While the Credit Card Accountability, Responsibility and Disclosure Act was designed to help protect consumers from potential problems related to those accounts, one aspect of it actually created some for a large portion of the population. Now, a new rule has been put into place to remediate that issue.
The CARD Act mandated that consumers had to have their own source of income to qualify for accounts in their names, but that left many stay-at-home spouses who relied on their husband or wife’s pay without the ability to obtain accounts of their own. However, the Consumer Financial Protection Bureau recently announced the finalization of a proposal that would allow credit card lenders to consider shared income when reviewing an application from someone over the age of 21 without one of their own.
Data shows that the rule led many Americans who would have otherwise been considered creditworthy to be denied in their attempts to obtain credit cards, the report said. And though the rule does not specifically state that only stay-at-home spouses or partners will be eligible under these new rules — but rather any consumer with a reasonable expectation to access another person’s income — stay-at-home parents stand to benefit most.
“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.”
The latest information from the U.S. Census Bureau shows that more than 16 million people across the country are married but do not work outside their homes, accounting for about one-third of all married couples, the report said. This means that those people will then have access to credit that they haven’t been able to access since the CARD Act was passed in 2009.
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Overall, the legislation has been a significant help to many consumers. For instance, rules about the ways in which those under the age of 21 can access these accounts has significantly reduced the average amount of debt college students leave school with, as well as the percentage of those young adults who even own such cards.