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Stay at home spouse? No credit for you.
May 24, 2012 8:19 AM   Subscribe

The CARD Act of 2009, which has been much lauded for providing consumer protection hurts stay-at-home moms (and dad's). "This decision was meant to keep college students from going into credit card debt they could not afford to pay off but it also has the consequence of disenfranchising stay-at-home parents, 88% of whom are women. [...] In the worst case scenario, the Federal Reserve’s decision will play a role in financial abuse. Financial abuse is a factor in 98% of abusive relationships." 30,000 signatures have been delivered to the Financial Protection Bureu in Washington DC with "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."
posted by stoneweaver (81 comments total) 11 users marked this as a favorite

 
Huh. I hadn't heard that. My husband is a full-time student; guess he wouldn't be able to get his own credit card if he needed one.
posted by ThePinkSuperhero at 8:30 AM on May 24, 2012


As an FYI, the woman leading the petition, Holly McCall, is a former Capital One Executive. Her husband still is. Industry hates this rule. Consumer groups support it.
posted by allen.spaulding at 8:32 AM on May 24, 2012 [73 favorites]


A lot of the arguments presented here seem a bit hyperbolic. It's unfortunate that people without their own source of income are having a hard time getting a credit card, but that's not setting women's rights back 50 years.
posted by KGMoney at 8:33 AM on May 24, 2012 [3 favorites]


I've heard a lot of libertarians complaining about this.
posted by michaelh at 8:33 AM on May 24, 2012


Good catch, allen.spaulding.
posted by KGMoney at 8:33 AM on May 24, 2012


I was able to find this article about her connection to Capital One. I haven't found anything about consumer groups supporting this rule, but I would be very interested in reading any articles you have about it allen.spaulding.
posted by stoneweaver at 8:34 AM on May 24, 2012


And personally, while the FRB's rule is fairly bad, there's little evidence that this is actually hurting people. It's important to note that the petition failed to identify individuals who have actually had problems getting credit cards. Applications for credit ask people to write down their income. I personally suspect that people with shared access to a spouse or partner's income write down their household income, and not $0.

But don't let that get in the way of a credit card executive trying to gin up support for the idea that the Obama administration hates stay-at-home moms.
posted by allen.spaulding at 8:35 AM on May 24, 2012 [4 favorites]


Here's a debate where the CRL supports the rule on NPR

And here's the NCLC supporting it on HuffPo

Again, the rule could be improved, but it's not exactly hurting people. This is about a pernicious an astroturfing campaign I've seen in a while.
posted by allen.spaulding at 8:37 AM on May 24, 2012 [2 favorites]


"feels like a flashback to the 1950s because of the way women aren't empowered financially."

Taking on consumer debt at (checking the Capitol One site) 25% interest may be empowering to somebody, but it sure isn't the borrower.
posted by enn at 8:39 AM on May 24, 2012 [22 favorites]


I get the argument and it does sound like something that needs to get addressed somehow.

On the other hand what they're saying is, "I don't have any income, you need to give me credit."

I mean, a single man or woman with no income can't get a credit card either.

Guess what? If you're a non-working spouse, you have already given up your financial independence.
posted by VTX at 8:41 AM on May 24, 2012 [12 favorites]


The fact that stay-at-home parents work hard does not entitle them to a credit card. Credit is extended from a creditor on the basis of the debtor's ability to pay off the debt. Someone who does not have a paying job, no matter how hard they work, does not have the ability to pay off debt.

Spousal liability for credit debt varies quite a lot by state. Some quick googling seems to imply that only 9 of the 50 states are "community property" states, in which you can be held liable for debt incurred by a spouse without your sign-off. That means in 41 of 50 states, if a stay-at-home parent is extended credit without a co-signer, and that parent has no income, the credit card company is extending credit to someone who has no ability to pay, and who has no spouse who is legally liable for paying.

Why do you think the credit card companies are interested in doing this? It sounds like a bad risk, right? It must be altruism. They want to lend money to people who can't pay them back, to "empower" them, right?

Uh. No. They want to be able to lend money to people who can't pay it back, knowing that their family will feel tremendous pressure to pay it off (and in many cases, may not even understand that only the person who acquired the credit card is actually legally liable).

This is a seriously biased article, and it isn't aimed at advancing female empowerment. It is aimed at advancing the goal of maximizing profits for the credit card companies.
posted by tocts at 8:44 AM on May 24, 2012 [42 favorites]


So, credit card industry wants to sound sympathetic to the average consumer while trying to delegitimize the department specifically set up to help said consumer, and they noticed that women's rights are getting more news coverage than usual this year and the Republican media machine will do all the messaging legwork on this because it's a chance to say "No, see, Obama hates women more!"? Got it.
posted by jason_steakums at 8:44 AM on May 24, 2012 [6 favorites]


There was an interesting bill proposed years ago that said "dredit card companies must print the time required to pay off the balance by making only the minimum payment", yeah lobbyists killed it.
posted by jeffburdges at 8:45 AM on May 24, 2012 [2 favorites]


I liked being a student and being offered a credit card with no or little income. But that's because in my family, credit cards aren't credit, but really "debit cards that are accepted by hotels, airlines and around the world." We never actually spend any money that we couldn't pay off that minute.

But an adult really does need to be able to book hotels and airlines, and in Canada you can't even purchase anything online without a credit card.
posted by jb at 8:47 AM on May 24, 2012 [2 favorites]


All it requires is a redefinition of what a stay-at-home spouse is. The article is already assuming a 1950s-view of wifely duties -- you stay at home, don't get paid, and you're subject to the whims of your husband's finances. This is the anachronistic lifestyle that the CARD act is trying to prevent, not enforce.

What the CARD act shows is how things need to be set up to work properly. A "stay-at-home mom" isn't a correct, modern term to empower people. A contract should be drawn up, under which what was formerly a "stay-at-home mom" is now an on-site contractor hired by the household to do their contractual duties, and recieves a paycheck commensurate to the work done. Voila, now what had been an unpaid stay-at-home mom is a gainfully-employed, credit-card deserving worker!

And the more a family is treated like a corporation, the more political power they'll have. Just a husband and wife, with one income? Pfsh, they don't deserve any help. When they become a coporation, though, boy does the government take notice.
posted by AzraelBrown at 8:48 AM on May 24, 2012 [8 favorites]


Jb, in your case, as you said you pay it right away, why wouldn't a prepaid credit card fit your needs? The fees would probably be on par with an annual fee(or god help you one late payment fee) of a regular credit card
posted by wcfields at 8:49 AM on May 24, 2012


Also -- back when credit cards were hard to get, I remember that my mom (who also didn't have a driver's license) could not even rent a video, let alone book a hotel, even if she had the cash to pay off both in full.

Not having a credit card is very limiting -- and people should be able to get them.

I'm all for consumer protection, and I would ban all the usurious check-cashing places (replacing them with free/non-profit alternatives), but what you do with a credit card is your business. People who need them as a form of security (for airlines, hotels) should be able to get them, even if they have a low income -- because they may have savings or just be very good with that income.
posted by jb at 8:51 AM on May 24, 2012 [3 favorites]


So, credit card industry wants to sound sympathetic to the average consumer while trying to delegitimize the department specifically set up to help said consumer...

