Stay-at-Home Spouses Face Credit Restrictions

[Kathie in VA]

"... The Federal Reserve's clarification of CARD Act rules requires credit card issuers to consider only the applicant's income—rather than the household's income—when opening a new credit card account or increasing the borrowing limit on an existing card. ...

 

...A stay-at-home spouse who wants to safeguard credit access might want to open an individual credit card account before the new rule takes effect on Oct. 1, 2011, according to Mike McLain, assistant general counsel for the Credit Union National Association (CUNA), Madison, Wis...."

 

Here's the whole article:

http://hffo.cuna.org/13590/article/3288/html

[gardening momma]

If you want the household income on the application, then you would put both people on as applicants. We only put dh on as an applicant, and myself as a cardholder. My credit might get us denied. :D (plus I have no income, so I can't help get us approved anyway)

[ThatCyndiGirl]

If a divorce or separation occurs the spouse's income wouldn't be counted, though, right, unless one spouse lucks into alimony? I know VERY few people who get alimony/palimony, so the new rules make sense in that light.

[cathmom]

The point was to have one's own credit card. Of course you can put both people as applicants, but it's good for the SAH spouse to have their own that the other spouse can't touch JIC.

[gardening momma]

The point was to have one's own credit card. Of course you can put both people as applicants, but it's good for the SAH spouse to have their own that the other spouse can't touch JIC.

I guess that would depend on how you handle finances in your house, what you expect that JIC to be, and if you expect JIC to actually happen.

[Chris in VA]

If you want the household income on the application, then you would put both people on as applicants. We only put dh on as an applicant, and myself as a cardholder. My credit might get us denied. :D (plus I have no income, so I can't help get us approved anyway)

 

Same here.

[Hannah C.]

I'm glad I got my credit cards before this rule went into effect. I'm a stay at home mom right now, but my credit has been much better than DH's in the past, thanks to how the timing worked out.

[arstephia]

The "just in case" does not have to been a seperation/divorce. My friend's husband died suddenly and somehow all the credit cards were closed within days of his death. She had not notified them, but somehow they all knew and they were closed and she could not use or access them because she was not the primary card holder. She had a hard time getting her own card because she had been a SAHM for years. She advised us all to get a card in our own names "just in case" something happened to our husbands and we needed to have access to credit.

[jewellsmommy]

I think this is wrong. As a stay at home spouse, I do contribute to the household and to the income that dh earns. His income is also my income. I think it is good for the stay at home spouse to have established credit in his/her own name. You never know when something might happen to your spouse.

[Gailmegan]

I guess that would depend on how you handle finances in your house, what you expect that JIC to be, and if you expect JIC to actually happen.

 

Besides the death of a spouse (as mentioned by OP) one must consider the implications of this rule wrt domestic abuse. Quite often the abused spouse is cut off from the outside world with no income except what the abuser permits. This new rule would make it even harder for an abused spouse to escape.

[Plucky]

No, I don't think that is right. Dh's income is also mine. I do have credit cards in my name only and I am responsible with them.

[Crimson Wife]

What about those of us who live in community property states? By law, 50% of what my DH earns while we are married is considered mine.

[Plucky]

And how is this going to affect our credit rating? I have slightly better credit than my dh. I don't want to lose that.

[Plucky]

What about those of us who live in community property states? By law, 50% of what my DH earns while we are married is considered mine.

 

It looks like those of us in community property states won't be affected. That is good.

[BamaTanya]

It is ironic to me to think in these terms.

 

 

When we married, I was the major breadwinner as dh was just out of college and there was a state hiring freeze in his field. I worked him through grad school while we had one and then two little ones.

I quit work for 9 years. I now work part-time.

I have always paid the bills in our family. It irks me that I will call about a payment and someone won't speak to me because it isn't in my name. :confused: I mean, if dh authorizes me to pay "his" bills out of our "joint" account, then ????

 

We applied for our new mortgage and dh qualifies for a better interest rate than I do. And I pay his bills! :glare:

 

Everyone should check their laws and their rights to ensure they are protected financially -- even in cases of a temporary disabling condition.

