CFPB Will Review Whether Stay-at-Home-Moms Can Get Credit Cards
Here’s another interesting story from our friends at Business Insider. Check it out:
More than a year ago, the Federal Reserve decided consumers over 21 would only be able to apply for credit using their personal income rather than that of the entire household.
The clause was supposed to prevent college-aged students from taking out lines of credit based on their parents’ income, but it basically elbowed stay-at-home parents out of the credit game altogether.
With no tangible income to report on loan applications, homemakers are effectively denied credit before they even apply, unless they get a spouse to co-sign. The impact on women has been undeniable, as they are 30 times more likely than men to stay at home.
“It’s 2012 and I have to ask my husband to get my own credit card,” stay-at-home mom Holly McCall said in a statement Tuesday. “I make 95% of our household purchases, and have a nearly perfect credit score but under these new rules, my application for a credit card is denied.”
(Last year LearnVest ran a story on the issue, which inspired heated debate among readers about whether this was fair.)
McCall launched a petition against the law on Change.org, which has garnered more than 33,000 signatures that she hand-delivered to the CFPB‘s front door Tuesday morning. The movement’s been backed by womens’ rights organization Moms Rising.
So far, the CFPB has agreed to review McCall’s petition and the law itself, according to a Change.org spokesperson. A CFPB spokesperson could not be reached for comment.
“Denying someone a credit card because that person is a stay-at-home parent devalues the work of raising and caring for children and that person’s worth as a partner,” MomsRising Executive Director Kristin Rowe-Finkbeiner said in a statement Tuesday. “This radical shift in policy–considering individual income rather than household income in granting credit–does nothing to help credit card companies assess credit-worthiness and everything to harm moms or dads who don’t earn income.”
First and foremost, women (and men) should build their own savings account outside of any joint account. Another strategy is to beef up your credit score by taking out a joint loan with your partner. On-time payments will benefit both your credit scores.
If those options aren’t available, consider a secured credit card. “Secured or pre-approved cards often come with annual fees, and you need to post a security deposit that’s usually at least $200,” she says. “However, you’re more or less guaranteed to qualify, and you can use a secured card to move onto unsecured ones.”
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