The one-owner status of credit cards also means that the card’s owner has full liability for whatever is spent on ‘their’ card. If the additional cardholder isn’t responsible with debt, they sure shouldn’t have one for which someone else is really responsible.
And in some situations, including a messy divorce, someone with a no-liability credit card can be dangerous indeed.
Tthe reason for being single (divorced, separated, widowed or what), is no one else’s business but your own.
But getting back to applications, while I see the relevance of whether you live alone (if not the ‘why’ you do), subsequent questions in approval forms render the information pointless anyway. These are all around income and “your share” of household expenses.
On my application: “Your monthly spend on groceries/restaurants, utilities, clothing, transport, communications, alcohol, tobacco, health insurance and entertainment. If you share expenses, please only include the amount you pay.“
Then this one covers off costs for divorced or separated couples, without the need to disclose that old, obtrusive information to a new institution: “Your monthly spend on these specific expenses – child care, child & spousal support, private school fees, life & accident insurance.“
At the end of every question anyway is the simple: “Enter ‘O’ if not applicable.“
Your capacity to repay a card is important. Nothing else. But here’s the thing: there is now a three-years-to-clear rule that makes it more difficult today to get a credit card.
Whether you ever consume your limit, so run your card up, you need enough ‘fat’ in your finances to repay that entire limit within three years. That rule means many rejections or approvals for far lower limits than sought.
Now, co-habitation is totally relevant to a mortgage application as these can be in joint names. All applicants must qualify.
But, even here, the reason for being single (divorced, separated, widowed or what), is no one else’s business but your own. Am I right? Or am I right?
So what should you have to tell a potential credit provider? All the money stuff.
Because despite the approval and limit rule changes, the income and expenses questions I had to answer did not capture my full financial picture. And I wasn’t asked to prove anything money-related, just marriage.
Further law changes are needed to tighten – and loosen – how you apply for a credit card.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
— to www.smh.com.au