[plansrme]

I think this is wrong. As a stay at home spouse, I do contribute to the household and to the income that dh earns. His income is also my income. I think it is good for the stay at home spouse to have established credit in his/her own name. You never know when something might happen to your spouse.

 

:iagree:

 

I am not even a stay-at-home mom, and through more than half of our marriage, I made more than my husband, and I completely agree with this.

 

On a related note, sometimes I want to slap women who disregard the advice in bold. Husbands die, they get disabled, they flake out. YOU NEVER KNOW when you are going to need to provide for your family on a moment's notice. One of the ways we nurture our families is to keep yourself in such a way that you can provide for them financially if you need to. If it means keeping your nursing or teaching credentials up to date, or finishing that degree, or working part-time just to keep your foot in the door, that is just as important as homeschooling them or producing nutritious meals or caring for their emotional welfare. However, while I absolutely think moms need to be able to secure a living wage, I do not think credit card issuers should require that of them. Different standard.

 

Terri

Edited July 20, 2011 by plansrme
Apparently I can't type today...

[bettyandbob]

I've always known that if the primary card holder died the account was closed. This has been in practice for years. I guess I did not know that person's without independent income could open a credit card account.

 

During the years I had no independent income, we maintained a credit card account I opened in my name, while I was working. A few years back the account was bought by a bank I did not want to do business with. I was working very part time at that point, but I was able to qualify for a new card with a different bank on my meager part time pay. So I closed the account on the old card and opened the new account. If I had not had the part time job I would have kept the old account and used it. You do have to use credit cards once in a while. If you don't, some companies close unused accounts, because they don't make money for the issuer.

 

It may not seem fair that a nonincome earning spouse can't get a credit card. However, they are analyzing tangible income and if tangible income disappears then they can't get paid. If someone dies they close the account. But if your tangible income source dies and the account is in your name, the company can't cancel the account in your name, even though you can't pay.

Edited July 20, 2011 by betty

[snickelfritz]

I don't know what they take into account, but dh and I are buying a new house.

 

I haven't earned money in...7???? Years.

 

I do have a credit card in my name that we use randomly and pay off. We did this, because we had heard I needed to keep some credit of my own. Everything else is joint.

 

We both have great credit, but MINE is slightly better than his. It's a source of teasing for me.:D

 

I have 4 friends going through unexpected divorces. Throw in accidents or illness that could kill or severely incapacitate and I think EVERY woman should have a plan in case they need to become the sole breadwinner/source of credit for the family.

 

I know, know, know that divorce won't be an issue for us. But I can't control accidents and illness. I have a college degree in a science field, an additional certification that allows me to teach science and math, and my own credit.

[Mommee & Baba]

This is really scary to think about.

 

I've been a SAHM for 8 years and don't have any credit cards in my own name. My dh has all that. And I agree with many of you...you can't control the UNKNOWN...

 

I will now consider getting a credit card in my name because like all of us...we don't know the UNKNOWN and I really would be crippling my family if something happened to dh because I haven't been "responsible" in obtaining my own credit.

[Parrothead]

Hmm... I haven't had a credit card for years. Dh either. We don't do credit cards anymore. I haven't worked outside the home in 9 years. We don't have any credit in my name since we don't have much financed - just the mortgage and the vehicle. I'm on the registration as one of the owners of the vehicle so I can take over full ownership if dh dies. Same with the mortgage. I'd be responsible for paying it off in the event of dh dying but that is it. Dh is heavily insured with multiple policies so I'm not too worried about coughing up the money to pay off the few things we have financed.

 

Is this something I really need to worry about since I have no intention of (ever) getting a credit card?

[Moxie]

One more reason to not depend on credit cards and credit scores for security. Cash is king :)!

[BamaTanya]

 

Is this something I really need to worry about since I have no intention of (ever) getting a credit card?

 

No, not if you have a liquid emergency fund. What is it that is recommended? 3 mos of living expenses, I think.

 

Would you be able to stay afloat without credit if your dh suddenly lost his job? Or was in an accident that required a long hospital stay?

 

Or what if your region had a major disaster like Katrina and you had to evacuate?

 

Many people have relatives, wealth, etc that would help them weather the storm.

