Stay-at-Home Spouses Face Credit Restrictions

[Impish]

A note about savings:

 

I don't know if its still the case, but I have heard of many situations where the joint bank acct was frozen when a spouse died. Make sure that each spouse has a few mths worth of expenses set aside if they don't have their own credit card so that they'll still be able to pay the rent/mortgage, buy groceries, etc until the bank unfreezes the acct.

[Parrothead]

: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.

 

 

 

: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.

There is a big difference between "living with someone who works" and being married. I don't know anyone who would say that great-aunt Suzie should be able to claim dh's income just because she lives in our spare bedroom. But I as dh's wife historically have been able to claim his income. Penalizing non-working spouses is not the way to accomplish whatever it is they are trying to accomplish. Not only does this penalize housewives, and SAHMs it penalizes spouses who are in school, disabled and a host of other people.

[ezrabean2005]

: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.

 

Nope, not fraud. I work full time and am the primary breadwinner in our family. I was asking - we haven't applied for credit in many years....

[ezrabean2005]

Regardless, it's a good change...people who have no income should not get credit. That's what caused a lot of problems in the first place. I don't think it was designed to slight SAH parents. It just happens to affect them too.

[mommaduck]

There is a big difference between "living with someone who works" and being married. I don't know anyone who would say that great-aunt Suzie should be able to claim dh's income just because she lives in our spare bedroom. But I as dh's wife historically have been able to claim his income. Penalizing non-working spouses is not the way to accomplish whatever it is they are trying to accomplish. Not only does this penalize housewives, and SAHMs it penalizes spouses who are in school, disabled and a host of other people.

 

Exactly.

[YLVD]

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.

 

:iagree:

[Mom-ninja.]

This is new? I had to put my DH on a credit card I opened a couple years ago, because I don't have an income. They wouldn't let me open it myself because I'm not employed. This was for a credit card with a $300 limit I might add, and my personal credit score was in the "not denied" range.

Edited July 20, 2011 by Kleine Hexe

[snickelfritz]

Regardless, it's a good change...people who have no income should not get credit

 

Except, I don't think this holds true across the board, with regards to finances and marriage.

 

I make zero income. If dh and I divorce, am I able to say "Hey, I didn't make the money. I'm not responsible for the mortgage, or the dentist bill, or the car payment. It's all on him. Yes, I've gotten a job since we divorced. But, I'm not legally responsible for any of the financial debt we occurred while married, because I didn't earn the money that qualified us for it."

 

I've never been divorced. Maybe it works that way?

 

I don't know. Maybe I'm mixing up issues.

[YLVD]

: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

 

:iagree:

 

Ignoring those issues will not make them disappear. It happens, many of us can attest to spouses that flaked out, became abusive, etc. I have a college degree and currently freelance. I believe that every woman needs to be able to support herself in the event of something happening, or a spouse leaving, cheating, etc.

 

I also agree about the credit card. Not their place to do so.

[G5052]

A note about savings:

 

I don't know if its still the case, but I have heard of many situations where the joint bank acct was frozen when a spouse died. Make sure that each spouse has a few mths worth of expenses set aside if they don't have their own credit card so that they'll still be able to pay the rent/mortgage, buy groceries, etc until the bank unfreezes the acct.

 

With one MIL, the accounts were indeed frozen within days of FIL's death without our knowledge. Her debit card stopped working, and when we called they said that every account was frozen. It was several days before they could verify everything (we had to show them the original copy of the will), and then she could use her card again and write checks.

 

When the other FIL died, we went to the bank right away, and they said that it wasn't a problem. FIL hadn't signed any checks or used a debit card in years. They redid the accounts right then, but acted like it was no big deal.

[Murphy101]

Regardless, it's a good change...people who have no income should not get credit. That's what caused a lot of problems in the first place. I don't think it was designed to slight SAH parents. It just happens to affect them too.

 

:iagree:

[mommaduck]

Except, I don't think this holds true across the board, with regards to finances and marriage.

 

I make zero income. If dh and I divorce, am I able to say "Hey, I didn't make the money. I'm not responsible for the mortgage, or the dentist bill, or the car payment. It's all on him. Yes, I've gotten a job since we divorced. But, I'm not legally responsible for any of the financial debt we occurred while married, because I didn't earn the money that qualified us for it."

 

I've never been divorced. Maybe it works that way?

 

I don't know. Maybe I'm mixing up issues.

