Earlier this year, the Fed ruled that credit card applications should ask about a consumer’s individual income or salary rather than his or her “household income.” This isn’t just for students under 21, but for everyone. That means that a stay-at-home parent is considered as unworthy of credit as an unemployed college kid–-and seven out of eight stay-at-home parents are mothers. No one without a pay stub, no matter the value of her contribution to her household, can get a line of credit unless her spouse cosigns the account.
And, as the author notes:
I can’t overstate the psychological effect of relying completely on a spouse for such an essential part of adult finances. Refusing credit completely devalues a stay-at-home parent’s contribution, essentially saying that the household’s income belongs solely to the wage-earner.
In addition to contributing to the psychological shame of being an unequal partner in a relationship, this also renders stay-at-home parents financially vulnerable in the case of divorce. If a stay-at-home mom’s spouse is irresponsible, her credit score will fall-and she can’t repair it without her own line of credit.
The most dire implications are for women trapped in abusive relationships. If a woman can’t get a line of credit without her husband’s approval, she is less able to leave a failing relationship. According to Rene Renick of the National Network to End Domestic Violence, a joint line of credit opens an abused woman to even greater exploitation. Financial abuse is one of the least recognized but most significant ways that a batterer controls his victim: Not only can an abusive partner use the money irresponsibly and ruin the victim’s ability to get credit later, but he can use the account to track her if she tries to leave.
“Financial abuse occurs in 98% of abusive relationships. I can’t tell you the number of women who’ve said, ‘I stayed in the relationship longer than I wanted, or came back, [because] I was afraid I wouldn’t be able to feed my kids,'” says Renick. “[The Fed’s regulations] will limit a woman’s ability to have access to assets on her own. Batterers will more than likely use this to … keep her entrapped in the relationship.”