They're making it harder for unemployed spouse to get credit car

nancybee_2010May 20, 2012

Have you heard about this? I actually don't know much about it, but there's a petition against it on the internet that has been signed by 30,000 people.

What are your thoughts, I know this could affect many of us.

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CaroleOH

Are you talking about a non working spouse like a homemaker, or a spouse who is normally employed but currently doesn't have a job?

I used to work for 25 years, but probably 7 years ago, quit my job to stay home. I opened a VISA card in my name only about 5 years ago because I wanted to have a credit record in my name only in case for some reason I needed to get credit in the future - ie. DH leaves me etc.

I didn't have a problem at all. Our other accounts are joint credit cards with both of our names on them, but they consider my DH the primary card holder - so that's why I was afraid of not being primary on something other than my Macy's card!

If you apply for a card jointly, it seems like they would look at your household income and credit scores to determine your interest rate and credit limits.

While, I can understand that it would be very frustrating to not be able to get credit, if you don't have the income to pay your credit card, how would you expect them to give you a card? I had to list my DH 's income to get mine and was listed as a homemaker on the application.

I haven't seen this particular article, but it seems if you have a good credit history with your bank and have some income and not already 3-4 VISA cards, they are giving out credit cards fairly easily.

    Bookmark   May 20, 2012 at 6:25PM
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terriks

This happened to me last fall. I once had a Macy's card in my own name, but because I never used the account it was closed. When I had opened that Macy's account I was either unemployed, or employed part time, like I am now, I don't exactly remember when it was, but it was about 5 years ago. I just gave them my name, SS# and Visa acct # and was instantly approved. Then last fall I was buying some boots and could get an additional $20 off if I used a Macy's card. I went through the application process, which was more intensive than the past, and I was denied. They asked me for my income, mortgage payment amount, etc., and denied me. So things have definitely changed in the last few years.

    Bookmark   May 20, 2012 at 7:36PM
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lukkiirish

Nancy, I'm a former credit card abuser and I used to run a small credit card department as well so maybe my perspective isn't one most want to hear but I think for once, the banks are getting it right. If you stop to think about it some of the housing crisis happened because people were in homes they couldn't afford. They were extended credit they couldn't pay and look where that landed us. And yes, some of those people were even unemployed.

There is a difference between being an authorized user and being a credit card holder. As the holder, you are the financially responsible party but if you're unemployed, how can you guarantee payment to the bank? And historically, the percentage of people who use credit wisely especially when they are unemployed is very low. Extending credit to someone unemployed is like saying, here, it's okay to be financially irresponsible. It would be different if they were saying you can't be an authorized user but they're not, that's because as an authorized user there is the employed cardholder they can turn to for payment. IMHO, this country has become way too reliant on credit and seriously needs to cut back. The first step to accomplishing this is by forcing people to stop buying when they don't have the means to pay for it. I learned my lesson the hard way but other then our house, we are debt free now as a result.

I know too that for some parts of society this is not an easy thing to swallow. For example, stay at home mothers are sort of caught in the cross fires and are getting the short end of the stick, but sometimes that can't be helped.

    Bookmark   May 20, 2012 at 7:43PM
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cyn427

I have to agree with Carole and lukki. I only use one card and I pay it off every month. I am all for a pay-as-you-go program around here. If I don't have the cash for it, I don't buy it.

    Bookmark   May 20, 2012 at 8:04PM
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nancybee_2010

I have only one card too and pay it off at the end of the month. I wish I could find the article, and read it again more carefully! Maybe it was exaggerated, but it really made it sound worrisome!

    Bookmark   May 20, 2012 at 9:23PM
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terriks

I have two cards that I use regularly. Both get paid in full each month. I used to only use a Visa, but got an American Express card because that is all that Costco takes. We use our credit cards for most purchases, and earn points when we use them. I used to use a debit card for everyday purchases, but when both of my sons were victims of debit card fraud I switched to using the credit cards, since they have more protection built in.

