A credit crackdown Oct. 1 may make it harder for stay-at-home parents, college students and others with little to no income to get a credit card.
And this raises big questions for retailers, according to an article in The Sun-Sentinel.
The National Retail Federation in Washington, D.C., is asking authorities to allow issuers to base their decisions on a broader set of factors than just personal income — including credit score, payment history and the customer’s history in the store itself.
“We don’t want to give credit to people who can’t pay,” Duncan said. “But with this rule, we don’t know what personal income people are going to put in (their application). If they put in zero, we’d probably have to turn them down — even if other reports show that they can pay.”
Robert Baer, chief executive of a Pompano Beach-based furniture store, thinks his sales staff and other stores will be more lenient and help good customers get credit.
“It’s tougher for everyone these days to get credit — including companies,” Baer said. “That costs jobs.”
While the rules are designed to decrease credit card defaults and stop unscrupulous lenders, critics say that the restrictions will cut credit to people who can afford it, according to the article.
This is especially complicated for stay-at-home parents in Florida who don’t have a salary. While previously, they would have gotten credit on the strength of their household income, now that won’t happen because Florida doesn’t have a community property law.
Source: Sun Sentinel, September 2011