Maybe, or maybe they just want to be able to offer more credit cards to people who their data shows are low risk. I would guess that the risk management people at the banks have looked at the data and have figured out that a customer with $0 income and a non-borrowing spouse who makes $50k/year acts about the same as a customer who makes $25k/yr and has a non-borrowing spouse who makes $25k/yr.
posted by VTX at 8:54 AM on May 24, 2012 [1 favorite]


There was an interesting bill proposed years ago that said "dredit card companies must print the time required to pay off the balance by making only the minimum payment", yeah lobbyists killed it.
posted by jeffburdges at 11:45 AM on May 24


My credit cards have this information available on both my printed statements and it's one of the first things staring me in the face when I login electronically........
posted by zizzle at 8:54 AM on May 24, 2012 [2 favorites]


Credit is extended from a creditor on the basis of the debtor's ability to pay off the debt. Someone who does not have a paying job, no matter how hard they work, does not have the ability to pay off debt.

Exactly.

This rule is makes complete sense as a part of the logic of markets and capitalism, but that should only make us suspicious of that logic. If only because domestic labor makes huge amounts of extra-domestic labor possible.
posted by phrontist at 8:54 AM on May 24, 2012


Not having a credit card is very limiting -- and people should be able to get them.


If this is your premise, then there doesn't need to be a change to the rule. Stay-at-home parents can apply for a joint account and have all the benefits, including the establishment of credit history. If you're concerned about financial abuse, then this rule may present a problem of sorts.
posted by allen.spaulding at 8:55 AM on May 24, 2012 [1 favorite]


Jb, in your case, as you said you pay it right away, why wouldn't a prepaid credit card fit your needs? The fees would probably be on par with an annual fee(or god help you one late payment fee) of a regular credit card

Perhaps -- do those have to be connected to anyone else's? Would a hotel accept one? Usually a credit card is necessary for unforeseen costs.

That said, I've never had a credit card with fees - not even when I was a student and had my mini-card with the $300-600 limit.

I am in Canada, so the law wouldn't affect me obviously -- and we are more dependent on credit cards, as we do not have debit cards connected to Visa or Mastercard. When I lived in the US, I did get by just fine without a credit card, because I had a Mastercard debit number. Maybe in the US, credit cards are less necessary -- but I totally understand where non-earning partners are coming from. Having a credit card is a big part of moving in the contemporary North American economy.
posted by jb at 8:56 AM on May 24, 2012


(I considered contacting the mods to take down the post when allen.spaulding noted the problematic framing, but I'm glad I didn't. Thank you everyone for the conversation. Honestly, I don't think it's as simple as saying that industry hates the rule and consumer protection groups are for it. Don't skip the the Women's Law Project article. The issue of financial independence is a complex one, and denying it to women who have chosen or been forced to stay at home can create or exacerbate bad situations. There must be a middle ground.)
posted by stoneweaver at 8:58 AM on May 24, 2012 [5 favorites]


There was an interesting bill proposed years ago that said "dredit card companies must print the time required to pay off the balance by making only the minimum payment", yeah lobbyists killed it.

I've seen this very clearly spelled out on my personal and business credit card statements for quite some time now. (Wells Fargo, BECU, and Capital One.) "If you make only the minimum monthly payment and no additional charges are applied, it will take (THIRTY YEARS) to pay off your current balance. If you pay (FIVE HUNDRED) dollars a month, it will take (THIRTY-SEVEN MONTHS) to pay off your current balance. Very prominently displayed on the first page of the statement.

Doesn't really affect me, as the cards are always paid off in full every month, but still. It's nice to see (and pretty disgusting at how low they set the minimum payment to maximize interest revenue.)
posted by xedrik at 8:59 AM on May 24, 2012 [1 favorite]


There was an interesting bill proposed years ago that said "dredit card companies must print the time required to pay off the balance by making only the minimum payment", yeah lobbyists killed it.

No, they didn't. It's been there for about two years now.
posted by spaltavian at 9:02 AM on May 24, 2012 [3 favorites]


stoneweaver - I wasn't trying to be critical of you or the framing of the post. This is a tough issue and one I'm very familiar with. Holly McCall may not be the most uncompromised advocate I've ever seen, but there is a tough policy issue underneath it all.

As someone who follows the CARD Act closely, I think the Ability to Pay requirement ought not to be read in a vacuum. Congress was explicitly trying to restrict credit to certain segments of the market (explicitly college students and those under 21). It strikes us as odd and discriminatory that some people would have doors shut to them, but that was what Congress wanted. Whether the FRB correctly interpreted this statutory language in their Reg Z rulemaking is a separate and more technical question.
posted by allen.spaulding at 9:04 AM on May 24, 2012 [2 favorites]


The problem I have with the Women's Law Project article is the title "Stay-at-Home Parents Now Need to Ask Spouse for Credit Card".

Would the title be better if the Act was revoked and it was "Stay-at-Home Parents Now Need to Ask Spouse for money to pay down their Credit Card Bill"?
posted by Static Vagabond at 9:06 AM on May 24, 2012 [3 favorites]


It's important to note that the petition failed to identify individuals who have actually had problems getting credit cards. Applications for credit ask people to write down their income. I personally suspect that people with shared access to a spouse or partner's income write down their household income, and not $0.

...and then they ask you to verify that income, and your spouse's income doesn't count. I have actually been through this process, ironically while trying to open a card to transfer a balance away from Capitol One (which is nowhere near 25%, btw)
posted by the young rope-rider at 9:10 AM on May 24, 2012


People who need them as a form of security (for airlines, hotels) should be able to get them, even if they have a low income -- because they may have savings or just be very good with that income.

JB -- what you are looking for is called a "secured credit card". If you've got no income, but you have money saved, banks will gladly give you a card secured by that balance -- they'll even pay you interest.
posted by sparklemotion at 9:12 AM on May 24, 2012 [1 favorite]


...and then they ask you to verify that income, and your spouse's income doesn't count.

It depends on how you applied. There's no federal statutory requirement for verification. Usually in-store applications for private label cards do not have any verification. Most pre-screened offers accepted stated income without verification unless there's something that kicks it out of automatic underwriting and into manual review.

Balance transfer offers may be different and individual companies may require verification based on their own internal policies. Small banks and credit unions are far more likely to use manual review and require verification. Personally, I've opened far too many cards recently and never had a single one ask me to verify.
posted by allen.spaulding at 9:12 AM on May 24, 2012


Having a credit card is a big part of moving in the contemporary North American economy.

And having unsecured credit extended to you personally is dependent on you personally having the ability to pay it back. In these cases the most reasonable thing to do is have the spouse with an income cosign, since for all practical purposes they are going to be equally involved in making sure the payments are made. Cars and housing are both also major necessities in North America for married adults, but it would be irresponsible for a bank to give a car loan or mortgage to someone with no income instead of requiring them to have a cosigner who is more likely to have the means to pay back the loan.
posted by burnmp3s at 9:15 AM on May 24, 2012 [1 favorite]


Taking on consumer debt at (checking the Capitol One site) 25% interest may be empowering to somebody, but it sure isn't the borrower.

