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Monday, May 9, 2011

I Hope You Didn't Think You Were a Person or Anything

I talk a lot about judgment doled out to stay at home parents by those in the working world, by other parents, by non-parents and by themselves. That's all small potatoes compared to a new ruling by the Federal Reserve.

Credit card companies have been told to stop issuing cards to people who do not pull in an income.

On its face, this ruling seems to make sense. People who don't make any money shouldn't have the responsibility of having to pay credit card companies back for their consumption needs.

Behind that face, however, the issue is so much deeper. Behind that face are women and men who stay home to take care of their kids while their spouses work, providing the more disposable income. To prevent these men and women from being approved for credit takes their legs out from under them, squelches their independence and deems the work they do worthless.  Now I don't care if you don't think being a stay at home parent is a career or even a job. This isn't about needing appreciation for the work done or not done. This is about being forced into a box because of personal life decisions.

This rule is unrealistic and it oversteps boundaries, in my opinion. The economy still falters. Many have lost their jobs. The saving grace for some has been the ability to stay at home with the kids, raising them and saving money on childcare costs while they look for other work. Other work that hasn't been coming. Now The Fed tells us that we can no longer get credit unless we can prove we can individually pay for it?  Okay, fine. Make the jobs come back and society will get right to work on that. Or not. Because it's our choice to work or not if our families can afford it, and repercussions should not be lauded over us for our personal family choices.

What about people who need to build their credit? They can't. What about those stuck in abusive relationships? Without access to credit, they're left crippled, forced to stay with their partners, given one less avenue in which to forge their escape or start a new life if they so choose.

This takes the stay at home parent back to a level of dependence the country hasn't seen since the passage of the Equal Credit Opportunity Act of 1974, which prohibits credit issuers from discriminating on any basis, including gender.

Because this is discrimination, plain and simple. You can say you're looking out for the consumer. You can point to the housing bubble collapse and blame the consumer. You can tell us it's for our own good. But you're wrong. It's constricting, belittling, and, honestly, it's dangerous.

Stay at home parents are not irresponsible with their money simply because they're not currently making any.  And while their home situation is okay right now, everyone deserves to have an individual safety net should circumstances change. The Fed is taking that net away from many parents. A death, a divorce, an abusive situation...without a credit history, the victim is rendered helpless on their own. It's a trap.

I have my health insurance through my husband's job. I have my car insurance jointly with my husband. I hold a joint bank account with him. If the government and insurance companies and other businesses accept my worth combined with my husband's, why not credit card companies? Or are my insurances and bank account next on the chopping block?

Well, go ahead and take them. I don't need them. I won't even notice they're gone. I'll be too busy over here in the kitchen in my heels and apron, making dinner for my provider and asking him if I can borrow a few dollars to buy the brood some shoes.

Let's not let it get to that point, okay, Fed?  Just because we stay at home does not mean we're not independent. But it will if you take all adult avenues away from us.

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  1. I have to say, the situation makes me deeply uncomfortable. It's like in The Handmaid's Tale, almost... very dystopian nonetheless. I hope someone beats sense into... someone. :(

  2. Oh my blood is boiling! I can see they would be worried about paying the money back, but thats my problem, not theirs. Okay, lower the credit limit until I prove I can pay off my bill, but dont deny me because my husband works at a paycheck job while I wrangle and wrestle children. Seems we are headed back to the 30's in the US. Whats next, a signed consent form to be at the grocery store without my husband?

  3. I disagree with denying credit to SAHMs, but Pretty, it isn't just your problem if you can't pay back your bill. It's the country's problem and the economy's problem. I understand why this came about - many people are now responsible for those that can't pay back the credit they've borrowed - but taking it away from people who don't make money on paper isn't the answer, either.

    Credit companies need to crack down more on people who are defaulting, and not issue credit to people who have had severe problems in the past. Unfortunately, that's not the Feds' answer here, which is scary. Don't take it away from customers who have shown good credit in the past or are trying to build credit - everyone deserves a chance. But if that SAHM or SAHD is shitty with credit? Then yeah, I agree with denying them in a heartbeat. Let them prove they're shitty first, though, Feds.

