Does the Card Act discriminate against stay at home moms and dads?

Credit cards are often regarded as a necessary evil. They can cause personal financial strife, but most agree that everyone should hold at least one credit card, even if only for emergency purposes. Still, there is no doubt thet credit cards were partly responsible for the financial crisis of 2008 that continues to this day and the severity of this crisis prompted the U.S. Congress to pass the CARD Act. Immediately signed into law by President Obama, this act was celebrated as a much- needed protectionary plan that would force credit card companies to treat their customers more fairly and without as much deception.

 The CARD Act was heralded as a victory for the consumer, but regardless of how much praise the act has received, there is one part of the measure that receives little attention but deserves more. According to the new rules, a stay at home mom or dad can no longer claim their spouse’s income to apply for and receive a credit card. They can only claim their own, and that means they will no longer qualify for credit- a fact that has many stay at home mothers and fathers demanding new reforms.

 When the CARD Act and its provisions were originally drafted, it was assumed that limiting credit to one’s own income would not be an important issue. Spouses could still get a credit card issued jointly to both, so a stay at home mom or dad would not be left out in the cold without the security of a credit card. Still, some say this provision of he CARD Act is unfair and even potentially dangerous. What if a woman is in an abusive situation and needs her credit card as a means of escape? Without her own credit card in her own name, the other spouse could quickly cancel the jointly held card and the victim of abuse would have no means to obtain credit. Even in the absence of danger, many argue that it is still important for the stay at home spouse to obtain his/her own credit for independence reasons.

Is the ability to obtain credit really that important or necessary for a stay at home mom or dad? There are certainly those who believe it is and some have already taken action to initiate reform.  Holly McCall, a Virginia stay at home mother of two, has started a petition to reform the CARD Act on the web site and U.S. Congresswoman Carolyn Maloney (D- NY) urges changes in the law to protect stay at home moms and dads who want to maintain their independence. The ability to obtain credit, they argue, is fundamental and to deny this access is to rivert back to the outdated policies of the past. Furthermore, proponents of reform argue that a stay at home spouse should not be penalized for making a personal sacrifice in favor of raising children.

The CARD Act has made life easier for credit card holders in multiple ways. Credit card issuers must now disclose payoff information on every credit card statement, end certain marketing practices to students, mail statements well in advance of due dates, and make other reforms intended to help the consumer. Lost in all of this is the provision on credit access for the stay at home parent, but there are many individuals fighting for reform. Without it, a stay at home mom or dad will be without the ability to obtain individual credit and will remain at the financial mercy of his/her spouse. Considering the high divorce rate and other social concerns, this reform deserves some immediate attention and with the grassroots movement and political support from U.S. Rep Carolyn Maloney, changes to the CARD Act, for better or for worse, may be just around the corner.


Guest post courtesy of Bryan Carey, Houston Finance Examiner and co-author at Money Saving