Think all of the wrinkles have been ironed out in the 2009 CARD Act? There’s one section that is finally beginning stir interest and you might be shocked to learn what it is.
I Do, but You Can’t
Anyone over the age of 50 can probably relate to the way things once were in the credit industry. No job meant no possibility of getting approved for that American Express or Visa card. It’s simply the way things were before the 1974 Equal Credit Opportunity law was passed.
Then, the dynamics began shifting a bit. Through the 1980s and 1990s, one’s income was really more of a “household” income vesus an individual’s income. This allowed spouses who stayed at home to raise families and tend to housework the opportunity to maintain a credit history. As long as the household income met the criteria and as long as an applicant’s credit was strong enough to warrant an approval, odds were, a credit card was sent right away to an unemployed person (again, usually a spouse).
Now, though, it’s almost as though the Equal Credit Opportunity Act is irrelevant because part of the new laws seem to be overtaking those strides made on all things financial- and credit-related. It’s actually quite similar to the old saying of “taking one step forward and two steps back.”
Are We in the 1950s?
Here’s where it really gets interesting. Let’s say the missus goes to work each day while you’ve been extended a golden opportunity to stay home with the kids. And, then, let’s say you wanted to apply for a new credit card because of its balance transfer option.
You may be the one who handles the family finances, so it would stand to reason that if a new credit card offer could save money over the course of the year – naturally you want to consider it. Here’s the kicker: you won’t be able to move forward unless you have your wife’s permission to do so. She doesn’t need yours, though, if those paychecks that cover the mortgage, school clothes, groceries, etc. have her name on them.
There are so many things that could drastically affect a non-working spouse’s situation. Domestic violence (women are often encouraged to cover their financial basis as they plan to escape an abusive home), divorce and even death of the working spouse can leave those who haven’t had the benefit of a paycheck in a precarious state.
Ideally, the authors of this law will soon see the significant repercussions that could result from a consumer not having access to credit. While the goal was to reduce the potential for fraud, it seems this aspect really missed its mark. Until things change (if they change), there are sure to be thousands of Americans who learn the hard way that while their value at home might be immeasurable, if it’s not memorialized on a pay stub, it simply doesn’t count.