  4. The sad thing is that there are people out there with full time jobs who don't pay their debt. I would find a stable stay at home mother who is NOT on welfare more fiscally responsible than others who feel they have the money to throw around because they do work!

  5. Everyone seems to be ignoring the fact that someone without income in their name can still have a joint credit card account, and can build a credit history that way. Where's the problem here?

  6. This concerns me a lot. It's not always a matter of "personal life decisions"... what about people who care for a special needs child or elder relative?

  7. The problem as I see it, or one of the many, is that not everyone has a magical, supportive always loving relationship with their prince charming. Women in a bad family situation have now had another means of escape taken from them. A joint credit card is essentially a monitoring by your spouse, which is undesirable to many adults, women or men.

  8. These are very different problems than the "OMG SAH MOMS CAN'T ESTABLISH CREDIT!!!" that is being tossed around as a headline for this bit of news.

    There are other solutions for people in potentially abusive relationships (Secured credit, anyone? Good old fashioned savings?) I think that's a bit of a red herring, though it does make a nice emotional appeal.

    As far as "monitoring", if you're already sharing finances, aren't you already monitoring each other's spending? If you're the SAH parent, certainly you could get to the mailbox first (or open your own PO box) to grab that joint credit card statement and pay it out of your personal bank account.

    For the record, I don't entirely agree with the government trying to protect us from making whatever credit arrangements we & the card issuers mutually agree to, but if they're going to regulate this stuff, this ruling is entirely consistent with the other protections that have been enacted.

  9. I find nothing untrue about that headline, as under this ruling SAHMs cannot establish credit. There's plenty for readers to research to go deeper and determine their feelings.

    Also, your privilege is showing, anon. Not everyone has "good old fashioned savings" and not everyone can open their own PO Box and that's not necessarily their fault.

  10. I wasn't talking about your headline, specifically, this story is all over the interwebs. But you're stretching it a bit too:

    " If the government and insurance companies and other businesses accept my worth combined with my husband's, why not credit card companies?"

    The credit card companies can do exactly that, with a joint credit account or authorized user. That has not changed, nor has MOST stay-at-home parents' ability to establish a credit history that way.

    I don't understand how one can make any argument that someone who is unable to put together any sort of emergency savings should be issued a credit card. That's not privilege, that's understanding what got us into the mess that led to the CARD Act to begin with.

  11. "I don't understand how one can make any argument that someone who is unable to put together any sort of emergency savings should be issued a credit card."

    Bob has a job. Terry stays home with the children. Terry is given Bob's debit card when she needs to buy groceries for the family. Bob pays all the bills and puts gas in their only car. Terry has no income of her own and no way to get income of her own (remember one car plus the kids). Terry is obviously in a bad situation with an extremely controlling husband. Terry has no way to build savings.

    Were she able to temporarily pay for things on credit, Terry might have the ability to get out of her controlling and abusive situation, get a job and pay the credit card off.

    Still confused?

  12. What happens if Terry gets and uses a credit card, and then isn't able to earn enough to pay it back? Is this sort of scenario really a good reason to extend credit -- in general -- to people who have no demonstrable means of paying it off and who cannot put together any savings on their own?

    Other options that don't require racking up debt with nothing more than a hope and dream of paying it off:

    Terry could get a little cash back each grocery trip and stash it in a coffee can.

    Terry could use that savings, jewelry, or household items to obtain a secured loan that would help establish a credit history.

    Terry could get a job once the kids hit school age, or could barter childcare with a friend to have time for work. Lots of things can be done from home and/or without a car.

    Terry could seek help from friends, church, a women's shelter.

    The scenario you describe is a sad one, but it can go the other way, too (and has all too foten, hence the impetus for this portion of CARD Act)... say the non-working spouse is the abusive one (or even just ignorant, stupid, or reckless). Why should they be able to go out and obtain credit secretly, putting the family on the hook for debt that can only be repaid by the income of the working spouse?



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