A credit card can be a helpful financial tool for Texans if used correctly. It can provide funds in the case of an emergency, such as when a person becomes stranded somewhere without cash. However, a credit card can also cause harm when a person in economic distress is forced to rely on it for everyday things.
Now, a new proposal from the federal agency tasked with protecting consumers from the kinds of credit card debt difficulties that led to the recent recession has ignited fears in some quarters. The concern is that the proposed change could ultimately put the economy at risk once again.
The Credit CARD Act, which went into effect in 2009, requires stay-at-home spouses to report only their individual income when applying for credit cards. This prevents them from using their household income, which would include their spouse's income. This tends to make it more difficult for stay-at-home spouses to get a credit card Critics say it makes it too hard.
Recently, the Consumer Financial Protection Bureau (CFPB) put forth a proposal to reverse that provision and allow adults 21 and over, including stay-at-home spouses, to list household income on credit card applications.
The CFPB's proposal would promote spousal equality, according to some pundits. Others say it could lead families into deeper credit card debt and damage the economy. To limit future defaults, proposal opponents suggest that credit card companies review joint applications that list both household income and household debt.
It's unclear how this debate may work itself out. In the meantime, there are plenty of families who find themselves in dire credit card debt right now. And one of the quickest and least disruptive ways of getting out that quandary is Chapter 7 bankruptcy. A successful Chapter 7 claim allows Texas consumers to keep collectors at bay and possibly discharge debt such as credit card balances.
Source: Deseret News