 

I would not want to have to rely on the government (FEMA) for short-term provision.

[Lolly]

Isn't this already in effect? I was originally denied several months ago when attempting to get a credit card for my dd18 due to this new rule. They told me that dh would have to be the one to help her get a card.( I do have cards in my own name already.) Then, when opening dd separate banking accounts w/o us linked to them, she was offered a card. (Since it was our bank), they told me to just claim some of dh's income and write it down as my own. Since dh is self-employed, I made up a position for myself in his company and assigned myself some income. Probably not exactly legal, but I really don't give a flip.:tongue_smilie:

Edited July 20, 2011 by Lolly

[Parrothead]

No, not if you have a liquid emergency fund. What is it that is recommended? 3 mos of living expenses, I think.

 

Would you be able to stay afloat without credit if your dh suddenly lost his job? Or was in an accident that required a long hospital stay?

 

Or what if your region had a major disaster like Katrina and you had to evacuate?

 

Many people have relatives, wealth, etc that would help them weather the storm.

 

I would not want to have to rely on the government (FEMA) for short-term provision.

We are working on the emergency fund. I like Dave Ramsey's idea of doing that first, but it just doesn't seem practical to us. We went with paying off all debt, except that mortgage, first. Once the vehicles are paid off we will easily have means to set up the emergency fund for 3 (if not six) months of expenses. Which really won't be much because we will only have to cover housing, utilities and food in the event of an actual emergency.

 

A Katrina-like disaster is unlikely, but not impossible. I know how to prep for hurricanes, tornados and sand storms. I have no idea what we would do if we had a massive disaster type snow. Hmm... I need to look into that.

[ezrabean2005]

Since in most situations a DH's income is the family's income, couldn't you just put down the income that he makes?

 

I haven't filled an application out in years, but doesn't it just have a box that you put annual income in? Couldn't you just put in the family's income?

[Wheres Toto]

When Dh and I were first married, my credit was crap. One of our cars is in my name and paid off (from before we were married). We ended up getting a secured credit card with a low balance (where you pay an amount of cash into an account and get a credit card with a limit of that amount). After about 6 months of regular payments, the card was converted into a traditional credit card. I have other cards on his accounts but the cards are in my name but we wanted something that would help repair my credit despite the fact that I wasn't working anymore.

[jewellsmommy]

I am not into credit cards for the sake of the credit cards. But, they help build credit. We rent our house, so no mortgage to build credit. I would just hate to be 30 or 40 something and suddenly widowed with children to raise and have the credit score of a 17 yo. I will get the life insurance. But, if I want to use some of that insurance to buy the house I am renting, I will still have to qualify for a mortgage. Even If I am putting 30% down.

 

Can you imagine:

length at current job: 1 month (didn't work before the spouse died, just started)

credit: un-established (if everything was in spouse's name)

 

A bank would not give this person a mortgage.

The established credit (with good score, mind you) could really make the difference.

[jewellsmommy]

Since in most situations a DH's income is the family's income, couldn't you just put down the income that he makes?

 

I haven't filled an application out in years, but doesn't it just have a box that you put annual income in? Couldn't you just put in the family's income?

 

 

That's the problem. Supposedly, the new law would make this no longer possible. If it is not salary-earning spouse on the application, then you cannot include the salary (under new law, depending on state?)

[BamaTanya]

We are working on the emergency fund. I like Dave Ramsey's idea of doing that first, but it just doesn't seem practical to us. We went with paying off all debt, except that mortgage, first. Once the vehicles are paid off we will easily have means to set up the emergency fund for 3 (if not six) months of expenses. Which really won't be much because we will only have to cover housing, utilities and food in the event of an actual emergency.

 

A Katrina-like disaster is unlikely, but not impossible. I know how to prep for hurricanes, tornados and sand storms. I have no idea what we would do if we had a massive disaster type snow. Hmm... I need to look into that.

 

We tried that angle before and it never worked. We'd have some heating repair or auto repair or plumbing or something that would always knock us off our debt-free plan until we worked out the minimal emergency fund.