It can be empowering to people who need help leaving an abusive situation. Sorry if that's not clever and lulzy enough of a topic for mefi. I mean, SAHMs should already know how fucked they are anyway, amirite?
posted by the young rope-rider at 9:21 AM on May 24, 2012 [3 favorites]


Also, if any women in abusive situations are reading this, if you want to leave please safely reach out to a local domestic violence shelter or hotline. There may be programs in place in your location to help you get the help and childcare that you need to get out of your abusive relationship and continue to take care of your children. Many shelters have social workers or even attorneys on staff to help you get benefits like health insurance, subsidized childcare, job training, job placement...there are community colleges that have special programs for displaced homemakers that provide extra support while you're in school, including on-site daycare and financial aid. Don't lose hope.
posted by the young rope-rider at 9:25 AM on May 24, 2012 [1 favorite]


Yeah, you have to watch out for this astroturf stuff. After the BP oil spill a group called "Women of the Storm" showed up all of a sudden demanding that the government pay to restore wetlands. Except, oops, the oil companies were already required to pay for that
These new rules infuriate many stay-at-home moms, who argue that they shouldn’t be forced to give up their financial independence just because they choose to stay home to raise their children. One mother of two, Holly McCall of Vienna, Va., started a petition on Change.org called, “Don’t set us back half a century! Give stay-at-home moms credit.” Almost 35,000 people have now signed it.
How is the ability to go into debt without any income "Financial Independence"? If someone is married, won't their partner still be responsible for their debts anyway? And if that's the case, then shouldn't they both be involved in getting credit cards?

I don't really see how this has anything to do with feminism. I don't see how getting a credit card on her own could possibly help a woman all that much. If she's trying to leave him, she's still going to have to pay back the card and she won't have any income. So how is she better off?
posted by delmoi at 9:25 AM on May 24, 2012 [1 favorite]


Next up, organ donor industry fights for the right of stay-at-home moms to sell their organs.

"Laws restricting the sale of organs are setting back women's empowerment 50 years!"

And what's up with those oppressive child labor laws restricting children's right to work?
posted by straight at 9:27 AM on May 24, 2012 [1 favorite]


So, married people can also no longer be held accountable for their spouse's debt now, right? Because if we're going to only extend credit based on individual income, it logically follows that we should only recognize debt incurred by the individual.
posted by desuetude at 9:30 AM on May 24, 2012


It depends on the state but in 41 out of 50 states (per Tocts' statement above), yes.
posted by VTX at 9:33 AM on May 24, 2012


It can be empowering to people who need help leaving an abusive situation.

I agree, but an individual credit card won't solve this. See, that's the rub. Even if SAHMs can get a credit card, they are almost certainly required by the terms of the agreement to alert the credit card when their income changes.

Here's Capital One's current agreement.

On page 3, under account information, they state that you must tell them whenever your income changes. Failure to do so will put you in default and if you do tell that you no longer have any income, they can (and often will) instantly drop your credit limit to $0. So now you have your own credit card with revolving debt and no ability to purchase. This isn't financial independence.

I get that forcing stay-at-home spouses to have joint accounts can create situations of financial dependency and abuse. Yet it's not the case that having your own credit card can help you leave an abusive situation. You may find yourself worse off, in fact.
posted by allen.spaulding at 9:33 AM on May 24, 2012 [3 favorites]


"who argue that they shouldn’t be forced to give up their financial independence just because they choose to stay home"

Someone should explain to them what "financial independence" means.
posted by 0xdeadc0de at 9:34 AM on May 24, 2012


It can be empowering to people who need help leaving an abusive situation. Sorry if that's not clever and lulzy enough of a topic for mefi.

Who are you attacking here? No one is being "lulzy."

I mean, SAHMs should already know how fucked they are anyway, amirite?

No one is saying this.

If someone wants to leave an abusive relationship and cannot do so because they cannot borrow money at usurious interest rates from predatory lenders, the problem is not that borrowing standards are too stringent, the problem is that this kind of borrowing is the only option available in the first place. A better solution would be providing other options for people in this situation than taking on potentially ruinous levels of consumer debt. In the cases with which I am familiar people who have left abusive situations without financial resources have stayed at domestic violence shelters free of charge, and I think Congress should focus its energies on making sure that these shelters and housing services are universally available rather than on "solutions" that give a person who is being abused the choice between staying in an abusive situation and taking on enormous debt at high interest.
posted by enn at 9:34 AM on May 24, 2012 [12 favorites]


Having a credit card is a big part of moving in the contemporary North American economy.
So is having an income, or at least direct access to actual money, not just credit.

If the problem is that women who don't have jobs have to beg for money from their husbands, then giving them a credit card would mean that they would have to beg for money from their husbands to pay off the balance every month, right?

Or, if she's leaving him she'll also be leaving her source of income. So instead of just being broke, she can be broke and destroy her credit since she'll now have no way to make the payments.
It can be empowering to people who need help leaving an abusive situation. Sorry if that's not clever and lulzy enough of a topic for mefi. I mean, SAHMs should already know how fucked they are anyway, amirite?
So why not advocate for money for women's shelters and assistance programs, rather then more money for Capital One and Bank of America?

If a woman needs to leave an abusive relationship, borrowing a bunch of money with no ability to pay it back once she does leave doesn't seem like a good idea.
posted by delmoi at 9:38 AM on May 24, 2012 [5 favorites]


I don't really see how this has anything to do with feminism. I don't see how getting a credit card on her own could possibly help a woman all that much.

Say your sister can give you a place to stay and a job that would but she lives in Cleveland and you're in Denver. Or you finally got a spot in that subsidized daycare but you have to pay them upfront and then be reimbursed when the subsidy gets processed. Oh and they need a month up-front to hold the spot. Or say your child needs a special formula and you can't qualify for WIC because of your husband's income...

I think that this is primarily industry astroturfing but the lack of empathy here is shocking and angering nonetheless.
posted by the young rope-rider at 9:40 AM on May 24, 2012 [6 favorites]


I don't really see how this has anything to do with feminism. I don't see how getting a credit card on her own could possibly help a woman all that much. If she's trying to leave him, she's still going to have to pay back the card and she won't have any income. So how is she better off?

It lets her pay for the transportation (and food) needed to leave an abusive situation. Credit card companies are fucked up and exploitative in a lot of ways, but it's worth it to run up a little credit debt in the short-term. That's not gender-specific, but it does disproportionately affect women.
posted by desuetude at 9:43 AM on May 24, 2012


The National Network to End Domestic Violence mentions the CARD act in their financial guide Mastering Credit Basics [pdf], but only to warn that parents can still take out cards for minors under the bill.

This article seems to argue that the bigger problem is abusers taking out cards in their spouses and children's names, then ruining their credit scores.
posted by benzenedream at 9:44 AM on May 24, 2012 [2 favorites]


I think that this is primarily industry astroturfing but the lack of empathy here is shocking and angering nonetheless.

I can only speak for myself, but my feelings on this are not driven by a lack of empathy. For reasons I've stated above, I think this does not affect many people, as stay-at-home parents will write down household income and not individual income when applying for a card.

