CARD Act could strip stay-at-home partners of financial identity

Credit Card Applications

The new CARD act may have the unintended consequence of stripping stay-at-home spouses of their financial identity. Image: rubenerd / Flickr / CC BY-SA

The CARD Act, passed in 2009, is intended to help protect consumers. Credit-providing companies are disallowed from providing credit to individuals who cannot prove income. One unintended consequence of these new rules is that stay-at-home parents may lose some financial freedom.

Requirements of the CARD Act

The CARD Act contains several provisions intended to protect consumers from unfair or inappropriate practices of credit card issuers. The Act also created several new rules that change how card companies consider income. Community property and household income can no longer be considered as “income” on a form for credit. Instead, all income on a form for credit must be individual. This is intended to keep consumers from over-claiming income or qualifying for credit that they do not have the income to pay back.

Effects of new CARD Act rules

Though it may not be intentional, the CARD Act could have a disproportionate effect on stay-at-home partners or parents. In households where one partner works and one partner stays at home, the CARD act prevents the jobless partner from claiming any of the income of the working partner. While this prevents individuals with no independent income from getting credit they may not be able to pay back, it also prevents stay-at-home spouses from building an independent credit history. No credit history can mean fewer job opportunities, greater financial dependence and added problems if the relationship ends.

The CARD Act and community property

In 10 of the 50 United States, married couples share what is known as “community property.” This shared property law, which can be superseded by any pre- or post-nuptial agreement, means that partners in a marriage have equal share of anything earned during the marriage. For couples in community property states, the CARD act will require them to split their financial lives. For couples not in community property states, the CARD act simply means that one partner cannot obligate the other partner to bad credit loans
or other debt without their explicit agreement.

What the CARD Act means to you

If you are a stay-at-home partner, these new provisions of the CARD Act may have the biggest effect on you. If you stay at home and do not have paying employment, you may be required to get your partner’s signature on everything from credit card applications to personal loans. This means that establishing your own, independent credit history is important. Employment or some way of verifying monthly income from your partner is important, as is maintaining open lines of communication about finances.


National Consumer Law Center
The Library of Congress

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