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Consumer Protection or Gender Discrimination? Why Married Women Are Being Denied Credit

Updated on April 12, 2012

Have you always been responsible regarding your credit? Always paid back your bills? Assumed your good credit would ensure hassle-free credit card or loan applications? If you make substantially less than your spouse because you are a stay-at-home mom, work part-time, or have a lower-paying job, you may have a rude awakening if you try to apply for a credit card.

I found this out the hard way when I recently applied for a credit card. I did, after all, have a solid job and amazing credit, never once being late on a payment or holding credit card debt. 7-10 days later the rejection notice came in the mail: I had been denied.

Assuming it was a fluke, and knowing that a credit card denial reduces credit ratings, I called the credit card company to correct the situation. What I got was a barrage of questions about my income and our household debt. I found myself trying to convince them that I was fully capable of paying my bills.

What I learned was that my individual salary was being weighed against our family’s debt. This seemed fundamentally unfair. After all, we had made a decision that I would work part-time based on our household income and responsibilities, and we could afford it.

Ready to write an angry letter to the credit card company and the store at which I was applying for credit, I did a little online research and found out that this was not a fluke after all. It is federal law.

Federal Rule on Credit Cards

As of October 1, 2010, a Federal Reserve rule mandates that credit card companies only consider individual income rather than household income when assessing an individual’s credit card application. The effect is that women or men who choose to stay home (or work a reduced schedule) will have a much harder time opening up their own credit card accounts.

This rule was put in place as part of the effort to prevent abuses by credit card companies by issuing credit cards to people who can not afford to pay them back. Individuals applying for a credit card must now prove that they can “independently” pay back credit card debt. For households with combined finances (and combined debt), this could prove impossible for the spouse who makes less money, and in the long run be damaging for her or his financial health.

NOTE: This article primarily focuses on women, as they are more likely to earn less than men, work part-time, or stay at home. However, this issue affects both men and women who earn less than their spouse.

Implications of this Rule

While intended to protect consumers, this Federal Reserve law on credit cards has a host of unintended negative consequences.

  • It unfairly penalizes women and men who chose to limit their work schedules to care for their children. This rule makes it a requirement that individuals applying for a credit card prove they can make repayments based on their own assets. When considering a married individual who has combined finances with their spouse, this requirement is often impossible to achieve. Even if the applicant has income, there may be no liquid assets in his or her name only, making it difficult or impossible under this law to prove that they individually could pay back debt.
  • It further devalues “women’s work. “Women’s work” (childcare and keeping the home) has long been undervalued, but this rule institutionalizes the idea that work performed in the home is not a meaningful contribution. Different organizations have tried to estimate the value of “women’s work” in the business world, based on the job duties (e.g., facilities manager, van driver, psychologist, cook, housekeeper) and hours worked. estimates that salary at about $115,000. Even as we are starting to put an economic value on this work, rules like this further devalue it and create an uphill battle for those trying to establish their own financial history.
  • It increases obstacles for women to achieve financial health. Women who have good credit and are unaware of this rule may apply for a credit card only to be denied. A denial decreases an individual’s credit rating. In addition, lack of a credit history leads to a lower credit score, impacting the ability to get loans, cell phone accounts, and make purchases. While this may not have a substantial impact on a married woman, women who are divorced or widowed and have not established good credit may be unable to get basic loans.
  • It increases women’s dependence on men. This rule means that women who make substantially less than their spouses (because they don’t work, work less, or simply make less money), but who have shared debt (mortgages, other loans) will not be able to get credit cards without the inclusion of their spouse. They will be completely dependent on their husbands to make purchases. In extreme cases, for example where domestic violence is an issue, women’s lack of credit and financial independence presents serious obstacles to leaving an unhealthy relationship.

Consumer Protection, or Gender Discrimination?

The Federal Reserve rule was established as part of an effort to reform credit card practices to protect consumers. While anyone who makes less than their spouse may be affected, women are most impacted by it, since they are more likely to have a lower salary, work part-time, or stay at home to take care of the children and households.

At the same time, the income of the couple as a unit is what is assessed when determining mortgage and other loan amounts. To then weigh a woman’s individual income and assets against the couple’s joint debt creates an impossible uphill battle for her if she earns less.

What You Can Do

  • Think twice before applying for a credit card. A lot of the perks are alluring (10% off, free monogramming, coupons), but think twice about whether you really need another credit card before applying. Do you need the additional line of credit? Will you be able to pay off the balances? Are the perks worth it?
  • If applying, read the application carefully. Make sure you understand the terms and conditions of the credit card. Be aware as to whether you are applying individually or jointly. If you are applying as an individual, understand that if there is a significant gap between your salary and that of your spouse and if you have joint debt, that you may be denied.
  • If you are denied credit, request a credit report. The one advantage of a credit card denial is that it entitles you to a free credit report. Ask for it, and look it over to see if there are any red flags.
  • If you think you have been unfairly denied credit, call the credit card company and argue your case. Credit card companies do have some flexibility, and may just need some additional information to change their decision. Ask questions about why you were denied and push back if you believe that the decision is not the right one. As they did in my case, they may reverse the decision.


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    • LauraGT profile imageAUTHOR


      6 years ago from MA

      Express10: Sage advice, though unfortunately in this case I don't think looking at a credit report would help as even those with excellent credit can be denied. My lesson: not to apply for credit unless it's absolutely necessary (e.g., to establish good credit where there is none!)

    • Express10 profile image

      H C Palting 

      6 years ago from East Coast

      This is a good hub, I too didn't know about this law. However, I would go a step further and say that anyone applying for credit needs to look at their own credit report prior to applying as they might find errors or ID fraud that they can catch before getting a denial and lowering their credit score a few points. Voted up and useful.

    • LauraGT profile imageAUTHOR


      6 years ago from MA

      DeborahNeyens, thanks for reading and commenting!

    • DeborahNeyens profile image

      Deborah Neyens 

      6 years ago from Iowa

      Interesting article. I had no idea this law existed.

    • LauraGT profile imageAUTHOR


      6 years ago from MA

      Jillian and Pamela: Thanks for reading and for your comments. I hope my article will help others avoid my mistake!

    • Pamela99 profile image

      Pamela Oglesby 

      6 years ago from Sunny Florida

      I had no idea there was such a law and it is so unfair. If you have always paid on time I would think that indicates you can afford your debt. This is a very thorough, well-written article. Rated up and useful, and tweeted.

    • Jillian Barclay profile image

      Jillian Barclay 

      6 years ago from California, USA

      Excellent article! Your research is astounding and we do seem to be going backwards...

    • LauraGT profile imageAUTHOR


      6 years ago from MA

      Thanks for the extra information Vicki. It's hard to believe that this type of nonsensical, unfair treatment is the law! Whether or not it was the intention of the law, I often wonder how lawmakers weigh the negative consequences of what they are doing when they decide these things. In this case, obviously, the potential damage to women was not considered.

    • profile image


      6 years ago

      Nice job Laura. I have just discovered that if you apply for too many credit cards (for the perks), it lowers your credit "number"; so beware the lure of 15% off for opening a store card! FYI all consumers are entitled to a free credit report annually. Inaccuracies can be cleaned up.

      As I read your article, the mantra 'we are going backwards' plays in my head:(


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