Even if it does restrict credit to some stay-at-home parents, I don't necessarily think that giving these individuals access to credit will help them leave abusive situations, as they will quickly lose access to their ability to spend, or will risk being in default. There is still some chance to the ability to buy a ticket out while still living with abuser can help and obviously credit card companies aren't perfect about this stuff, so people can game the system for a short while.

I do believe there may be some minor tweaks that could improve this situation. But that's not what Holly McCall wants.
posted by allen.spaulding at 9:46 AM on May 24, 2012 [1 favorite]


As an aside, if you're in an abusive relationship and you're going to leave, here is a tip.

If you have a joint account, open a sole owner account at the same bank, then transfer all of the money in your joint account(s) into the sole owner account.

I was a retail banker when the husband in what might have been this situation (or it might have just been a divorce, I didn't get many details and the guy was being a jerk) came in demanding that we put the money back. I had no intention of doing so but needed to check on what the bank's obligations were so I called our legal department. They told me that, in Minnesota, both parties of a joint account "own" the funds in the account and either one can do whatever they want with those funds with or without the other owner's permission or knowledge.

So I (diplomatically) told the customer to take a hike.

It probably depends on the laws in your state but if there is money in a joint account, you own those funds just as much as any of the other owners on the account and there is nothing the bank can, or will do to stop you from draining the account.
posted by VTX at 9:46 AM on May 24, 2012 [1 favorite]


So why not advocate for money for women's shelters and assistance programs, rather then more money for Capital One and Bank of America?

That's a vastly more complicated and inefficient proposition than just being able to put a bus ticket on a credit card.

Advocate to whom? Where does all this money come from for these brilliantly-funded women's shelters (which will have transportation service on-call, right?)
posted by desuetude at 9:51 AM on May 24, 2012 [2 favorites]


It's interesting to see how many people don't understand things like joint accounts or authorized users.

If you have no source of income, then you must borrow to pay off existing debts. Borrowing to pay off debts and simply not paying them off at all are two behaviors that Congress are trying to prevent.

End of story.
posted by Blue_Villain at 9:58 AM on May 24, 2012


Where does all this money come from for these brilliantly-funded women's shelters (which will have transportation service on-call, right?)

Do you not believe that women's shelters exist? Do you not believe that they can and do arrange transportation for new residents? I don't understand your argument here.
posted by enn at 10:02 AM on May 24, 2012


Say your sister can give you a place to stay and a job that would but she lives in Cleveland and you're in Denver. Or you finally got a spot in that subsidized daycare but you have to pay them upfront and then be reimbursed when the subsidy gets processed. Oh and they need a month up-front to hold the spot. Or say your child needs a special formula and you can't qualify for WIC because of your husband's income...
Why not just take the money out your husbands account, or use his credit card? Isn't that legal if you're married?

If you can't get access without him giving it to you, a better legal remedy would be for a law that requires the bank to give it to you.

Or, you could pass a law that helps all women trying to leave abusive relationships, not just ones with someone who has a decent income and good credit.
I think that this is primarily industry astroturfing but the lack of empathy here is shocking and angering nonetheless.
Well, it almost seems like the banks are trying to take advantage of women who are in abusive relationships, and on top of that they are pretending that they are somehow trying to help them. It seems pretty gross.

In fact, if a woman isn't planning on leaving her husband, getting a credit card could actually put her in a position where she ends up with less. If she runs up a debt, she'll now need to go back to her husband every single month and ask for money to make payments. And if the husband declines, rather then just going without whatever it she was going to buy, it will damage her credit rating. Rather then not being able to get a credit card when she's married and her husband has a good job, she'll be unable to get a credit card with a decent interest rate even if she gets her own job.

And, a bad credit rating can also hurt your ability get an apartment or in some cases even a job.
posted by delmoi at 10:03 AM on May 24, 2012 [3 favorites]


No, this is not taking things back to the 50's. In the 50's, even into the 80s, a woman had problems getting credit in her own name, regardless of income. When we bought our first house in 1984, I was the sole support of our family as my husband was still in school. I was making very good money, and we had no problem getting the mortgage. The only problem was, the only way they would do it was to put the mortgage in my husband's name, with me listed as "other income". When I protested that it should be in my name, they just said, "We don't do it that way, we do it this way. Do you want a mortgage or not?" Since this was in a community property state, so that it made no legal difference in the long run, I didn't fight it, but still. I also ran into some problems with credit cards in my name, even though I earned all the income.

There is a big difference between "No, we don't give credit to women, we need a man's signature" and "No, we don't give credit to people with no income. You need the signature of an income earning person." When a person agrees to give up their job and become a stay at home parent, they are giving up their financial independance. That is the basic deal -- it is not something you should do unless you can totally trust your partner. Financial abuse is a problem, but the answer is not to hand out credit cards to people who have no way to pay for them.
posted by pbrim at 10:04 AM on May 24, 2012 [6 favorites]


It lets her pay for the transportation (and food) needed to leave an abusive situation. Credit card companies are fucked up and exploitative in a lot of ways, but it's worth it to run up a little credit debt in the short-term.

If it were legal to buy people's organs, she could sell a kidney and afford that bus ticket without going into debt.

More seriously, the situation you describe is very important, but there are far more people in trouble because of credit card debt than stay-at-home spouses in abusive situations. Expanding the credit card companies' ability to trap more people in their debt clutches seems like a very bad policy for addressing the problem of abused spouses who need quick cash to get out of a bad situation.

It's like treating cancer (a very serious, important problem) with a shotgun.
posted by straight at 10:07 AM on May 24, 2012 [2 favorites]


Reasons to have your own, separate credit card as a stay-at-home spouse:

1.) Having credit in your own name DOES give a SAH spouse more financial freedom to leave a relationship. I see people here arguing that it doesn't, really, because you'll have to pay the money back eventually with interest etc., and how will you do that with no income? But that argument is based on the premise that a SAH spouse who borrows money to leave a relationship will never get a job. Which is ridiculous. Generally a SAH spouse leaving a relationship has a plan to STOP staying home and get a job, as a part of the whole plan to leave the relationship and start an independent household. It is far, far easier to get a job when you have a place to stay, have access to transportation and have the ability to purchase professional attire / supplies that may be necessary for work (a computer, a cell phone, etc.). And access to all of those things is easier when you have access to credit.

2.) Having credit in your own name allows you to make purchases without your spouse knowing about it. The freedom to do this is helpful to people in abusive relationships, but that's not the only reason a spouse would want to selectively keep purchases a secret. The ability comes in handy when you want to buy a surprise birthday present, for example.

3.) Having credit in your own name does far more to build your credit history than being listed as an authorized user on someone else's card.

A stay-at-home spouse often contributes significantly to household finances -- by saving the family money on childcare, by enabling the working spouse to take a high-income job that requires long hours or travel, etc. Is it fair for one spouse to take all the credit (literally) for a household financial situation that both spouses actually contribute to?

Also, stay-at-home spouses don't generally stay at home permanently. Someone may choose to stay home for a year or three years to care for a very young child or a sick relative, and then return to the workforce. A temporary lack of income does not indicate that a SAH spouse is incapable of earning income.

