families with live-in nannies who compensate them a lot less than this, the family friend I mention is the best compensated nanny I'm aware of (once you factor in all the perks on top of salary.) Most of the others I am aware of make an hourly wage under $10/hr with little to no benefits. No one is making $120,000 to do these jobs, and lots of the ones I'm talking about are absolutely expected to do more than just babysit. They're expected to clean house, sometimes handle grocery shopping and etc.
Finally, even if professional nannies made $120k that would still be irrelevant, because no one gets paid to clean up after their own family or to raise their own kids, it's a total non-argument.
We paid our live-in nanny room & board plus $1200 a month. Mind you she was a relation, but this was the usual arrangement for live-ins who do not drive, speak English or have special educational skills or requirements a few years ago in Toronto.
http://www.nannygps.com/nanny_salary.jsp#canada
God that's dirt.