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Stay-At-Home Parents Can Face Credit Denial Under Banking Law

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posted on Apr, 16 2012 @ 07:21 PM
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Stay-At-Home Parents Can Face Credit Denial Under Banking Law
By Eric Scheiner
April 16, 2012


That's because Obama signed the Credit Card Accountability Responsibility and Disclosure (CARD) Act in 2009,
and went into effect in October 2011 with little fanfare.

People are subject to the Federal Reserve rule about the "ability to pay" and the way credit card issuers look at "income"

And, credit issuers can no longer consider "household" income as part of an individual's application for credit.

Maybe there should have been "exceptions" and "waivers" ??

Some politicians are scampering around to see what they can do for any new victims.
They are calling for a "study" to look into things.
(for a big fat fee of course !! ----- more money down the drain)


A stay-at-home parent without a significant outside income could find it difficult to open their own credit card account under a measure signed into law by President Obama.

“We’re here today because of a bill that will make a big difference,” President Barack Obama said in May of 2009 when he signed the Credit Card Accountability Responsibility and Disclosure (CARD) Act.



One of the differences created by the CARD Act is a Federal Reserve rule regarding “ability to pay”. A credit card issuer must verify income before allowing someone to open a new account.

The rule took effect in October of 2011, prohibiting the consideration of household income if only one person is applying for a credit card account. It says that a card issuer must consider a consumer's independent ability to make the required payments, “regardless of the consumer's age.”

The impact is that a stay-at-home parent must prove that they alone can make the payments with only their income sources. If they cannot, they would have to have their working partner co-sign in order to obtain the credit, a concern of several lawmakers.



More good legislation that does no good for the majority of citizens !!




posted on Apr, 16 2012 @ 07:26 PM
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Ok, excuse me if I fail to see the issue here. Why would you have a credit card in your own name if you have no way to pay the bill?



posted on Apr, 16 2012 @ 07:29 PM
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Originally posted by DarthMuerte
Ok, excuse me if I fail to see the issue here. Why would you have a credit card in your own name if you have no way to pay the bill?


That alone makes people wonder why the law was even considered.

There must be a catch.



posted on Apr, 16 2012 @ 07:31 PM
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I guess, because I don't get it at all.



posted on Apr, 16 2012 @ 07:36 PM
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My cousin is a stay at home mom and her husband is a big shot lawyer. she obviously doesnt have to work cause he provides for her. she cant get a credit card though because she has no income of her own which is kinda bullcrap. they obviously didnt think parts of this law through before running it past. i dont see why they couldent just take household income instead of personal income



posted on Apr, 16 2012 @ 07:40 PM
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reply to post by xuenchen
 


Dear xuenchen,



And, credit issuers can no longer consider "household" income as part of an individual's application for credit.


Lets look at this another way. If I am married and have a stay at home spouse, should they be able to get a credit cared without me knowing based on my income. If they can (and my ex wife did), then if we divorce, I could be the one responsible for all of the debt that she ran up without my knowledge (which is what happened). More and more we have seen people about to get divorced open credit cards, spend it on preparing for their new life and the debt is left for their ex to pay for and they never even knew it existed.



posted on Apr, 16 2012 @ 07:48 PM
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Originally posted by MastaShake
My cousin is a stay at home mom and her husband is a big shot lawyer. she obviously doesnt have to work cause he provides for her. she cant get a credit card though because she has no income of her own which is kinda bullcrap. they obviously didnt think parts of this law through before running it past. i dont see why they couldent just take household income instead of personal income
I will ask again. Why should anybody who lacks the means to pay the bill THEMSELVES be able to get a credit card in their own name?



posted on Apr, 16 2012 @ 07:54 PM
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I actually think that's a smart way to go about it. If a stay-at-home parent needs a credit card or whatever, then the spouse can be a co-signer and get around that annoying little snag.



posted on Apr, 16 2012 @ 07:57 PM
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Originally posted by AQuestion
reply to post by xuenchen
 


Dear xuenchen,



And, credit issuers can no longer consider "household" income as part of an individual's application for credit.