Though I am sure the credit industry is taking advantage of the controversy over this provision of the CARD Act, opposition to the new rules' effect on SAH spouses and particularly women did NOT begin as an astroturf campaign. Very shortly after the bill's passage a coalition of women's rights supporters in Congress became concerned about its potential negative effects on SAH spouses and urged the CFPB to take care in the law's implementation.

Personally, as a feminist and as a spouse who works part-time in order to care for a child with special needs, this restriction pisses me off. I think the credit industry is a bank of amoral jackals and I hate predatory lending with the power of 1,000 burning suns, and this part of the CARD act still pisses me off. IMO it implies that by choosing not to outsource some of my family's most important work, I have relinquished my adulthood.
posted by BlueJae at 10:11 AM on May 24, 2012 [8 favorites]


Hah I meant pack of amoral jackals but bank of amoral jackals is actually better, isn't it?
posted by BlueJae at 10:12 AM on May 24, 2012


So why not advocate for money for women's shelters and assistance programs, rather then more money for Capital One and Bank of America?

That's a vastly more complicated and inefficient proposition than just being able to put a bus ticket on a credit card.


Well to me charity and other non-profit sources seem to be the most reasonable sources of aid for people in need that have no access at all to money to pay for essential goods and services. Why would you expect a for-profit, essentially predatory financing system to solve these sorts of problems more efficiently? If people without income needs loans then it would make much more sense to do it either through a government program or a non-profit.
posted by burnmp3s at 10:15 AM on May 24, 2012


That's a vastly more complicated and inefficient proposition than just being able to put a bus ticket on a credit card.

You (and the young rope-rider) are both effectively making the argument that if it helps any woman anywhere possibly get out of a bad relationship, it must be an unqualified good. I'm sorry, but I really cannot agree with that. There are a lot of potential changes to the law that you could argue that might maybe, some day, in some small number of instances make it easier for a woman to leave an abusive relationship. That doesn't mean the side effects of that change can be thrown aside and ignored without question. It also doesn't mean that we who disagree with such a change lack empathy.

This is astroturfing. It has already been pointed out repeatedly in this thread what is really being argued here: credit card companies want to be able to extend credit to people they know cannot pay them back, in the hopes of either hooking them into minimum payments for the rest of their lives, or pressuring their family members to pay for a debt they never signed off on. The fact that it might help women in abusive relationships is a complete side effect. It's not the goal here -- it's just one good aspect that can be pointed to in the hopes of distracting attention away from the multitude of much more wide-spread, much more problematic aspects of the proposed change.

If the problem you want to address is that women find it hard to leave abusive relationships, the solution you should be arguing for is something actually directed at that. What you are instead arguing is that we need to leave open the possibility of a lot of people being seriously abused by corporations because it might, maybe, possibly have the unintended side effect of helping someone out of a bad relationship.

This is solving one (completely and undeniably bad) problem by creating a bigger one.
posted by tocts at 10:16 AM on May 24, 2012 [10 favorites]


burnmp3s: Well to me charity and other non-profit sources seem to be the most reasonable sources of aid for people in need that have no access at all to money to pay for essential goods and services.

The prevailing sentiment seems to be that "charity and other non-profit sources" should take care of the indigent. What people don't seem to realize or care about is that this same sentiment is the justification used by Congress to go after the safety net that provides these resources. That safety net is in the process of being systematically dismantled. There is no Plan B. But everyone seems to think that the answer to problems like this is, "Oh, 'charity' and the non-profits will take care of those people."

delmoi: Or, you could pass a law that helps all women trying to leave abusive relationships, not just ones with someone who has a decent income and good credit.

What alternate Congress in what fantasy version of the United States is going to pass this hypothetical law?
posted by blucevalo at 10:28 AM on May 24, 2012 [1 favorite]


I should specify that two of the people opposed to the use of the CARD act to prevent stay-at-home spouses from obtaining credit are the author of the act, Congresswoman Carolyn Maloney, and the author of the specific amendment that the CFPB is using to justify denying credit to SAH spouses, Congresswoman Louise Slaughter. Says Slaughter:

"While I was proud that my amendment to protect young adults was included in the legislation, we should remember that it was necessary because college students were targeted by credit card companies and too often falling into crippling debt. That provision should not be extended in a way that harms-stay-at-home mothers."

When the authors of legislation argue that the legislation is being misapplied, that is not astroturfing.
posted by BlueJae at 10:36 AM on May 24, 2012 [5 favorites]


This decision was meant to keep college students from going into credit card debt they could not afford to pay off but it also has the consequence of disenfranchising stay-at-home parents

Is this what motherfucking DISENFRANCHISE means now? Not being able to get a credit card? That word means not being able to vote, it does not mean that you can't carry out routine unsecured lending as part of your daily activities.
posted by atrazine at 10:41 AM on May 24, 2012


Well, if the bank wants to give people with little to no income stream a credit card for the purposes of that person racking up loads of debt I'm all for it.

Oh, wait, the bank also wants that person to pay it off piecemeal forever? Well, then hell no, go find your debt bondage fix somewhere else Capital One. Or better yet, make the 'fix' for the law something that well and truly hoses the bank at the benefit of the 'financially disenfranchised' (if you can even figure out what that fucking means).
posted by Slackermagee at 10:50 AM on May 24, 2012


Oh, one last thought. You know what happens when one half of a married couple can rack up $40,000 of debt on multiple cards without their partner knowing because their 'entitled' to it?

Divorce.

Not that its happened to me, I just get to hear about it twice a day from the woman behind me whose husband did this. There's not a terribly easy way of (knowing whether) fixing the law here (is even required).
posted by Slackermagee at 10:53 AM on May 24, 2012


The prevailing sentiment seems to be that "charity and other non-profit sources" should take care of the indigent. What people don't seem to realize or care about is that this same sentiment is the justification used by Congress to go after the safety net that provides these resources.

I specifically mentioned government programs in the comment you quoted. My point is that counting on Bank of America or JPMorgan Chase to be the safety net for people who don't have the money they need makes significantly less sense than counting on charities, non-profits, and government programs. Payday loans for instance can certainly help low income people who need money right away in certain circumstances, but I think the overall system does far more harm than good and the usurious rates that keep them in business should be outlawed.
posted by burnmp3s at 10:55 AM on May 24, 2012 [2 favorites]


Banks suck.

Right now I'm unemployed. I have a Visa credit/debit card through my credit union in my name. It enables me to purchase plane tickets and book hotel rooms, use as a second ID, etc. but works on what amount is in the checking account. If I have a flat tire or some other emergency traveling that would max out my account, a call to the credit union will give me leeway to overdraft without penalty until the next payday when my husband's paycheck goes in. Not truly a credit card as such, but accepted in places where a card is asked for. I don't want to go into debt, but many times not having a credit card is a liability.

This doesn't address the issues of abusive relationships, but it is possible for a non-working spouse in a 'normal' marriage to get a debit card that can work like a credit card.
posted by BlueHorse at 11:03 AM on May 24, 2012


You don't have a credit card, you have a debit card. That is not what this article is about. You don't need credit to get a debit card, just a checking account. The features you describe are no different than the ones you could get at any bank. The only exception is the no-fee overdraft policy which varies a little by bank.
posted by VTX at 11:10 AM on May 24, 2012 [1 favorite]


When the authors of legislation argue that the legislation is being misapplied, that is not astroturfing.

