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A federal rule kicked in Saturday that will prevent many applicants from qualifying for new credit card accounts.
The Federal Reserve's rule told credit card companies that they no longer can consider household income when assessing the creditworthiness of an individual who applies for his or her own card. Under the rule, only an individual's own salary or other income -- rather than combined household income -- can be considered.
One major effect of the new regulation: Stay-at-home moms (or dads) without significant outside income no longer will be able to open their own credit card accounts -- and establish their own credit histories to build their credit scores. Compliance with the rule became mandatory Oct. 1, 2011.
"From an economic standpoint, this is a whopper," said Manisha Thakor, founder of the Women's Financial Literacy Initiative, a financial fellow at Wellesley College and a Houston-based financial analyst. "Not only will be harder to build a credit score, but this ruling is tantamount to assigning a zero dollar value to the work stay-at-home parents do day in and day out to keep households running."
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