Lets look at this another way. If I am married and have a stay at home spouse, should they be able to get a credit cared without me knowing based on my income. If they can (and my ex wife did), then if we divorce, I could be the one responsible for all of the debt that she ran up without my knowledge (which is what happened). More and more we have seen people about to get divorced open credit cards, spend it on preparing for their new life and the debt is left for their ex to pay for and they never even knew it existed.


Makes sense to me.

That must have been one reason behind the law.

Maybe that's why we hear crying now.



posted on Apr, 16 2012 @ 08:00 PM
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reply to post by DarthMuerte
 


I have credit cards in my own name, I have been a stay-at-home mom for 10 years....good ole hubby pays the bills...he is my "income source"


I work for him and my kids, he pays my bills....

Look at it this way...I see it as another attack against stay at home moms by this administration and the militant feminists....

Either you have a paycheck of your own or you don't get to have a credit card in your name..it is important for moms to keep a credit report active in case Daddy jumps ship with a 20 something and leaves her with no credit.

But the childish thinking of the progressives is that it is OK for welfare moms to be stay at home....



They think the government supporting them is better than their husband supporting them....it makes my head hurt......alot.



posted on Apr, 16 2012 @ 08:04 PM
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reply to post by xuenchen
 


So lawmakers are saying that stay at home parents should be able to get a credit line based on $0 in actual income?

Umm..

If you make no money.. you shouldn't be taking out high interest credit lines? The working partner SHOULD have to cosign .. it only makes sense?



posted on Apr, 16 2012 @ 08:26 PM
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Perhaps I'm not quite understanding the issue. I live in a "community property" state. That means any income that comes into a marriage is considered owned by both spouses no matter who actually earned it. One exception is inheritances, but for our purposes here that's beside the point for now. But the "community property" aspect may be skewing my thinking because I have always lived with it and don't know another way. My spouse and I have a couple of credit cards: two because if one goes awry we have the other. They are in both our names, though I'm the one who set them up. Both of us, i.e.: our "community" are responsible for paying them off. We both have both cards. When we go on trips we trade so that one has one card and the other has the other card in case one gets lost or stolen. Extraneous information, perhaps.

This law seems to be saying that a spouse who stays at home and has no independent income cannot get a credit card in just his/her name. In other words, he or she cannot get an independent card for which he or she is solely responsible without independent income to pay it back.

What, precisely, is wrong with that?

Are you saying that a person with no independent income ought to be able to get a credit card without knowledge of his or her spouse in his or her own name? Yet, at least in a "community property" state, both are responsible for the debt even though one party knew nothing of it, did not sign off on it, and is suddenly responsible? Why would that EVER be OK with the spouse who did not know?

OK. Let us ask a slightly different question. Does this law prevent me from taking out a credit card in my own and my wife's name, i.e.: her name is on one card and mine is on the other, both with the same number (which is whatt we have now), based on my income? Bear in mind that our "community property" is a joint asset and liability here. I don't think that's the case here.

It just seems to me that in a healthy marriage both spouses come together to arrange for an appropriate level of credit for both parties that serves their marital unit. They agree to it jointly. There ought not to be a way for one spouse to circumvent the other with "private credit" known only to one spouse, especially if both are liable for the debt anyway, as is true in a community property state. If you are really in that frame of mind, you're already split.

BTW. I'm the stay at home person. I don't have a job. My wife works.
edit on 4/16/2012 by schuyler because: (no reason given)



posted on Apr, 16 2012 @ 08:47 PM
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Originally posted by schuyler
It just seems to me that in a healthy marriage both spouses come together to arrange for an appropriate level of credit for both parties that serves their marital unit.