This is a distinct issue from McCall's recent petition, which is the subject of the post. Also, you're confusing the CFPB and the FRB. The CFPB did not write the rule nor is it actively defending it. It's sort of stuck with it while burdened with a ton of other pressing issues. To my knowledge, it hasn't done anything for or against it.

Importantly, Malone and Slaughter are politicians and being somewhat disingenuous. Section 109 of the CARD Act is clear:
‘A card issuer may not open any credit card account for any consumer under an open end consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the ability of the consumer to make the required payments under the terms of such account.’
The provisions regarding college students are found elsewhere, in sections 303-305. If Slaughter didn't want to harm stay-at-home parents, she could have explicitly included household income. She didn't. As I said above, I think the CARD Act's disparate components should be read together, but not to mean that 109 is meaningless. Rather they should be read to mean that the bill intentionally set out to restrict credit in multiple ways.

Now the FRB interpreted this language to mean that a bank ought to consider individual income, as opposed to household income. I'm not sure I agree and perhaps advocates who want that small change made are correct. If the change is made improperly, however, it would imply that roommates can consider each other's income, that live-in relatives and others may consider that income, etc. Which is not really the goal of the CARD Act.

So maybe the CFPB will find the time to make the minor changes needed to improve the language a bit to address some of these concerns. Which may be nice, but it's unclear to me that anyone is affected. After all, McCall couldn't produce a single consumer harmed by this, other than herself, when she intentionally tried to get rejected knowing what the law is.
posted by allen.spaulding at 11:11 AM on May 24, 2012 [1 favorite]


There are also credit cards with low limits; I don't understand why everyone assumes these (mainly) women would run up thousands of dollars in credit card charges and never have a way of paying them back. I didn't have a credit card as a student, just a Visa debit card, and it was really hard sometimes to do things like get plane tickets or even stupid things like renting snowboarding equipment, because they wanted to place a $500 hold on my account, which was just beyond what I could have handled for a week. I had to have my parents send in a fax once with a credit card as a hotel where I was booked by a friend would not even let me check in without one, as they wouldn't accept debit cards as a security measure.

Being without a credit card is sometimes a very large logistical problem in America, as is being without a solid credit score or credit history, and it seems like for certain people, this act is a new issue. Perhaps changing it to household income would solve many of these problems. I am quite sure there are ways of mandating it so that it wouldn't be a roommate's income, though presumably there are cases where a blood relative with money would be willing to support a caretaker or family member's credit.
posted by jetlagaddict at 11:14 AM on May 24, 2012 [4 favorites]


This doesn't address the issues of abusive relationships, but it is possible for a non-working spouse in a 'normal' marriage to get a debit card that can work like a credit card.

I don't think this law has any effect at all on the issuing of debit cards—even debit cards with overdraft protection.
posted by enn at 11:20 AM on May 24, 2012 [1 favorite]


Perhaps changing it to household income would solve many of these problems. I am quite sure there are ways of mandating it so that it wouldn't be a roommate's income, though presumably there are cases where a blood relative with money would be willing to support a caretaker or family member's credit.

The only way this really makes sense is if the person with income cosigns though. If nobody other than the person who doesn't have any money signs up to repay the loan, the bank doesn't have any legal right to actually get the other person with money to pay. If someone's income is being considered as part of the reason why someone is being offered the loan, then it makes sense that the person should either explicitly or implicitly be included in the actual loan agreement as being obligated to pay the loan.
posted by burnmp3s at 11:46 AM on May 24, 2012


allen.spaulding, I wonder whether you might be willfully overlooking my point, which is that McCall's petition is only the latest effort in a series of efforts to overturn this rule. Efforts to protect stay-at-home parents from being denied credit under this rule began almost the moment the bill passed and have continued unabated for years. As I said, I have no doubt that industry is willing to take advantage of this controversy to try to discredit the CARD Act as a whole -- which I think is bad, because I think most of the CARD Act is good. But opposition to this particular implementation of the act is widespread and existed before Holly McCall's involvement, and the fact that Holly McCall used to work for a financial institution does not mean that everyone protesting this rule has ulterior motives. In fact McCall is pushing her petition through MomsRising, which also supports an increase in the minimum wage, universal health care, paid sick days and paid parental leave for all, and advocates for tighter environmental regulations. They are hardly a pro-corporate organization.

I have yet to see your proof that "consumer groups support," this specific use of the CARD Act to deny credit to SAH spouses. Please link to your evidence. I would genuinely like to see it.
posted by BlueJae at 12:35 PM on May 24, 2012


I don't understand why everyone assumes these (mainly) women would run up thousands of dollars in credit card charges and never have a way of paying them back.

Because it happens to millions of people every year? Even those who actually have a regular income?
posted by straight at 1:33 PM on May 24, 2012


BlueJae - I linked above to two of the largest, most prominent, and best respected groups supporting the law (and at least one directly opposing McCall).

Nobody will ever come out and say that this individual application of the rule is good, but rather than the rule is good in spite of unintended consequences. And that's what Slaughter and Maloney are really arguing, that they didn't intend for this to be the outcome. They clearly intended to restrict credit to some consumers, but maybe not these ones.

And I agree with you that there are significant advantages for stay-at-home parents in difficult situations to need access to their own credit card and not necessarily be an authorized user or on a joint account, although I think you're overstating the case. I also think that very few people in those situations are actually hurt by this rule. Why? Because they put down household income when applying, even if the prompt says individual. That's how people think. When stay-at-home parents think about income, they often think about household income, especially if they have a role in budgeting. So I don't think it's a huge stretch to think that they put that number down, esp when it's super obvious that it's advantageous to do so. I wish Holly and Mom's Uprising could actually point to people who got hurt by this provision - but so far they haven't. Their only example is Holly herself, who went out of her way as a stunt.

I also want to point out that anticipated "fixes" to this problem may very well be illegal. Banks cannot discriminate against married or unmarried couples. That's a core provision of the Equal Credit Opportunity Act and Reg B. So if we want to allow stay-at-home parents to include household income, so too do we need to include roommates. There may be some subtle ways for regulators to write this, but that's a costly proposition. It'll take a lot of time and effort from overburdened CFPB staff. And I'm sure industry lobbying groups know that.

Capital One and the financial industry would love to bog down the CFPB will pseudo-controversies like this, that take up time and energy. They also love the narrative that the Obama administration hates stay-at-home parents. Mom's Rising apparently decided to support this narrative although who knows what deals were struck. I wouldn't be surprised to find out that there's some bizarre funding going on here. If there were strong evidence that this was affecting many people, I would be strongly advocating that the CFPB address the issue. In the absence of data, this reeks of a well-funded astroturf campaign. And that's probably why CRL and NCLC have staked out the positions they have.
posted by allen.spaulding at 2:00 PM on May 24, 2012


Financially disenfranchised is totally a thing, you guys! After all, the supreme court just recently declared money to be free speech. So it is vital that we all have rotating loans so we can express ourselves.

