New CARD Act rule may give more people credit access

The economic collapse of 2008 resulted in sweeping changes to credit card regulations that were designed to provide more protection to consumers. Under the new laws, it became more difficult for consumers under 21 to obtain a credit line without a co-signer, and lenders were also required to be more transparent about their policies and dealings with consumers. However, new income disclosure requirements made it difficult for a certain demographic – specifically, homemakers – to obtain a credit card in their own name, and the Consumer Financial Protection Bureau has taken this obstacle into consideration. 

The CFPB announced amendments to credit card rules that will make it easier for spouses who don’t work outside the home to obtain a credit line in their name. Previous rules required that lenders consider a person’s independent income when making determinations about extending credit, and as a result, homemakers were typically unable to secure a credit line in their own names. Under the new rules, lenders can factor income that a stay-at-home applicant shares with a working spouse when they assess the person’s eligibility for credit and credit limits that may apply. The applicant must still be 21 years of age or older in order to obtain a credit line. 

"Stay-at-home spouses or partners who have access to resources that allow them to make payments on a credit card can now get their own cards," said CFPB director Richard Cordray. "Today’s final rule is an example of the Bureau’s commitment to working with consumers and financial institutions in order to ensure responsible access to credit for American families."

Avoiding credit issues in the future

While the new rules are a victory for stay-at-home spouses who want to build credit in their own name, it’s important that couples develop a spending budget to lower the risk of incurring significant household debt. It’s also key that homemakers understand that any credit card debt incurred on their account will solely affect their credit standing, and not that of their spouse, even if it is their partner’s income that is used to pay household bills. For these reasons, setting spending parameters, monitoring account activity and never charging more than can be paid off in a single billing cycle can have both financial and credit benefits.