 

I don't like the idea of credit cards any more than DR does. However, we have minimal pay (dh is a teacher) for our large family and we're never going to be expecting big raises. It's always going to be tight unless I go back to work full-time. An emergency cc makes sense to us. And you do have to have some activity on it once in a while to keep the account open.

 

Renting a hotel room is a big one. I know you can use a debit card, but I would prefer NOT to use the account that pays all our bills.

 

My cc account had fraudulent activity recently. I have a friend (single mom) whose debit card was compromised and her bank account was wiped out. It got cleared up -- but getting all her bills paid was a nightmare in the meantime.

[ThatCyndiGirl]

I think this is wrong. As a stay at home spouse, I do contribute to the household and to the income that dh earns. His income is also my income. I think it is good for the stay at home spouse to have established credit in his/her own name. You never know when something might happen to your spouse.

 

I can see how SAHMs contribute to the household, but how do they contribute to the income that their spouse earns? :confused:

 

I help my dh in many ways, but I can't really see how I contribute to HIS job and he doesn't contribute to MY job. Those are independant acts and we are each evaluated as an individual by our respective employers.

[mommaduck]

I can see how SAHMs contribute to the household, but how do they contribute to the income that their spouse earns? :confused:

 

I help my dh in many ways, but I can't really see how I contribute to HIS job and he doesn't contribute to MY job. Those are independant acts and we are each evaluated as an individual by our respective employers.

 

In that we make it possible for them to work and not be concerned about the home, children, meals, etc. Some of us also take care of all personal and financial issues for our spouses.

[littleWMN]

The "just in case" does not have to been a seperation/divorce. My friend's husband died suddenly and somehow all the credit cards were closed within days of his death. She had not notified them, but somehow they all knew and they were closed and she could not use or access them because she was not the primary card holder. She had a hard time getting her own card because she had been a SAHM for years. She advised us all to get a card in our own names "just in case" something happened to our husbands and we needed to have access to credit.

 

Yes! This happened to my mom when my dad died two years ago. It was a logistical nightmare and just added salt to the wound of my dad's death. My parents had been married 43 years and my dad was amazing with his money (like Dave Ramsey). My mom never had a significant job in all that time as she was mostly a SAHM. The OP has a good point. My mom went to the store and suddenly her credit cards didn't work.

[Moxie]

We tried that angle before and it never worked. We'd have some heating repair or auto repair or plumbing or something that would always knock us off our debt-free plan until we worked out the minimal emergency fund.

 

I don't like the idea of credit cards any more than DR does. However, we have minimal pay (dh is a teacher) for our large family and we're never going to be expecting big raises. It's always going to be tight unless I go back to work full-time. An emergency cc makes sense to us. And you do have to have some activity on it once in a while to keep the account open.

 

 

 

I guess I don't understand this logic. If you use the cc for an emergency, you have to make at least the minimum payments plus the interest. If you can pay the minimum payment after an emergency, why not put that money into a savings account before the emergency??

[Wheres Toto]

Renting a hotel room is a big one. I know you can use a debit card, but I would prefer NOT to use the account that pays all our bills.

 

 

 

You do NOT want to use a debit card for a hotel room if you can at all avoid it. A lot of hotels will place a hold on a certain amount to cover "incidentals" and it can take weeks for the money to be put back in your account. I stayed at a hotel a couple weeks ago and they had a sign prominently on the check-in desk. If you pay by debit card - IN ADDITION TO THE COST OF THE ROOM FOR YOUR ENTIRE STAY - they would put a hold of a minimum of $250 on your account. The amount could be higher for longer stays. If you pay cash, they needed an extra $250 cash that they would hold in reserve and would be returned at check-out after an inspection of the room by the management.

[G5052]

I've almost always worked part-time by choice, but it irks me that they are making it hard if you choose not to work. There's been talk periodically of running Social Security so that the benefits would be reduced even more if you haven't worked and are depending on the spouse credits. Some employers only provide health insurance for the employee with high premiums for family members. And now they're making it hard to get a credit card if you aren't working even if there is decent household income. Bottom line -- they're looking for places to cut and they see non-working spouses as the place to hit.