It's what Thomas Jefferson would have wanted.
posted by mccarty.tim at 3:50 PM on May 24, 2012 [1 favorite]


I am a stay-at-home mom. I have a credit card. (More than one!) I do not run up debt. I use it to buy groceries and pay it off at the end of the month. My credit report is pristine. I am not, contrary to what a lot of posts in this thread suggest, a FUCKING MORON.

I have managed the finances in my household for 10 years now, since before I became a stay-at-home parent. Each time before I went to the hospital to have my children (both at the end of the month), I arranged for the monthly bills to get paid while I was giving birth and recovering. My husband hasn't paid a bill in 10 years. I don't think he knows the name of our water utility.

You know what's aggravating, stupid, and wasteful? When I'm just an "authorized user" on our cell phone account and for me to turn on international calling for my cell, to call a siblings overseas, it takes three phone calls over two days, because I am not allowed to authorize my own overseas calling. It requires the "account holder." Can there be joint account holders? No, not for the cell phone. There is a primary and a secondary. Many credit cards, even when it's a "joint account," assign one user as the primary and other users as "authorized." Frequently when I have to deal with customer service, I have to make a bunch of calls, and then my husband has to give up an hour of his day to sit on hold to eventually get a human to fix something he knows nothing about, because I'm the one that does it. But hardly any companies truly allow married couples to hold something "jointly" these days -- they want a primary account holder and a primary access.

I'm the CFO of this venture. I'm an adult who's had a credit card for 15 years and never missed a payment. It shouldn't take hours and hours out of my husband's life for me to get a credit card, deal with a joint credit card, or otherwise manage my family's financial life.

I almost don't even care if they just make a type of account called "really a joint account, not just in name." I should be able to run my family's financial life. It's a continual low-level aggravation. The only companies that act like we're "really" married are the health insurance, car/home insurance, and credit union. The rest treat me like a minor and refuse to deal with me.

A friend of mine who is a stay-at-home mom with a family income over over $100,000 a year was just rejected for a credit card. For having no income. Her husband doesn't really want to take time out of his 80-hour work-week to deal with getting her one, either.
posted by Eyebrows McGee at 4:04 PM on May 24, 2012 [6 favorites]


My income dropped drastically last year because I had a baby, and was recently denied a credit limit increase, despite my excellent credit score and the fact that I've never once failed to pay the balance in full.

It seems to me that the original intent of the law was to protect people who were too young to know how to handle their finances (college students). Lumping grown women into that group just because we're taking time off to raise children seems a bit condescending. Are we saying that SAHMs are more susceptible to predatory lending, or less financially savvy than others? If not, I call shenanigans.
posted by snickerdoodle at 6:40 PM on May 24, 2012 [3 favorites]


I am not, contrary to what a lot of posts in this thread suggest, a FUCKING MORON.

Who in this thread has suggested this? Please point them out. I'm not seeing it.

What I am seeing here is people like yourself buying into this narrative that all of this is about feminism, or female empowerment. It's not. This is about a few basic, uncontroversial, and I would go as far as saying incontrovertible facts:

First: if you do not have any means of income, you are a bad candidate to take on debt or credit without a co-signer. This is true no matter who you are -- stay-at-home spouse, college student, out-of-work person, etc. It has absolutely nothing to do with gender. It has everything to do with the fact that people who lack steady income are significantly more likely to fall into the trap of perpetual revolving credit.

Second: even if you have income, the assessment of your ability to service it should include an accurate appraisal of your income. That appraisal should be of only the income of those actually involved in the contract. Saying "I make $X a year, but someone else I'm related to makes $Y, so you should presume my ability to service debt is based on $X + $Y income" is completely nonsensical. If that income is to be included in the assessment, the person whose income it is should be part of the contract, with full liability.

Third: credit card companies would like nothing more than to increase the number of consumers who have a credit card, hold a balance, can make the monthly payments, but cannot ever hope to truly pay off the debt without limping along at minimum monthly payments until they've paid many times over the credit that was extended to them.

Nobody here is saying "oh, the CARD act is great because women are terrible at finance!", or, "Thank god, the last thing I want is women borrowing money without the approval of their husband!". They are saying (or at least, I am saying), credit card companies should not be allowed to entice people with credit offers that the company should reasonably know they cannot repay without serious hardship, and years of effective debt slavery. It is irresponsible, it is predatory, and it is the farthest thing possible from "empowerment".

My income dropped drastically last year because I had a baby, and was recently denied a credit limit increase, despite my excellent credit score and the fact that I've never once failed to pay the balance in full.

Your income dropped. Therefore, your ability to repay credit extended to you has diminished. Thus, you cannot get an increased credit limit. This is not "lumping you in" with children, as if you aren't savvy. This is assessing your ability to repay debt based on your assets and income.

Credit is not a right, and it's not based on goodwill. It is based on an actuarial assessment of your ability to pay back what has been extended to you. "I've always been great with credit" is not a valid reason for a company to ignore "... but my income significantly dropped".
posted by tocts at 6:47 PM on May 24, 2012 [4 favorites]


"Your income dropped. Therefore, your ability to repay credit extended to you has diminished."

But her husband's ability to pay hasn't gone down due to his increased support obligations?

Because let's not kid ourselves, the working parent has the SAME INCOME spread over the SAME DEPENDENTS as the stay-at-home parent, and if they got divorced, the working parent would have support obligations.

But the working parent's creditworthiness doesn't go down when parent #2 stops working to raise the kids even though his expenses have gone up and his family income has gone down, and even though the working parent clearly now has long-term support obligations that he (or she) didn't have before.

Or, if both parents remain working and they now pay more in childcare costs every month than the second spouse earns, and the family's income would be higher if the second spouse stayed home (a very common scenario!), why should their creditworthiness remain the same if both parents keep working?

Look, a lot of these questions hinge on whether a married couple have special rights in each others' lives, such as the right to make medical decisions for one another, or are just two people who live in the same house. The law in the U.S. has long been the former, that marriage is not just another contract or just another relationship; it's a specific thing with specific rights. I mean, there's a nationwide struggle to ensure marriage rights for same-sex couples exactly so they have access to these rights of marriage!

"They are saying (or at least, I am saying), credit card companies should not be allowed to entice people with credit offers that the company should reasonably know they cannot repay without serious hardship, and years of effective debt slavery."

Not one of these things applies to me.

"It is based on an actuarial assessment of your ability to pay back what has been extended to you." and "if you do not have any means of income, you are a bad candidate to take on debt or credit without a co-signer."

Obviously not, as a stay-at-home parent with a high spousal income is in a significantly different position than, say, an unemployed single person. It is CLEARLY NOT TRUE that stay-at-home moms are generally bad credit risks; they are significantly SAFER credit risks than many other segments of the population (married women and parents are generally). The industry operated well under the assumption that married, stay-at-home women were adults with access to shared family income for decades, and married women have been excellent credit risks for all that time. Is it your contention that in the last year, suddenly non-working married women across America have become deadbeats? Or that every credit card company in America has suddenly changed its risk assessment algorithm in exactly the same way and discovered that women are terrible risks?