 

Nope, I believe you can be equally liable, regardless of your income.

[ezrabean2005]

Except, I don't think this holds true across the board, with regards to finances and marriage.

 

I make zero income. If dh and I divorce, am I able to say "Hey, I didn't make the money. I'm not responsible for the mortgage, or the dentist bill, or the car payment. It's all on him. Yes, I've gotten a job since we divorced. But, I'm not legally responsible for any of the financial debt we occurred while married, because I didn't earn the money that qualified us for it."

 

I've never been divorced. Maybe it works that way?

 

I don't know. Maybe I'm mixing up issues.

 

From the experiences of close friends and relatives, the husbands were ordered to pay for things unless they were awarded to the wife. For example, if you had a car payment and you were awarded the car then you'd be expected to pay for it. Of course, if the husband didn't pay, then the creditors technically could pursue the wife (if she was also named on the account).

 

Never having gone through this personally, I don't know specifics. I'm sure it would vary in every case though.

[Murphy101]

Except, I don't think this holds true across the board, with regards to finances and marriage.

 

I make zero income. If dh and I divorce, am I able to say "Hey, I didn't make the money. I'm not responsible for the mortgage, or the dentist bill, or the car payment. It's all on him. Yes, I've gotten a job since we divorced. But, I'm not legally responsible for any of the financial debt we occurred while married, because I didn't earn the money that qualified us for it."

 

I've never been divorced. Maybe it works that way?

 

I don't know. Maybe I'm mixing up issues.

 

 

This is a good question. Usually if a spouse's income is used to secure credit, the spouse has to at least be a cosigner bc they are held accountable for that debt. I'm not sure about divorce, but I *think* in death a spouse who hasn't signed is not liable? Not sure. Of course, they might WANT to be liable for some things, such as their home or car so they don't loose them.

 

Personally I think history is not relevant on this one anymore. With cohabitation, common law marriage, and divorce being so abundant - it just does not make good business sense to give credit based on marriage and not actual personal earned income.

 

However, IF they are going to hold me liable for my husbands debts (in death or divorce) then I don't think he should be able to attain the debt without my signature, regardless which of us is actually earning the income.

[6packofun]

Would this affect a retired person who is living on SS income and savings alone? Will it be difficult for them to obtain a new cc (or is it already?) because they do not have employment income? Just curious.

[Mrs Mungo]

This is new? I had to put my DH on a credit card I opened a couple years ago, because I don't have an income. They wouldn't let me open it myself because I'm not employed. This was for a credit card with a $300 limit I might add, and my personal credit score was in the "not denied" range.

 

I have a card that is in my name (specifically so that I keep a credit history). My dh is on it because I don't have any income, but I am the primary account holder. Is this what cannot happen anymore?

[Renee in NC]

Nope, I believe you can be equally liable, regardless of your income.

 

Only if those things were in your name as well, unless you live in a community porperty state. No one can come after me for debts in dh's name only and vice versa.

[snickelfritz]

Only if those things were in your name as well, unless you live in a community porperty state

 

Yeah, I think I do. I need to look.

[Parrothead]

Oh, another thought. How does this effect those who are self-employed?

[snickelfritz]

Ok, I am NOT a community property state. There are 9. But, I did find this:

 

You can divorce your spouse, but unless you take extra steps to protect yourself, ditching debt from jointly held cards is more difficult. Credit card companies aren't bound by divorce decrees, so they can go after you for jointly incurred debt if your former spouse doesn't pay.

 

http://www.creditcards.com/credit-card-news/help/dividing-credit-card-debt-divorce-6000.php

[Joanne]

From the experiences of close friends and relatives, the husbands were ordered to pay for things unless they were awarded to the wife. For example, if you had a car payment and you were awarded the car then you'd be expected to pay for it. Of course, if the husband didn't pay, then the creditors technically could pursue the wife (if she was also named on the account).

 

Never having gone through this personally, I don't know specifics. I'm sure it would vary in every case though.

 

But that is separate from what happens in court with creditors. The decree may delineate who is responsible for what. But a creditor can come after either party, post divorce, legally.

 

The creditors are not at all obligated to "honor" what was written in the divorce decree.

Edited July 20, 2011 by Joanne

[Renee in NC]

Ok, I am NOT a community property state. There are 9. But, I did find this:

 

They will go after both spouse for jointly held debt even if the court assigns it to one or the other spouse. The creditors don't care about your divorce decree because while your ex-spouse is bound by it, the creditors are not. Jointly-held debt is not a good idea if you are not in a community property state (in which case it wouldn't matter one way or the other.)

