Options for spouses who have no income but want a credit card | Finance
From: Duncan Jenkins
The Credit Card Accountability and Disclosure Act of 2009 was largely consumer-friendly. However, a provision required credit card lenders to consider individual income, not household income in general, when granting individual credit card accounts. This has put many stay-at-home spouses at risk of credit rejection, even with strong credit scores. The rule has since been changed for spouses with no income. Other alternatives are also available for those spouses who want credit cards.
Amendment to the CARD Act of 2009
The amendment to the CARD Act allows lenders to look not only at individual income, but also at household income. The provision requires the applicant to be at least 21 years old and have a “reasonable expectation” of being able to access household income. This amendment was announced by the Consumer Financial Protection Bureau after stay-at-home spouses appeared to be unfairly targeted in the CARD Act. So if you don’t have your own income but have access to your spouse’s income, you have a chance of getting approved for your own credit card.
Credit requirements
The amendment to the CARD Act does not change the prerogative of lenders to base their loans on their own internal credit criteria. A spouse with no income and poor credit will always have a hard time qualifying for an individual credit account. However, with good credit scores and access to household income, a stay-at-home spouse with no personal income has a high chance of qualifying for consumer credit cards.
Joint accounts
If you’re a stay-at-home partner with blemished credit and no personal income, you still have options. One of the most popular ways to get credit is to open a joint credit card account with your spouse. If your spouse is the breadwinner and has strong credit scores, most lenders will consider a joint credit application favorably, despite your credit failures. Lenders view two obligated signatories as favorable credit risk, particularly if one of the signatories has sterling credit.
Authorized signatories
Authorized signers on credit accounts are those who have access to the account to purchase but are not obligated to repay the account. Getting a spouse on a credit card as an authorized signer is a good way to get better credit, as long as the obligated partner pays off the credit card loan consistently. Parents often add teens to credit card accounts as signing officers to help teach credit management skills and build credit.
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Biography of the writer
Based in Eugene, Oregon, Duncan Jenkins has been writing finance-related articles since 2008. His specialties include personal finance counseling, mortgage/equity lending, and credit management. Jenkins earned his bachelor’s degree in English from Clark University.