 

FWIW, it has always been true though that you need to establish your own credit. We've run into this over and over with older relatives and friends who were widowed and had all of the joint credit cards cancelled. It can really cause problems if they need a credit card and don't have one. If they have to travel or have an immediate expense that must be paid for while they wait for life insurance proceeds, etc., it can be a major issue.

 

It's a bummer though, isn't it? We've always had separate cards because we married later in life and just left it that way, but it bugs me that they would make it hard for people to have joint cards.

Edited July 20, 2011 by GVA

[littleWMN]

I can see how SAHMs contribute to the household, but how do they contribute to the income that their spouse earns? :confused:

 

I help my dh in many ways, but I can't really see how I contribute to HIS job and he doesn't contribute to MY job. Those are independant acts and we are each evaluated as an individual by our respective employers.

 

I've been a sahm for years. If not for me being home with the kids, keeping them when sick, taking dd to and from school, getting them to appointments, etc., DH would not have been nearly as successful in his job. He has busy seasons where he works 100 hour weeks. During the slow times, we works 60 hour weeks. If I was unavailable, he would have to manage our 4 kids and would not have advanced like he has. He could get a less demanding job and be paid roughly half of what he gets now. He says all the time that I'm the reason he is able to keep this job.

[jewellsmommy]

I can see how SAHMs contribute to the household, but how do they contribute to the income that their spouse earns? :confused:

 

I help my dh in many ways, but I can't really see how I contribute to HIS job and he doesn't contribute to MY job. Those are independant acts and we are each evaluated as an individual by our respective employers.

 

 

My dh gets to do his job unhindered by the concerns of what to do with a sick child who cannot go to daycare. My dh won't be called to the principal's office when ds is in a tizzy. Dh won't call out on his job for these things because I deal with them, and that is one less thing to clutter his mind with. He does not have to randomly miss work for these occurences. That can effect an evaluation (better evals = more opportunity for raises). Also, I handle the finances and the majority of meals and cleaning. If he had to pay for those things, then his net income would be less. My effort means 'he' gets to keep more of that income.

 

 

ETA: Not true for all, but because my dh's job requires someone "on call" at all times, there are overtime possibilities. My dh is on the rotation. He could not be if he were a single dad. He would not be able to jump out of bed at 3 in the morning and leave 2 young dc in the house alone.

Edited July 20, 2011 by jewellsmommy

[ThatCyndiGirl]

In that we make it possible for them to work and not be concerned about the home, children, meals, etc. Some of us also take care of all personal and financial issues for our spouses.

 

 

:confused: Ok, I consider that "contributing to the household", but not "contributing to a spouse's INCOME". Semantics, perhaps, but if one of us died the other would have to take over meals, worrying about childcare, etc. while still going to work. Being home does not contribute to another's actual income, although it does give them less to think about, takes a load off in terms of overall responsibility.

[ThatCyndiGirl]

My dh gets to do his job unhindered by the concerns of what to do with a sick child who cannot go to daycare. My dh won't be called to the principal's office when ds is in a tizzy. Dh won't call out on his job for these things because I deal with them, and that is one less thing to clutter his mind with. He does not have to randomly miss work for these occurences. That can effect an evaluation (better evals = more opportunity for raises). Also, I handle the finances and the majority of meals and cleaning. If he had to pay for those things, then his net income would be less. My effort means 'he' gets to keep more of that income.

 

 

I do those same things for my dh. I get it that those things are important. I just don't believe that they "contribute to the income", kwim? Saying that "now he/we get to keep more of that income" is not the same thing as "contribute to MAKING the income", imo.

 

So, by that logic, is a single man (childless) who has to run his own errands, cook his own meals or otherwise procure them, clean his own house or pay to have it done.....at a distinct disadvantage since he has no one to "help him earn his income"? I've been a SAHM and a full-time working outside the home mom and have never heard of a man thinking that his wife (who SAH) helped him earn his paycheck. It was more like they were both contributing to the household in different ways, kwim?