    Bookmark   May 20, 2012 at 9:48PM
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gibby2015

Ya, that makes sense - no income, no credit. I just started reading a book called The Big Short - inside story of how we got into the huge economic collapse. Amazing amount of credit extended to people who could not afford to pay including people who were unemployed.

    Bookmark   May 20, 2012 at 10:37PM
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judithn

The reason an amazing amount of credit was extended to people who could not afford it was because the banks were making so much money. It didn't matter if to them if the end user defaulted, in fact they more or less expected it. The fees and profits they generated from packaging and reselling the loans were so high it didn't matter. They were counting on lax regulation and lack of government oversight all along. We have the student loan debacle looming, with young people unable to get jobs to pay off their huge student loans. Many people believe it will be a serious crisis....soon.

    Bookmark   May 21, 2012 at 6:45AM
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judithn

The reason an amazing amount of credit was extended to people who could not afford it was because the banks were making so much money. It didn't matter if to them if the end user defaulted, in fact they more or less expected it. The fees and profits they generated from packaging and reselling the loans were so high it didn't matter. They were counting on lax regulation and lack of government oversight all along. We have the student loan debacle looming, with young people unable to get jobs to pay off their huge student loans. Many people believe it will be a serious crisis....soon.

    Bookmark   May 21, 2012 at 6:53AM
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lukkiirish

Well, we also have a Municipality crisis starting to rumble, a similar problem with commercial property looming and now that the banks know what regulations are going to be in place, foreclosures on residential properties are starting to rise again.

The banks, wall street, corrupt politicians, their corrupted policies and greed for higher profits has literally ruined our entire financial system and futures.

    Bookmark   May 21, 2012 at 8:32AM
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stinky-gardener

Here is an article that discusses changes proposed in 2009. The shift is intended to address credit cards landing in the hands of unemployed college students, but the repercussions would extend to SAHP's and SAHW/H's.

It does, even if not on purpose, seem to be a throwback to the notion that a stay at home partner is not an equal partner. Household income, imo, should still be the criteria.

Most of us here are obviously not dependent on credit cards. Certainly we all seem to agree that it's no tragedy to be without a credit card from the standpoint of purchasing power. Indeed, if we can't afford to buy unless we can charge it, we should do without. I think most of us understand that and live that way.

Still, it is important for unemployed spouses to have their own credit history. In the event that they find themselves on their own, a solid pattern of using and paying for credit on time will serve a newly solo person very well. Dependent spouses without their own credit history are placed in a financially vulnerable position.

We have one major credit card, and it's in my name. We have one store credit card, and it's also in my name. This gives me a history and a FICO score of my own, though I've been a SAHW for most of my 25 year marriage. My DH wants me to have that for myself, as do I.

Here is a link that might be useful: credit

    Bookmark   May 21, 2012 at 8:36AM
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dgranara

I am a real estate and bankruptcy paralegal, so I see a lot of personal financial info on a day to day basis.

While we certainly have bankruptcy clients who are "victims" of economic crises (lost jobs, medical bills, etc.) the vast majority of our clients are people who are just plain irresponsible when it comes to credit.

My husband and I have three credit cards between us. The Debtor in the Chapter 7 petition I am currently working on lists sixteen unsecured creditors*. Blows. My. Mind.

*not even close to being the highest number of creditors I've seen, btw.

    Bookmark   May 21, 2012 at 10:15AM
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francypants

I remembered this post when I was on the phone with my banker renewing a CD (shuddering at the rates). I'm a SAHW and figured I could no longer get a CC in my name only. We discussed the situation and he said because we were in the best checking account class and had other dealings with the bank that I could qualify on my own. He checked his computer and approved a Visa Card with no annual fee and 1.75 cash back. That's even better than our Discover pays us.

We always pay our balance off monthly. I just wanted more credit in my name in case anything ever happened to my husband.

    Bookmark   May 29, 2012 at 10:30PM
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