Update: Hans sent along a note saying the FAA issue has been settled by Congress and 74,000 workers are headed back to work.
Thanks Han for the update.
I received an email from Donna that clearly shows the confusion over the new regulations regarding income on credit cards. Basically, the proposed changes indicate only personal income, not family income, must be considered when approving a credit card application. If this bears out, it will have a significant impact on stay-at-home moms’ and dads’ ability to apply for credit cards. Obviously, I’m not in favor of the change. But as we do with all frequent flier travel hacker deals, we will need to find a way around the regulations.
Donna wrote me in dismay about a credit card denial she had received. She had never been denied before. Here is her email to me:
“We are required by federal regulations to evaluate your capacity to take on new debt. Your annual income information is either missing on your application or is insufficient relative to your overall debt based on our records or your credit report.”
In her phone call to the card issuer (Amex Surpass card), she says:
“They asked what portion of the household income I was personally responsible for. I told them none. I hadn’t heard anything, so I called to check the status. I got a really nice rep who said he’s been using the husband’s income since the husband supports the wife. He said honestly they don’t know what to do with the new requirement. Too bad I didn’t get him the first time.”
Here is an email I got this morning from Steve who works in the industry:
There is some flexibility built into the new regulations. It is unknown how card issuers will implement the new regulation but here is what the Federal Reserve said in describing their new requirements:
“Thus, if a card issuer prompts an applicant to provide his or her “household income” on a credit card application, the card issuer cannot rely solely on the information provided by an applicant to satisfy the requirements of § 226.51. Instead, the card issuer would need to obtain additional information about an applicant’s independent income (such as by contacting the applicant). However, if a card issuer requests that applicants provide their income without reference to household income (such as by requesting “income” or “salary”), the issuer may rely on the information provided by applicants to satisfy the requirements of § 226.51.”
The new regulations go into place October 1, 2011 but there could be card issuers who are already following them.
The language quoted above allows card issuers who ask for only “income” or “salary” on the application (rather than “household income”) to rely on the applicant’s statements.
Again, I don’t know how this will play out with the big card issuers as they might ask follow-up information about income – but the Fed did give them an out to rely on the applicant’s statement if the card issuer only asked for “income” or “salary” on the application.
Although this is not conclusive evidence that the regulations are taking over, it sure looks like it to me. Therefore…
Advice for Stay-at-Home Moms and Dads:
You may want to consider entering the game sooner rather than later at this point if your scores will support credit card applications. I’m sure that, in time, many “stay at homes” will become “employees” of the working spouse or partner and a paper trail will need to be established. It will only make sense, in my opinion, for real card fanatics, but that may be the answer. (I’m thinking Katybug will be working for the blog in the future…)
Now, not only will we be keeping track of how often we can reapply with individual card issuers, but for some time to come it sounds as if we will be applying based on how each issuer interprets the new regulations.
Times, they may be a-changin’