Edited July 20, 2011 by ThatCyndiGirl

[mommaduck]

:confused: Ok, I consider that "contributing to the household", but not "contributing to a spouse's INCOME". Semantics, perhaps, but if one of us died the other would have to take over meals, worrying about childcare, etc. while still going to work. Being home does not contribute to another's actual income, although it does give them less to think about, takes a load off in terms of overall responsibility.

 

My husband would have trouble keeping a job if it weren't for what I do. Therefore it helps keep the income coming in. We're a team. It's like a machine.

[JoyfulMama]

I am not into credit cards for the sake of the credit cards. But, they help build credit. We rent our house, so no mortgage to build credit. I would just hate to be 30 or 40 something and suddenly widowed with children to raise and have the credit score of a 17 yo. I will get the life insurance. But, if I want to use some of that insurance to buy the house I am renting, I will still have to qualify for a mortgage. Even If I am putting 30% down.

 

Can you imagine:

length at current job: 1 month (didn't work before the spouse died, just started)

credit: un-established (if everything was in spouse's name)

 

A bank would not give this person a mortgage.

The established credit (with good score, mind you) could really make the difference.

 

ETA: When I needed to purchase a vehicle in my own name, I was advised that I needed to NOT use marital funds to do so. Therefore cash savings wasn't helpful. It was either credit or a rich uncle. So glad I have the credit, since I don't have a rich uncle.

When you unexpectedly find yourself having to provide for your family, having good credit is like a bonus. With no recent work history, a new hire letter, and no rental history (dh's name was on the lease, but not mine because we were in different states trying to move), and two past mortgages, I didn't look very good on paper. But my credit rating is very high. I've always held a credit card in my own name. I've always had bank accounts in my own name (part of what I was told I needed to be a prepared, responsible adult) even if they weren't used very much. I was approved for a a new lease for a place to live right away. I was also approved right away for a new vehicle, when mine was taken out from under me.

I don't have control over the world. I was able to control that I had access to bank accounts and established credit when I needed it in an emergency. My husband and I also had POA for eachother established, in case of an emergency. That was handy when we were moving between states, and again when he was in the hospital.

 

ETA: When I had to get myself a vehicle in my own name, I was not allowed to use marital funds, or it could be considered marital property. I needed credit or a rich uncle. Thank goodness for good credit, as I don't have a rich uncle!

Edited July 20, 2011 by JoyfulMama

[jewellsmommy]

I do those same things for my dh. I get it that those things are important. I just don't believe that they "contribute to the income", kwim? Saying that "now he/we get to keep more of that income" is not the same thing as "contribute to MAKING the income", imo.

 

So, by that logic, is a single man (childless) who has to run his own errands, cook his own meals or otherwise procure them, clean his own house or pay to have it done.....at a distinct disadvantage since he has no one to "help him earn his income"? I've been a SAHM and a full-time working outside the home mom and have never heard of a man thinking that his wife (who SAH) helped him earn his paycheck. It was more like they were both contributing to the household in different ways, kwim?

 

 

Childless people do have an advantage in the workplace.

 

But, I am not speaking of childless people. And, I was addressing 2 separate reasons; one is the contribution of free services and the other is what is done that allows advancement in the workplace.

 

The most direct way to show this is what I added:

Not true for all, but because my dh's job requires someone "on call" at all times, there are overtime possibilities. My dh is on the rotation. He could not be if he were a single dad. He would not be able to jump out of bed at 3 in the morning and leave 2 young dc in the house alone.

 

My dh gets called by other people who are on call even when he is not the one on call. Why, 1. because he is it good at it. That is all him :001_smile:. But, 2. because he has been there done that in the situation. He could not do it with children, without me. This week, dh worked 11 hours of overtime. If he were a single father, he could not do it. He would have to pass those opportunities up. It is all his skill, yes, but he gets to let that shine because he can go do that, knowing I am at home (in bed :D) protecting the children at 3am.

[snickelfritz]

The most direct way to show this is what I added:

Not true for all, but because my dh's job requires someone "on call" at all times, there are overtime possibilities. My dh is on the rotation. He could not be if he were a single dad. He would not be able to jump out of bed at 3 in the morning and leave 2 young dc in the house alone.

 

I get what you are saying. Since my dh is on a work trip to Canada, I do agree.