[Joanne]

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.

 

That's a dramatically presented support of a SAHM/WOHD arrangement. It may even be true.

 

But I'm not convinced that a business entity is obligated to support that perspective or paradigm in practice. The companies in question exist not to "give you a credit score" or even to "give you credit" but to operate at a profit. The credit card happens to be the vehicle of that profit.

 

That said, if they won't grant the SAH parent credit in their own name, a case could be made that they should not be allowed to collect from said spouse in the event of death or divorce. :001_huh:

[LaxMom]

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.

 

 

Um, yeah. If I'm not in a community property state and have no income, why on earth would anyone want to extend me credit? "My husband will pay for it" doesn't seem like something lenders would be ok with.

[mommaduck]

That's a dramatically presented support of a SAHM/WOHD arrangement. It may even be true.

 

But I'm not convinced that a business entity is obligated to support that perspective or paradigm in practice. The companies in question exist not to "give you a credit score" or even to "give you credit" but to operate at a profit. The credit card happens to be the vehicle of that profit.

 

That said, if they won't grant the SAH parent credit in their own name, a case could be made that they should not be allowed to collect from said spouse in the event of death or divorce. :001_huh:

 

I didn't say they were obligated. However, I wish they were obligated to recognising a marital relationship (oh, they do! But only when they are trying to collect!)

[Joanne]

I didn't say they were obligated. However, I wish they were obligated to recognising a marital relationship (oh, they do! But only when they are trying to collect!)

 

I disagree, I think. They aren't obligated to recognize a marital and family dynamic/choice. What you describe is a SAHM/WOHD choice. A for-profit business agency has no need or obligation to support that arrangement. Particularly when their business relies on income generation on the part of the customers.

[elegantlion]

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.

 

We only use debit cards and have been able to get around that a couple of times. IIRC we paid cash for the room upon check in and paid an extra 50.00 cash deposit. I don't know if that will work everywhere, but it has a couple of times.

 

We had the debit situation mess us up big time once when we were out of town. Thankfully we were with friends as we had to borrow money to get home as it took 10 days for the pending transaction to fall off.

[plansrme]

I disagree, I think. They aren't obligated to recognize a marital and family dynamic/choice. What you describe is a SAHM/WOHD choice. A for-profit business agency has no need or obligation to support that arrangement. Particularly when their business relies on income generation on the part of the customers.

 

There is a difference between for-profit businesses being required to support marriage and federal regulations prohibiting them from doing so, which is the topic at hand. In this case, a governmental agency is essentially prohibiting them from extending credit to non-working spouses, not requiring that they do so.

 

Terri

[mommaduck]

There is a difference between for-profit businesses being required to support marriage and federal regulations prohibiting them from doing so, which is the topic at hand. In this case, a governmental agency is essentially prohibiting them from extending credit to non-working spouses, not requiring that they do so.

 

Terri

 

:iagree:

[Murphy101]

They are not prohibited from getting credit.

They are prohibited from getting credit without the cosign of someone with some sort of income, which is a reasonable fianancial business expectation.

[Joanne]

There is a difference between for-profit businesses being required to support marriage and federal regulations prohibiting them from doing so, which is the topic at hand. In this case, a governmental agency is essentially prohibiting them from extending credit to non-working spouses, not requiring that they do so.

 

Terri

 

 

I disagree. Having at at home mother who does not PRODUCE an income is a choice. Taking marriage out of it, if any individual was at home, not working, why should any credit agency be forced to consider them credit-worthy?

 

Again, though, if this is the regulation, I'm not certain that the same business should be allowed to come after the spouse in the event of a split or death.

[plansrme]

I disagree. Having at at home mother who does not PRODUCE an income is a choice. Taking marriage out of it, if any individual was at home, not working, why should any credit agency be forced to consider them credit-worthy?

 

Again, though, if this is the regulation, I'm not certain that the same business should be allowed to come after the spouse in the event of a split or death.

 

Disagree with what? A few posts up, you seemed to say that credit card companies should not be forced to recognize household income for a non-working spouse. I was pointing out that that is not what is happening. Rather, the regulation prohibits credit card companies from considering household income. It certainly does not require them TO consider it. I don't know that anyone has argued that private businesses should be required to consider household income, as opposed to personal income, which is what I understood your argument to be against.