The biggest issue, that I see, is that in unhealthy marriages it restricts the ability of one spouse to get away from the other. I mean, there are a plethora of avenues to take out of an unhealthy marriage, being able to open your own, personal, line of credit used to be one of them. That is the only real issue I have with this law. Otherwise, I see no reason why an individual with no income should be allowed to borrow money that a loan agency isn't even sure they can pay back.



posted on Apr, 16 2012 @ 08:58 PM
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Originally posted by links234
The biggest issue, that I see, is that in unhealthy marriages it restricts the ability of one spouse to get away from the other. I mean, there are a plethora of avenues to take out of an unhealthy marriage, being able to open your own, personal, line of credit used to be one of them. That


OK. So if I'm understanding your position, the scenario posed by AQuestion up there (about four or five posts back) is an OK thing with you?



posted on Apr, 16 2012 @ 09:02 PM
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reply to post by schuyler
 


Dear schuyler,

I should add in that the charges that I had to pay off that she ran up, those included trips that she took with the man she cheated on me with. I should also add that she had credit cards that were in both of our names, she got the cards in her own name based on my income in order to hide what she was doing. I later found out that she would regularly buy jewelry (which she got to keep and I paid for). It has taken me five years to pay off all of the debt and I do this month.



posted on Apr, 16 2012 @ 09:11 PM
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So I see people trying really hard to make an issue out of a good law just because of the person who signed it.

This law does not prevent "stay at home parents" from getting a credit card...they just have to get a joint account with their spouse.

And it makes perfect sense. Why should a credit card company be able to issue an indivdual card to someone who is claiming their spouses income as their own...and that person has no access or control over that card???

I don't understand the issue people have with this...this is how it always should have been. You can't go get any other loan by claiming "household" income without having the actual person who is making the money sign for the loan as well. And a credit card is just an incremental/renewable loan. The only people that should be mad about this law is the credit card companies.

It amazes me to see people try so hard to hate what Obama does...even if it makes perfect logical sense.



posted on Apr, 16 2012 @ 09:12 PM
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reply to post by schuyler
 


Unfortunately no, I'm talking more abusive situations. I was relayed a rather terrible example of this and that's really the only downside I see to this law. I'm just trying to interject how someone can reasonably disagree with this law.

schuyler's is a prime example of why this law should exist, or at least, his state's common-property law should be reformed or abolished.



posted on Apr, 16 2012 @ 09:33 PM
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We haven't had credit cards in years, we pay for everything in cash or we don't get it.

People have gotten too hooked on the credit card drug. I would like to see everybody in the US stop using their cards, pay them off and cut them up. As long as people insist on using them for everything, this country will continue to be credit slaves to the banks. If you have credit cards, you are enabling the banks to be "too big to fail".

If you're not paying them down to zero every month, the banks have you by the short hairs. Financial slavery will leave you with nothing at the end but a bunch of debt and no money. For every person who says "I pay them off every month" there are at least a thousand who don't, and end up using all their disposable income to pay the minimum payments, leaving them broke and caught in an endless cycle of debt and spiraling poverty.

The law the OP talks about is only to protect the banks, not the consumer. Big surprise there. Protect your financial future and say NO to credit cards!



posted on Apr, 16 2012 @ 09:43 PM
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My wife is a stay at home mom, and she recently got a credit card even after stating on the application that she was unemployed and her real job was "homemaker" listing her source of income was her spouse , (me)..

Was no problem, and even a low interest card... so, we just haven't seen the effect of this new law here in Washington State for some reason... What is even more strange is that my credit isn't the greatest after suffering from a few identity theft incidents, and she still received her card on just her own credit report, without having an actual job besides my income..

Maybe some creditors are not following that new rediculous law.. And it was NOT a joint account...

The law is rediculous because it is big government deciding things that they have no business deciding... Those decisions are the banks decisions because they are the ones offering to contract with people.. It is called "business" and it is no business of B. Obama... but he loves to dictate everything for everybody


edit on 16-4-2012 by alienreality because: ETA



posted on Apr, 17 2012 @ 10:08 AM
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This proposal makes sense, unless welfare is considered income.

Otherwise, substantiating a proposed amount to borrow with an ability to repay makes sense.



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