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New Credit Card Rules Shun Stay-at-home Moms

stay at home moms

I was raised by a full-time mom. She was incredible. In fact, my Dad used to always say that she deserved a salary much higher than his for all she accomplished around the home.

Of course, that doesn't mean he put her on payroll, but she always had what she needed to spend on food, the kids, and herself. His income was her income, and that worked for us, as it does for millions of other families.

Credit issuers would refer to my mom's income as "household income", or the total income of both working and non-working members in the family. In the past, that's the number credit card companies asked for when reviewing credit card applications. However, the Fed suggested late last year that credit issuers start looking at "individual" income instead of "household" income in order to avoid granting credit to individuals (primarily students) that would run up thousands in debt and have no ability to pay their bills.

The new rule has sparked a great deal of controversy lately because it seems to have created an unintended victim: the full-time mom, or in some cases the stay-at-home dad. The main question that arises is if you're a stay-at-home mom that pays your bills, should you have the same ability as your working spouse to apply for a credit card in your name and get approved? After all, household income is generally accessible by both adult members of a household.

Based on the new credit card rules, you wouldn't have that ability. The co-signature of your working spouse would be required to receive approval for any credit card since you technically have no individual income at all.

U.S. Rep. Carolyn B. Maloney, D-N.Y., one of the driving forces behind the Credit CARD Act of 2009, has even criticized the Fed and said "Women have worked hard over the course of my lifetime to establish financial independence. If a stay-at-home mom, who's often the one who controls the family finances, cannot easily obtain a credit card in her own name, then that would be a step backward."

So, do you agree with Rep. Maloney? Or do you think stay-at-home moms should be required to obtain co-signatures from their working spouses for all credit applications?

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Joshua Heckathorn's picture

Joshua Heckathorn was President of Creditnet, is a credit expert and has been featured on CNNMoney, FOX Business, Yahoo Finance, The Street, and many other national publications during the past ten years.  He received a Bachelor of Science in Management (Finance) from Brigham Young University's Marriott School of Business and earned his MBA from Seattle University.

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