 

The problem, is that what you and I think doesn't matter a hill of beans. If a bank is going to require YOU to have a paycheck stub to acquire credit, all of our background work won't count.

 

I love being a SAHM, but we have made arrangements to account for the fact that, as far as OFFICIAL institutions are concerned, I've done nothing to contribute to society for the last 7 years. I know I'm doing important work. But, I'm not earning a pay stub. I'm not contributing to SS or Medicare. I'm not directly in the flow of money to pay taxes. I know I save dh child care costs, decrease his stress so he can do a better job, etc... But there is no paper trail acknowledging my financial contributions.

 

Since we are in the process of buying a house (not by cash... I commend those who can do that on a cash basis), I can say that the mortgage process is ALL about the paper trail. Every detail requires documentation and more documentation. And we have excellent credit, are well within debt/equity ratios, blah, blah, blah....

Edited July 20, 2011 by snickelfritz

[BamaTanya]

I guess I don't understand this logic. If you use the cc for an emergency, you have to make at least the minimum payments plus the interest. If you can pay the minimum payment after an emergency, why not put that money into a savings account before the emergency??

 

We had our $1000 emergency savings. But it takes a long time of saving $25 to $50 per month to come up with real savings -- like the $6200 for a heat pump when the old unit quit. And how could you estimate what you would need to evacuate your family in an emergency? We have 5 dc and would have to pay for 2 hotels. For how long?

 

What if, like in Katrina, we needed to relocate? We have insurance, but how long would it take to get a check? How much would it cost to keep the children fed in the meantime? What if we needed deposits to get utilities turned on?

 

We would rather have access to credit that we don't use than need it and not have it.

 

Of course it makes more sense to save instead. But we don't have that much savings.

 

My fil just dropped his wind coverage (we're on the Gulf Coast) because his premiums are so high. He can afford to do that! He owns his house. He has retirement savings to cover repairs. We must keep coverage no matter how high the premiums because we have a mortgage. I wish it were different, but it isn't right now.

 

We had to borrow money for repairs when we had no cc, even though we had reached the $1000 emergency fund. It wasn't enough. And dh and I hated having to ask in-laws for help, even though it was just for a month.

Edited July 20, 2011 by BamaTanya

[mommaduck]

I do those same things for my dh. I get it that those things are important. I just don't believe that they "contribute to the income", kwim? Saying that "now he/we get to keep more of that income" is not the same thing as "contribute to MAKING the income", imo.

 

So, by that logic, is a single man (childless) who has to run his own errands, cook his own meals or otherwise procure them, clean his own house or pay to have it done.....at a distinct disadvantage since he has no one to "help him earn his income"? I've been a SAHM and a full-time working outside the home mom and have never heard of a man thinking that his wife (who SAH) helped him earn his paycheck. It was more like they were both contributing to the household in different ways, kwim?

 

My husband does think that way. Especially since he's not a single and childless man. We have eight children. It's a full time job to keep things running. His income IS my income. His income is better stabilized (in our situation) by my being home and managing things on this end.

[gardening momma]

On a related note, sometimes I want to slap women who disregard the advice in bold. Husbands die, they get disabled, they flake out. YOU NEVER KNOW when you are going to need to provide for your family on a moment's notice. One of the ways we nurture our families is to keep yourself in such a way that you can provide for them financially if you need to. If it means keeping your nursing or teaching credentials up to date, or finishing that degree, or working part-time just to keep your foot in the door, that is just as important as homeschooling them or producing nutritious meals or caring for their emotional welfare. However, while I absolutely think moms need to be able to secure a living wage, I do not think credit card issuers should require that of them. Different standard.

I certainly do not disregard the idea that something might happen to my spouse. But we have handled our finances in a way that I do not need a credit card to get me through the initial difficulty if something did happen.

 

ETA: And we do use our credit card for almost everything. We pay it off every month, though. Right now, we don't have a cc because someone stole the number somehow and charged $87k to the card. We're waiting for the cc company to send us new cards. In the meantime, we're doing just fine without a card.

Edited July 20, 2011 by gardening momma

[jewellsmommy]

I get what you are saying. Since my dh is on a work trip to Canada, I do agree.