Or is it just possible that people are interpreting a law clearly meant to restrict college students' access to unsupported credit in a way not contemplated by the legislative drafters?
posted by Eyebrows McGee at 7:14 PM on May 24, 2012 [1 favorite]


You (and the young rope-rider) are both effectively making the argument that if it helps any woman anywhere possibly get out of a bad relationship, it must be an unqualified good. I'm sorry, but I really cannot agree with that. There are a lot of potential changes to the law that you could argue that might maybe, some day, in some small number of instances make it easier for a woman to leave an abusive relationship. That doesn't mean the side effects of that change can be thrown aside and ignored without question. It also doesn't mean that we who disagree with such a change lack empathy.

No, I am actually not making that argument. I am qualifying one point within a larger discussion, which is that the CARD act does carry some non-trivial ramifications for people in certain (depressingly common) vulnerable situations. I didn't accuse anyone of lacking empathy. This is not a zero-sum game. Acknowledging some concerns does not mean that I agree with all stated concerns.

Do you not believe that women's shelters exist? Do you not believe that they can and do arrange transportation for new residents? I don't understand your argument here.

Well, I guess we're even, I don't understand your argument either. Denying credit doesn't automagically deliver funding to women's shelters, and the reality of needing cash to get out of your house doesn't equate to an assertion that women's shelters are mythological. See also "this is not a zero sum game."
posted by desuetude at 11:20 PM on May 24, 2012


But the working parent's creditworthiness doesn't go down when parent #2 stops working to raise the kids even though his expenses have gone up and his family income has gone down, and even though the working parent clearly now has long-term support obligations that he (or she) didn't have before.

Yes it does. Even prior to CARD, if your household income went down because your spouse left the workforce, and you actually told the credit card company about it, they would re-assess how much debt they felt you could carry and still be a good risk to them, just like they do when first issuing a card. The fact that credit card companies aren't very diligent about doing these re-assessments for existing customers is a separate issue, but if they find out about the change, they absolutely are going to account for it.

The only thing CARD changes in this regard is that now, if you're going to apply for a credit card and claim a spouse's income (or parent's income) as being relevant to your ability to repay the credit card company, that person has to actually know about it and sign on for full liability as well. Either way, pre- or post-CARD, if the income that was accounted for when you applied for a card changes, the credit card company cares, and may as a result choose to not raise your limit (or may lower your limit, or even cancel your card).

Not one of these things applies to me.

Everyone who uses credit cards is aware of the fact that some people get into serious financial trouble with them. Despite that, pretty much nobody who has ever gotten into serious problems with them ever believed that they would be the ones to do so. Many of them don't even believe it after it has already happened.

This law is not about you specifically. It is about consumers in aggregate. Arguing against a consumer protection law on the basis that you personally are too smart and too financially astute to need such protections is not persuasive.

Is it your contention that in the last year, suddenly non-working married women across America have become deadbeats?

No. It is my contention that up until CARD, credit card companies have been able to make loans that, in a vacuum, were bad risks, but due to social factors the risk was being shifted from being their responsibility to being the responsibility of those who weren't even necessarily aware of the transaction.

None of this is to say that this applies to you personally, or even a large percentage of stay-at-home spouses. Again, this law is not about you personally. It is about consumers in aggregate. Yes, many people worked within the old framework without falling into the trap of predatory lending. But for those who did fall into that trap, the consequences were very bad. This law helps to prevent such cases from happening, by forcing credit card companies to honestly assess whether all parties involved in taking on credit can pay off the debt they are incurring, without having to endure serious hardship or put immense strain on their family.

... the CARD act does carry some non-trivial ramifications for people in certain (depressingly common) vulnerable situations.

Again, if the goal is to help vulnerable spouses, you should be pushing for initiatives that are designed to do so. Depending on a good side-effect of otherwise unrelated bad law to accomplish your goal is always going to be a tenuous thing, and there is always going to be a risk of that side-effect going away.
posted by tocts at 6:14 AM on May 25, 2012


Is there any legal framework for married people to obtain credit or assents that're walled away from their marriage's communal assets?
posted by jeffburdges at 6:56 AM on May 25, 2012


Not having a credit card is very limiting -- and people should be able to get them.

No. Not having a charge card is limiting. All the things that people tend to point out as reasons for "needing" a credit card are really reasons for needing a charge card. Booking hotels, airline tickets, etc. But the line of credit is where things get very dangerous, and it's unfortunate that it's so hard today to get a charge card that doesn't come with the ability to have a month-to-month balance.

The transactional credit provided by no-rolling-balance charge cards is very handy stuff. You can make purchases at a distance, or provide a way to prove ability to pay (letting a merchant take a hold) that would be difficult with cash. In previous generations you could do some of the same things with paper checks (and checks have the same sort of implied transactional credit, in the 'float'), but now that paper checks are declining in popularity we need to make sure that everyone can still get to some basic form of transactional credit.

Rolling balances though, which are subject to compound interest, are dangerous as hell, and I don't see any unfairness in restricting their availability to only those who have a well-defined income and thus means of paying them off. It's unfortunate that the banks have managed to convince everyone that they really need a rolling-balance line of credit (in part by making debit cards subject to different fraud provisions), when what most people need is just a charge card.

If I had a magic wand, the easiest solution to this problem would be to require any company offering rolling-balance cards at above the prime interest rate to also offer a no-annual-fee charge card (30 days from statement close terms, etc.). The banks would scream, and it could rightly be perceived as an indirect tax on credit cards, but it seems very worthwhile as we move towards a cashless economy to make sure everyone can participate.
posted by Kadin2048 at 9:02 AM on May 25, 2012 [3 favorites]


3.) Having credit in your own name does far more to build your credit history than being listed as an authorized user on someone else's card.
So long as you don't fuck it up, which will make things even worse.
What alternate Congress in what fantasy version of the United States is going to pass this hypothetical law?
The one that already passed the, a href="http://en.wikipedia.org/wiki/Violence_Against_Women_Act">violence against women act that already spends a billion or so a year for things like women's shelters?
Being without a credit card is sometimes a very large logistical problem in America
Not if you have a debit card, which works exactly the same way, except with cash you already have.
I am a stay-at-home mom. I have a credit card. (More than one!) I do not run up debt. I use it to buy groceries and pay it off at the end of the month. My credit report is pristine. I am not, contrary to what a lot of posts in this thread suggest, a FUCKING MORON.
That's nice. But you're also not in an abusive relationship and need to leave. If you were, how would you pay them back each month?
But her husband's ability to pay hasn't gone down due to his increased support obligations?
Right, but if you based someone's credit-worthiness on their husbands income, they would not be financially independent and worse, their credit worthiness would drop if they ever left him, so the banks could cut her limit or drop her if she did leave.
Or, if both parents remain working and they now pay more in childcare costs every month than the second spouse earns, and the family's income would be higher if the second spouse stayed home (a very common scenario!), why should their creditworthiness remain the same if both parents keep working?
Well, upthread people were talking about women who were in abusive relationships and had to leave. If that was the case, the woman wouldn't be able to continue make payments if the husband cut her off, or if she left.

What you're talking about seems to be what the credit card companies actually want as customers - women who are in good relationships who will be paying back their credit cards with their husband's paycheck. But that doesn't seem like financial 'independence'. Why not just get a checking account and debit card, and have him put money in that account for you each month?
posted by delmoi at 1:56 AM on May 27, 2012


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