In an interesting post at Double X, Helaine Olen explains that a new law aimed at limiting credit cards to college students might inadvertantly restrict credit cards to stay-at-home parents.
Olen also points out that women were only issued credit cards with their own names in the mid-70s.
It wasn’t so long ago that women were denied all independent access to banking, credit, and other financial services without their husbands’ permission. This changed with the Equal Credit Opportunity Act in the 1970s, something we now so take for granted that it almost never occurs to us that a woman’s right to her own credit and credit history is a relatively new phenomenon. It’s so new that many of us over the age of 40 can actually recall our mother’s first individual credit cards and the reverence with which those cards were treated. (In our house, my mother’s first individual card was from Macy’s, a store she eventually would go on to work for as a saleswoman for almost a decade.)
Despite being in that age group, I'll admit that I didn't realize that women couldn't get credit cards in their own name until the 1970s. So, I called my mom to ask her about it. She had always managed the family finances, even endorsing my dad's checks for him, so her name on the credit card wasn't a big milestone for her, but she recognized the importance of women having their own credit history apart from their husband.
While it is very important to reform credit card practices with college aged students, the laws need to be written in such a way that don't impact on lesser-earning spouses.
Apt. 11d 
When my parents divorced in 1975, it was a very big deal for my mom to get a credit card as a single woman. It seemed like there weren’t big national cards you applied for then, your Visa or Mastercard was through a local bank. My mom was actually friends with a banker, and he had to sign off on her getting one, because it wasn’t typical to just approve single women. I completely remember my mom talking about all of this, I was 11 at the time.
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Yet, I should’ve added that my 19 year old got an application for an American Express card this Saturday. She has no real income.
She babysits and housesits once in awhile, and she has a work study job logging film for a prof.
She does not need any credit beyond the student loans she is taking on. Glad to hear about the new regulations.
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I remember my mom getting a credit card. It used to irk her that she managed the finances, but lacked some of the same rights that my dad had. The 70s were also a time when you could write all your credit card debt off your taxes (at least the interest). Can you imagine if we could do that now?
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“The 70s were also a time when you could write all your credit card debt off your taxes (at least the interest).”
Megan McArdle says that all interest used to be tax deductible. Currently, we have only a few areas like that left (business interest, I suppose, and mortgage interest).
I’ve also heard that back in the day, bankers would not give mortgages based on dual incomes, but would only do so based on the husband’s income. The switchover to lending on the basis of two incomes is not really something that we should stand up and cheer about, though, because it must have contributed to the creation of the Two Income Trap and the housing bubble.
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It’s misleading to compare the current reform to the pre-ECOA state of affairs.
My understanding is that the current reform says you can’t get credit on the basis of someone else’s income without their permission, even if that person is your husband. That doesn’t seem unreasonable to me. At least, it’s a standard that we apply to every other form of credit that I can think of (car loans, mortgages, etc.).
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“My understanding is that the current reform says you can’t get credit on the basis of someone else’s income without their permission, even if that person is your husband.”
That sounds reasonable.
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When I was a student at Rutgers in the late 70s, I had a work study job in one of the departments. I worked with a woman who had just divorced her husband and was starting anew. She had put her husband through grad school (science PhD) working as a secretary, and was the sole source of income. Even though she was the main earner, everything was in his name. When she filled out a credit card application giving her income, the card came back in HIS name. She never questioned this. But when she divorced him, she could not get any credit in her own name, and had to buy something on time at Sears and pay it off before they would give her a card in her own name.I never forgot this lesson. I always tell this story to women who say they are not feminists! I have to get that book by Gail Collins that is a history of facts like this!
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“you can’t get credit on the basis of someone else’s income without their permission, even if that person is your husband.”
That seems kind of demeaning. A married couple is a team, either one of whom should be presumed, by the outside world, to speak for the household. A store or a bank shouldn’t be prohibited by the government from extending credit to the wife, if they find her reliance on the joint marital resources to be credible. The subprime crash, I say with assurance, was not caused by wives who charged too much on the family credit card.
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y81,
I listen to a lot of personal finance radio, and “I just found out my spouse took out new credit cards without telling me and put $20-30k on them” is a golden oldie.
That said, I think you can probably forestall that sort of thing by having regular sit-downs to pull and examine each spouse’s credit report.
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regular sit-downs to pull and examine each spouse’s credit report.
That’s why I don’t tell my wife what my SSN is.
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“My understanding is that the current reform says you can’t get credit on the basis of someone else’s income without their permission, even if that person is your husband.”
In fact, this could be very unreasonable, depending on the details – ie, what do they mean by “someone else’s” income?
Just because my husband earns the salary doesn’t mean it isn’t my income. Because it is. The money that comes into OUR household is OUR income.
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