A new Change.org is trying to revamp how credit is given

[Frügal]

Give Stay-at-Home Moms Credit!

About the Petition

In 1974 Congresswoman Bella Abzug realized something: she could make laws in Congress, but she couldn’t get her own credit card without her husband’s permission.

Now, almost 40 years after Congresswoman Abzug fought for - and won - the rights of women to get their own credit, that right is being threatened.

Last year, a law called the CARD Act took effect. It was meant to protect consumers from misleading credit card practices. Instead, it set the United States back almost half a century. The CARD Act changed the way people - especially stay at home moms - could apply for a credit card. Instead of filling in your “household income” (the combined income of you and your partner or spouse), you can only note your own income. What does this mean?

It is 2012, and because I’m a stay at home mom, I can’t get my own credit card. My husband has to give me permission to get my own line of credit. This is demeaning and flat out unfair.

This is despite the fact that I make 95% of our household purchases, have an impeccable credit score and handle the majority of my family’s finances.

The Consumer Financial Protection Bureau has the ability to change the CARD Act without going through a long, painful Congressional process. In fact, the Consumer Financial Protection Bureau was created “to make markets for consumer financial products and services work for Americans”.

I am an American and I’m a stay at home mom. There are millions of parents out there, just like me, who should be given the right to their own credit, but we need the CFPB to make this service work for us.

Join me to tell the Consumer Financial Protection Bureau to fix this broken rule. Stay at home parents shouldn’t be devalued by our country’s credit policies.


***I am starting this petition in partnership with MomsRising.org

The email I received from Change.org

Holly McCall runs her family's finances, and to do that job right, she needs a family credit card. But thanks to new credit rules, she can't get access to a credit card on her own anymore. In fact, she has to get her husband's permission.

This isn't a story from 1950 -- it's happening today. Under these new rules, a stay-at-home mom like Holly who applies for a credit card and is told that since she has no personal income, she must ask her husband’s permission to get access to credit.

Holly stays at home with her kids, but she used to work in the credit industry -- and she was shocked to learn that this new rule meant that she would not be able to get a credit card without her husband's permission. So Holly started a campaign on Change.org, asking the Consumer Financial Protection Bureau to fix this broken policy. Click here to add your name.

Holly knows about the effects of this rule firsthand: When Holly recently applied for a Target credit card, her application was denied because her personal income is zero, even though her credit score is nearly 800.

The new policy, called the "CARD Act," states that individuals must use their personal income, not household income, to apply for credit cards -- meaning that stay-at-home parents, who have no personal income, can’t get access to credit.

There is some good news -- by all accounts, this is an unintended effect of the CARD Act, and the Consumer Financial Protection Bureau (CFPB) can fix this problem without getting Congress involved. If enough people sign Holly's petition to the CFPB, they'll see that this is an urgent priority that needs to be addressed immediately.

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My personal opinion
Change.org and this woman are making this law sound sexist in every way possible. When, in fact, if I were a stay-at-home father and had no income other than my wife's, I would be subject to the same exact policy.

Personally, I think it's great. I see nothing wrong with it at all. The money-maker should be the one addressed about whether or not the one not making money can have a credit account or not. After all, the money-maker would be the one held responsible for the debt accrued.

Discuss.

[disneysteve]

"her application was denied because her personal income is zero"

Isn't that exactly how it should be? Zero income should mean zero borrowing ability. We've discussed this many times regarding college students with no job and no income being given credit cards. This is no different. If you have no income, why should anyone lend money to you?

[Frügal]

"her application was denied because her personal income is zero"

Isn't that exactly how it should be? Zero income should mean zero borrowing ability. We've discussed this many times regarding college students with no job and no income being given credit cards. This is no different. If you have no income, why should anyone lend money to you?

Absolutely! Glad someone agrees.

As for students, I agree with them not being able to get credit cards. Borrowing ability via student loans, however, should be a little looser, I think. I believe it should be based on their intended major's mean salary according to the BLS. Seems pretty fair to me. Also, I think the age limit of 25 for having to have your parents qualify for your student loans is too high. 21, I think. (25 is the new 21, as insurance companies use 25 as the magic responsibility level).

^ Too off-topic though. Ha.

[jpg7n16]

I see nothing wrong with it at all.

Agreed. No income = no personal ability to repay = denied. And like you said, it happens to both sexes, not just women. If the man were the one at home, he'd be denied too.

The money-maker should be the one addressed about whether or not the one not making money can have a credit account or not. After all, the money-maker would be the one held responsible for the debt accrued.

Disagree.

The family unit should come to a decision as a couple on what type of credit is needed. It should be a joint decision.

And they're both responsible for the debt accrued.

[Frügal]

Disagree.

The family unit should come to a decision as a couple on what type of credit is needed. It should be a joint decision.

And they're both responsible for the debt accrued.

From a relationship point-of-view, yes, both should address the issue. However, from a financial institution's point-of-view, they look at the bread winner.

And I only meant that the money-maker would be responsible because, well, they make the money.

[anna_chronistic]

Agreed. No income = no personal ability to repay = denied. And like you said, it happens to both sexes, not just women. If the man were the one at home, he'd be denied too.


Disagree.

The family unit should come to a decision as a couple on what type of credit is needed. It should be a joint decision.