 

For what it's worth, I agree that credit card issuers should be free to extend credit on the basis of household income. I do not necessarily think they should be required to do so.

 

Terri

[littleWMN]

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.

 

Yes, this. My husband would be fired if he were not able to keep up with his 60-100 hour a week job. If he were childless and single, it wouldn't be a consideration. If he were a single dad, he'd have to get another job (at least half the pay).

[Joanne]

Disagree with what? A few posts up, you seemed to say that credit card companies should not be forced to recognize household income for a non-working spouse. I was pointing out that that is not what is happening. Rather, the regulation prohibits credit card companies from considering household income. It certainly does not require them TO consider it. I don't know that anyone has argued that private businesses should be required to consider household income, as opposed to personal income, which is what I understood your argument to be against.

 

For what it's worth, I agree that credit card issuers should be free to extend credit on the basis of household income. I do not necessarily think they should be required to do so.

 

Terri

 

Some of the posts in this thread talked specifically of how at home moms assist/support their DH's in their work and producing income. I have been responding to the issues of credit as it relates to the sentiment behind those posts.

[Joanne]

Yes, this. My husband would be fired if he were not able to keep up with his 60-100 hour a week job. If he were childless and single, it wouldn't be a consideration. If he were a single dad, he'd have to get another job (at least half the pay).

 

But that does not support a credit-granting for profit business offering you credit. It is a choice you've made as a couple.

[LaxMom]

They are not prohibited from getting credit.

They are prohibited from getting credit without the cosign of someone with some sort of income, which is a reasonable fianancial business expectation.

 

I agree. And I cannot imagine, as the household wage earner, being liable to pay for credit spending over which I have no control. If I, as a non-earning spouse, could open individual credit accounts based on my husband's income, that is exactly the position he would be in.

[MindyD]

What about having some of the bills in your name. I haven't worked in years either, but half the bills are in my name because I'm the one that sets everything up. That counts towards a credit score as well, right?

[jewellsmommy]

I agree. And I cannot imagine, as the household wage earner, being liable to pay for credit spending over which I have no control. If I, as a non-earning spouse, could open individual credit accounts based on my husband's income, that is exactly the position he would be in.

 

Well, as far as the spending part goes, it is not much different then a joint checking account. You could go run amok with your joint savings or checking account, too. As the wage earner, are you concerned about your spouse having a check book or debit card? Is your debit card linked to an overdraft line of credit? If so, then it is virtually the same thing.

[snickelfritz]

What about having some of the bills in your name

 

I looked it up. It says utility payments generally don't affect your score, unless you don't pay and they report you. BUT there are a few alternative places that will look at it, if you don't have a rich credit history.

 

So, back to my words..... Sounds like timely payment of them would be better than nothing. When we move, I'll definitely put them in my name. Every little bit and all that......

[ThatCyndiGirl]

Well, as far as the spending part goes, it is not much different then a joint checking account. You could go run amok with your joint savings or checking account, too. As the wage earner, are you concerned about your spouse having a check book or debit card? Is your debit card linked to an overdraft line of credit? If so, then it is virtually the same thing.

 

 

Credit is a much deeper pocket than a checking account. I may just be speaking of OUR personal finances, but with the speed at which they process debits/checks these days a spouse would be found out in short order if they were just running all over town bouncing checks/debits.

[jewellsmommy]

Credit is a much deeper pocket than a checking account. I may just be speaking of OUR personal finances, but with the speed at which they process debits/checks these days a spouse would be found out in short order if they were just running all over town bouncing checks/debits.

 

That is why I also referenced an overdraft line of credit. That would be no different than a credit card. Not everyone has this, of course. We did way back in the day. It kicked in if you overdrew the account, but the limit was like $1,000. Whew, that could put a hurt on ya. :D

[littleWMN]

But that does not support a credit-granting for profit business offering you credit. It is a choice you've made as a couple.

 

Agreed. No argument here. I'm answering the question of how I contribute to my husband's income - which was asked.

 

We don't have debt (other than mortgage). It really does not matter to me except for the principal. I received credit applications in college (before I was earning an income). My 9 year old got a credit card offer this year.

[snickelfritz]

Just in answer to those who say they don't use credit.......

