Credit card restrictions might not be favourable for women

[Sunday, March 20th, 2011]

A furore has been created due to some of the proposed regulations that will come into effect under the Credit Card Act. The Federal Reserve has been requested through a statement from Carolyn Maloney, chief author of the Credit Card Act, to revise some of the provisions of the act. As per the proposed regulation, under the ‘ability to pay’, provision, credit card companies have been mandated to look at the independent income of the consumer rather than the household or family income when it is time for approval of a new credit card or increase of the credit limit.

This rule was effectively targeted at preventing consumers younger than 21 from getting credit cards by reporting the incomes of the parents, there could be a side effect on non-working women as well. Women who earn less than men or are housewives with children would be at a disadvantage and wouldn’t be able to get a credit card for their own. The approach, according to some should be revised mainly because the intended proposal was to reduce the abuse of the credit cards by the younger lot but wasn’t supposed to restrict stay at home parents who don’t have their own source of income. Although it is necessary that college students should be protected somewhat by credit card issuers that target students. It shouldn’t harm the chances of stay at home mothers in specific. The provisions were designed especially after a lot of credit card issuers tried to woo students to use their cards leading them to crippling debt.

There has been uproar mainly because the proposed restrictions would greatly limit the economic power of women and could be problematic in case of abusive partnerships. A controlling spouse might not really allow their wives to work, which means such women are left without their own source of income. An independent credit card would help them establish their own path and work their way out of a potentially dangerous relationship. By preventing such women to apply independently for their credit card, the regulation could turn out to be a dangerous set-back to the development and independence of women in times to come. A lot of experts feel that there are various other ways of dealing with credit seekers who are under 21 years of age and hence this proposal to limit people on the basis of income isn’t the right way to do it.

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