And they're both responsible for the debt accrued.

But, legally, wouldn't the person who has the credit card be responsible for the debt, rather than both of them, if only one name is on the card? Maybe I'm reading this wrong, but I'm seeing that people with no income want to apply for a card in solely their own name. In which case, the breadwinner couldn't be held liable for the debt, right? This isn't about a "family" credit card, this is being portrayed as "Person A pays household bills from Person B's income, so Person A needs a credit card in his/her own name."

I agree with those who say that a personal credit card should only go to someone who has an income. If the income is from someone else, they should get a joint credit card, yes? Maybe I'm misunderstanding, though?

[Frügal]

If they are married, it affects the spouse as well.

[anna_chronistic]

If they are married, it affects the spouse as well.

Got it. I'm unmarried and I haven't applied for a credit card in years, so I assumed only the person who applies/is named on the card is liable. I still think you should need an income to get credit.

[ceniele]

Outrageous

This whole to-do is a set back for progress against laws and regulations that ACTUALLY discriminate. Requiring someone to have income before issuing them credit is RESPONSIBLE. This is not sexist in the least, it applies equally to both genders. The fact that the majority of stay at home parents are women is irrelevant in this case. (And frankly, it's pretty luxurious to be ABLE to be a stay at home parent in this economy, so maybe stop complaining) Also, as mentioned above, financial institutions have no way of knowing how finances work in your home!

The part that really gets me though? It's not even that big a burden! How often do you get a new credit card? Not often! So what... on ONE occasion you and your spouse have to get the card together. It is not as though this company is saying they will not ISSUE joint cards, or that your spouse must be present every time the card is used. I sincerely hope the CFPB doesn't change their policy.

[lbrown1179]

No income, no credit

I'm as liberal and feminist as they come, but I find Holly's petition preposterous. Making a choice not to earn an income and take care of children is a sacrifice. It means being dependent on another's income, which also means being dependent on that person's credit, because the income earner is the one who will have to pay the bills. If I were a lender, I would not give credit to someone with no personal income.

[Like2Plan]

I think it is absurd that congresss had to pass a law that makes it illegal to extend credit to someone who has zero ability to pay (notice that I didn't say income?). It seems like that should be just be good business sense--one of those why are we even having this conversation type things.

But, I guess I will have to be in the minority here when it comes to family income. In the case of stay at home Moms (or Dads), the income from the "breadwinner" is not solely their income-it is family income. When it comes to filing taxes, the "breadwinner" is not the only one filing the taxes--it goes according to family income. That is just crazy that a spouse should have to ask permission from the other to be "allowed" to use their line of credit. Each spouse should have their own line of credit and credit history because not every marriage has a fairy tale ending. It is crazy that one spouse may have been managing all the finances, but not necessarily the "bread winner" and then the marriage ends and they have zero credit history despite years and years and years and years of dutifully managing credit in a responsible way. And, what about an abusive, controlling spouse?

And it is possible to have assets, but not "income". Like a retired person. So, does this mean a retired person doesn't get a credit card due to zero income? (And different topic, but there are reasons for using a credit card instead of a debit card.)

[disneysteve]

And it is possible to have assets, but not "income". Like a retired person. So, does this mean a retired person doesn't get a credit card due to zero income?

If that retired person has zero income, how are they living? Of course they have income: social security, pension, IRA/401k. You can qualify for credit based on that.

[Like2Plan]

If that retired person has zero income, how are they living? Of course they have income: social security, pension, IRA/401k. You can qualify for credit based on that.

Sorry-to clarify, I meant "earned" income (got kind of excited and left that part off).
I know of at least one instance (for a college student) where assets were not considered in the credit decision--they were going completely on "earned" income--even with 10K worth of assets that were being held in their institution alone. When asked, they said they did not take assets into consideration for the decision.

I have not applied for credit since I retired, but in a pre-retirement seminar I was advised to apply for a line of credit prior to retiring. I didn't do it because I couldn't think of anything we might need a line of credit for (plus-I think even if you are approved I think they can unapprove it or reduce the line of credit). Now I am wondering if these new rules were the reason they suggested it.

[ktmarvels]

This topic is personally relevant to me, and I'm glad to see that someone is looking to change it.

A couple of weeks ago I applied for a credit card and was denied because of my debt-to-income ratio.
They only counted our rental income (which covers our rental mortgage) and my personal income (~1/3 of our household income). However, they included the entirety of our household debt, which DH and I are both on (mortgage, rental mortgage, student loans and husband's car loan). It would be very tight if DH were to lose his job (and very unlikely given he is in the military), but I think we could manage, especially with what we have in savings.

I felt like I was being penalized for sharing the debt burden in our marriage. No one had any qualms about me being put on the mortgage when I was a student and not making any money, however, now I can't get a credit card because I have too much debt associated with my name.

I don't feel people should be denied credit cards in situations like this or in the case of stay-at-home parents. However I agree that maybe it's a little greedy or naive to give credit cards to college students who have no income. At some point there has to be some personal responsibility though.

[Like2Plan]

Another situation comes to mind--even if folks stay married 'til death do you part what happens to the stay at home spouse who has no credit history because all the CCs were in the name of the spouse...