Stay-at-home parents shut out of credit card market

Array of credit cards

If you’re a stay-at-home parent or spouse who relies on your partner’s income for financial support, a recent rule created as part of 2009’s Credit CARD Act could make your life a lot more difficult.

Last March, the Federal Reserve pushed credit card issuers to use only an individual’s own income when applying for a card, rather than referring to household income, which was previously the norm.

Although some companies have been holding off on implementing the stringent new policy, all credit card companies must begin following the new rules as of Oct. 1.

So if you’re a stay-at-home parent or nonworking spouse, what does that mean?

Before the law went into effect, you could have used your partner’s income to demonstrate your ability to pay your bills.

That’s no longer the case.

You’ll need to show that you’re capable of paying the balance with your own income, which is likely minimal or nonexistent.

Essentially, that means you’ll have no chance of qualifying for a credit card if you wish to open a new account. Instead, you’ll need to open a joint account with your working partner, which will make it more difficult for you to build your own credit history.

Worse, what if you and your partner split up?

In addition to the challenges of dealing with a divorce, you’ll have extremely limited access to the credit you may need to help you start over.

Of course, the goal of the CARD Act is to protect consumers from getting over their head in debt. On the surface, it makes sense to limit credit access for people who don’t have their own sources of income.

Yet, rather than empowering consumers, this ruling serves to enforce limitations that will make it more difficult for stay-at-home parents to care for their families.

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