When stay-at-home mom Holly McCall’s application for a Target credit card was denied last fall despite the fact that she has a high credit score and a household income that exceeds $100,000, she was outraged. McCall was shocked to learn that she and many others that do not work outside the home are ineligible to open a line of credit due to a Card Act Rule that took effect last October.
The new regulation requires that card issuers do not consider “household income” when determining who should be allowed to open an account; applicants must have an income of their own. This means that stay-at-home parents who do not collect a paycheck can only open a joint credit card with their spouse.
McCall, who began an online petition against the Card Act that currently has over 35,000 signatures, told the Huffington Post that she believes the new law is “demeaning” as it requires that she ask for her husband’s permission to acquire a credit card.
A quick scroll through the comments of McCall’s online petition reveals that many women believe this law is a personal attack on their independence, that it minimizes the significance of their role in the home, that it devalues the work that they do in providing care for their children, and that it calls into question a woman’s ability to make financial decisions.
I must admit, I am a little surprised that so many people agree with McCall’s assessment of the act as “demeaning.” In my opinion, it is a good business practice to abstain from loaning money to an individual (that’s any individual, not just stay-at-home mothers) that does not have the means to pay the money back.
I assume that had McCall been issued a Target credit card, she would pay the bill with her “household income” and, in my opinion, it is not absurd to ask that her husband be made aware of, and in doing so assume responsibility for, the debt that could be incurred on the card.
Assuming that the unemployed spouse is a joint account holder and not an authorized user, both parties are still able to establish a (hopefully positive) credit history under this regulation. The only way I can surmise that this law would infringe upon the rights of a stay-at-home parent is if they were attempting to open a line of credit they wanted to keep secret from their spouse, which calls into question whether that person is responsible enough to have access to credit in the first place.
Given the economic crisis we’ve found ourselves in over the last few years due in large part to risky lending practices, I find it pretty ridiculous to expect that regulations be changed because people don’t want to have to ask a spouse to co-sign with them to open a credit card.
Recently, McCall and a dozen other protestors delivered her petition with signatures to the Consumer Financial Protection Bureau in Washington, D.C.
“It’s about fair and equal access to credit,” said McCall.
But isn’t it fair to ask that anyone asking for a loan have the personal means to repay it?
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