 

The problem, is that what you and I think doesn't matter a hill of beans. If a bank is going to require YOU to have a paycheck stub to acquire credit, all of our background work won't count.

 

I love being a SAHM, but we have made arrangements to account for the fact that, as far as OFFICIAL institutions are concerned, I've done nothing to contribute to society for the last 7 years. I know I'm doing important work. But, I'm not earning a pay stub. I'm not contributing to SS or Medicare. I'm not directly in the flow of money to pay taxes. I know I save dh child care costs, decrease his stress so he can do a better job, etc... But there is no paper trail acknowledging my financial contributions.

 

Since we are in the process of buying a house (not by cash... I commend those who can do that on a cash basis), I can say that the mortgage process is ALL about the paper trail. Every detail requires documentation and more documentation. And we have excellent credit, are well within debt/equity ratios, blah, blah, blah....

 

 

Oh, I totally agree. That is why even though I am not a fan of credit cards, I have tried to make sure I have used one in my name to help build my credit. This is the only safeguard I can take outside of life insurance.

[BamaTanya]

My husband does think that way. Especially since he's not a single and childless man. We have eight children. It's a full time job to keep things running. His income IS my income. His income is better stabilized (in our situation) by my being home and managing things on this end.

 

My husband thinks that way, too. We made a conscious decision last year for me not to go back to work (doubling our salary) even though we had educational plans for all of our dc. Just the fact that sometimes someone gets sick was enough that dh said, "We need you to be home."

 

I've been working to establish my own credit, however, after being out of the work force for 9 years and also after having no credit cards between us.

[ezrabean2005]

That's the problem. Supposedly, the new law would make this no longer possible. If it is not salary-earning spouse on the application, then you cannot include the salary (under new law, depending on state?)

 

But how would they know? My point is that if a person has a credit history (even from the past), and they applied for a new card without their spouse, they could still say they made "$XXXX". Unless the way credit issuance was changed (like they asked where you worked and called the company to verify that you specifically worked there), I'd think you'd still be able to get around it.

[Murphy101]

I get what you are saying. Since my dh is on a work trip to Canada, I do agree.

 

The problem, is that what you and I think doesn't matter a hill of beans. If a bank is going to require YOU to have a paycheck stub to acquire credit, all of our background work won't count.

 

I love being a SAHM, but we have made arrangements to account for the fact that, as far as OFFICIAL institutions are concerned, I've done nothing to contribute to society for the last 7 years. I know I'm doing important work. But, I'm not earning a pay stub. I'm not contributing to SS or Medicare. I'm not directly in the flow of money to pay taxes. I know I save dh child care costs, decrease his stress so he can do a better job, etc... But there is no paper trail acknowledging my financial contributions.

 

Since we are in the process of buying a house (not by cash... I commend those who can do that on a cash basis), I can say that the mortgage process is ALL about the paper trail. Every detail requires documentation and more documentation. And we have excellent credit, are well within debt/equity ratios, blah, blah, blah....

 

:iagree: Personally, I agree with the law. I think it is flat out stupid that I get 4-5 offers of pre approved credit cards with 2k+ available when I don't even have a job. That's nuts to give someone credit based on the fact they live with someone who works. For that matter, I think if a married couple is always held jointly responsible for the debt should it default, then no credit should be offered unless they both sign for it, regardless of which one earns the income. But I hate credit in general. With the exception if a mortgage, I wouldn't touch it.

 

But how would they know? My point is that if a person has a credit history (even from the past), and they applied for a new card without their spouse, they could still say they made "$XXXX". Unless the way credit issuance was changed (like they asked where you worked and called the company to verify that you specifically worked there), I'd think you'd still be able to get around it.

 

:001_huh:They have always asked where you work and they verify it either by calling or via credit report.

 

Up until now, you should have left your employment section empty and filled out the spouse section and then, usually, had spouse sign that it was okay to use his info to obtain credit. If you did not do this, it was fraud.

 

What I'm hearing is this new law would mean that unless it you are employeed, you can't get credit. You would not be able to get it based on your spouses income and signature, which is how it stands now.