Stay-at-home credit application loophole could put economy at risk

Published: Thursday, Oct. 18 2012 3:12 p.m. MDT

A new credit card law has a loophole that some people say could put the economy at risk.

Paul Sakuma, AP

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The Consumer Financial Protection Bureau decided to allow credit card applicants over 21 years old to apply using household income, a reversal from its last stance, according to CardHub, a credit card comparison website.

The decision reverses the Credit CARD Act of 2009, which required stay-at-home spouses to apply for credit using their individual income, instead of the spouse’s.

While the recent moves by the CFPB promotes spousal equality, approving a credit card on a spouse’s income without considering household debt could hurt the economy.

“The CFPB certainly means well, but what it is suggesting will only hurt us in the long run,” Odysseas Papadimitriou, a former senior director in Capital One’s credit card division and current CEO of CardHub, said in a press release.

Papadimitriou suggests credit card companies review joint applications in which the combined income of the couple is listed along with its debt, in addition to providing a secured card option that allows cardholders to place a deposit on the card that would work as their credit line.

EMAIL: sparker@desnews.com

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