 

Credit reports also affect:

Cell phone rates

Insurance rates

Ability to rent an apartment

 

I think this ruling may not affect many of us AS MUCH. The big concerns I found were for women in controlling, abusive relationships. They start to look for a way out and have no financial resources. Tips even listed getting a money backed card and telling hubby it was to allow her to surprise him with presents. That makes me incredibly sad. But, that's a digression....

[LaxMom]

Well, as far as the spending part goes, it is not much different then a joint checking account. You could go run amok with your joint savings or checking account, too. As the wage earner, are you concerned about your spouse having a check book or debit card? Is your debit card linked to an overdraft line of credit? If so, then it is virtually the same thing.

 

In a joint checking account, we both have the ability to see spending, and are limited by the balance of the account. We have overdraft tied to our savings; our bank did away with personal lines of credit last year. There was a lower limit to that than using our savings.

 

But these are all liquid assets. The worst that could happen is that we don't have money left in a given pay cycle.

 

If I have a $15,000 credit card that my husband has no ability to see the account details of, request a freeze or whatever, having to pay that bill every month could put a hurting on the household finances for much longer than getting crazy with the checkbook.

 

Married people share the burden and the bounty. If we want a card for my use, there is nothing stopping us from opening one. But the person who is financially guaranteeing that has to sign on the dotted line.

[Renee in NC]

I agree. And I cannot imagine, as the household wage earner, being liable to pay for credit spending over which I have no control. If I, as a non-earning spouse, could open individual credit accounts based on my husband's income, that is exactly the position he would be in.

 

Not really, because he isn't liable unless his name is on the accounts (or in a community property state.) All the credit applications I filled out asked for my occupation and household income, not individual income. The majority of that household income was dh's, but that didn't make him liable for those debts.

 

I see that this law changes that, which is fine with me because I will never have a credit card again.

[TravelingChris]

Okay, now I am completely confused. I don;t have a job. I save the taxpayers lots of money because I became disabled at a young age, before I had earned enough social security credit. I have an Amex card on which I am the primary, dh and dd are added in. I also have some store cards in my name and I got an Amazon Visa a few years ago also only in my name. So even though I have very good credit and do have assets that are more than enough to pay off any future credit I take ( I like doing things like applying for store credit to get extra discounts and notices of sales but I pay off immediately), I won;t be able to do this anymore? This makes me furious. I will be contacting my congressman and senators. Since I have been married for almost 26 years and my husband has been in the military for over 24, I am eligible for half his pension, if he wantd to divorce me. That means I always have money- whether it is from our joint checking account or from that.

[laundrycrisis]

These are the thoughts that popped into my head:

 

1. I understand why the companies would not want to issue credit to a person without his/her own income. I get it. It still doesn't feel "fair". My DH is able to have the kind of job he has because I am always available to care for our children so he can work overtime or be on call as often as he needs to. If he didn't have my 100% availability then his freedom to do that would be limited and it would affect what kind of position he could take. Add it to the list of things about life that are not fair.

 

2. I wonder if I started earning an income, how long it would take and how much I would have to earn to be eligible for credit again. Would a part time evening or weekend job be enough for a CC with a small limit but that was exclusively mine (not joint or cosigned) ?

 

3. Can my DH pay me a salary or wage that I could list as income (but not enough to have to pay taxes on ?) Could I list an income from our "Lastname Academy" school ? :tongue_smilie: My contribution here certainly has economic value.

Edited July 21, 2011 by laundrycrisis

[Moxie]

Isn't the statistic something like 1 in 5 credit card applications is actually looked at by a human? If that is true, isn't this all a mute point? Students have no income. Are the cc companies really going to stop giving cards to students? I doubt it.

[snickelfritz]

Students have no income. Are the cc companies really going to stop giving cards to students? I doubt it.

 

College students were the original target of this legislation. SAHM's (and dad's) got caught in it.

[Murphy101]

Isn't the statistic something like 1 in 5 credit card applications is actually looked at by a human? If that is true, isn't this all a mute point? Students have no income. Are the cc companies really going to stop giving cards to students? I doubt it.

 

:001_huh:

What does how many humans look at the app have to do with anything? If anything, that means it will be HARDER, not moot at all. Electronics don't have any bias. No income = automatic no credit card issued. Not the other way around.

 

College students were the original target of this legislation. SAHM's (and dad's) got caught in it.

 

I agree, and it's about time too.

 

As a side note, dh and I seem to be well matched. I can't get credit without his income. He can't get credit without my great credit rating. Combined, we have great credit. Either of us separate wouldn't have nearly as good a credit.