Financial Tips

Give Her Credit: the Under-Appreciated Journey Women Took to Get Those Plastic Cards

Melanie Lockert

Melanie LockertMarch 20, 2020

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Photo: Getty Images/Carlina Teteris

Swiping your credit card is likely something you do often, daily even, and likely without much thought. The action is often a passive precursor to the main event, whether that’s getting a cup of coffee or a book or a workout outfit. Or, it could land you something bigger that doesn’t necessarily involve a swipe, but still requires a history of having solid credit: buying a house, taking out loans, being granted lower interest rates.

But women and credit cards have a complicated history, given that they weren’t always able to swipe as they pleased. In fact, that was the way of the world not even that long ago: Before 1974, when the Equal Credit Opportunity Act was passed, women by and large weren’t granted credit without having a husband to cosign it. Awareness about this nugget of much-too-contemporary history is key for being able to contextualize the under-appreciated journey women were forced to take in order to build credit, and, by proxy, healthy financial independence.

A brief history of credit cards

The concept of credit—taking something with an expectation of paying for it later—has been around a long time, and credit cards themselves have roots back to the 1920s; those early cards, however, were linked to individual businesses (like a hotel or restaurant) and couldn’t be used universally. The 1950s brought about credit cards as we know them, a single tool that allows for purchasing from any number of companies. BankAmericard launched in 1958 as the first universal payment card. In was only used statewide in California until 1966, when other states began licensing its use as well, and in the mid-’70s, it was renamed as Visa.

But, again, this wasn’t a convenience available to all people: Women and credit cards still weren’t a match made in heaven without a husband to cosign. And in the rare case that a lender did approve a woman for a credit card? They would routinely reduce her wages by up to 50 percent when determining her credit limit, disregarding her actual financial reach—a process to which men were not subscribed, Smithsonian magazine reports.

Not until 16 years after the first mainstream credit card launched—and broad conversations about equality gained momentum alongside the civil rights movement and second-wave feminism—did the relationship between women and credit cards start to shift. And after the Equal Credit Opportunity Act was passed, a whole new world of financial wellness opened its arms to women.

The Equal Credit Opportunity Act changed everything for women and credit cards

The Equal Credit Opportunity Act effectively leveled the playing field for women to access credit. It made discrimination on the basis of gender, race, age, marital status, and religion illegal for creditors, and under its rule, women no longer needed a male cosigner to get themselves personal credit. Furthermore, creditors also couldn’t charge women higher interest rates or even ask about their marital status.

“Credit cards provide a runway to take risks and more freedom to make bold decisions in our lives. Building credit along the way gives us a financial footprint.” —Claire Wasserman, Ladies Get Paid founder

This new normal of being able to claim credit was crucial for paving the way for financial independence, and independence of all kinds, opening up more choices that didn’t previously exist for many. “Credit cards, if used responsibly, can be a very powerful tool for women. They provide a runway to take risks, and they provide us more freedom to make bold decisions in our lives,” says Claire Wasserman, Well+Good Council member and founder of Ladies Get Paid. “Building credit along the way gives us a financial footprint.”

Why the ability to have credit is important for women

Ease of payment, not needing to carry around a ton of cash, and the ability to make online purchases aside, credit cards are really important for one major reason: They help you build credit. Using a credit card and making on-time payments allows a person to establish a credit history and credit score, which is essential to a financially healthy life for everyone, women certainly included.

“You can use your credit score to leverage yourself for loans, credit cards, lower insurance premiums, and even services like cell phone plans or cable bills,” says financial expert Tori Dunlap, founder of Her First 100k.

And while it’s important that women are able to have their own, personal credit score, having a good one is also key for optimal financial health. “Your credit report is akin to a business’ Yelp! profile, with the ratings and reviews. If you pay on time, five stars. If you default on debts or pay late, fewer stars for you,” says certified financial planner Hilary Hendershott. “It’s important for women to build their credit because having a history of payments builds a picture of you as a borrower and is how you make yourself qualified for more credit in the future.”

Credit cards give women more options

Aside from building credit for homes, loans, and competitive rates, credit cards offer other freedoms to women. According to the National Domestic Violence Hotline, a common reason women stay in abusive relationships is financial dependence and lack of resources. In cases like these, credit cards can serve as a short-term solution for extricating yourself from a bad situation.

“When women can get approved for credit cards on our own, we can leave physically or financially abusive relationships and expect to be able to pay our bills,” says Hendershott. In this case, having access to a credit card could be a literal lifesaver.

“When women can get approved for credit cards on our own, we can leave physically or financially abusive relationships and expect to be able to pay our bills.” —certified financial planner Hilary Hendershott

When other life events hit you unexpectedly, credit cards can also help in many cases. “The ability to borrow money quickly for personal expenses, as you do when you make charges on a credit card, is critical for women to live self-determined lives, and to maintain our own personal dignity,” says Hendershott. “The vast majority of women I know have suffered, at one time or another in their lives, a personal crisis that money can help solve.”

So next time you swipe your credit card, consider dedicating a moment of gratitude for living in a time when women have autonomy over their credit. Because, as Dunlap says, “Without credit, women are at a severe disadvantage in creating the life they want—and thus, the patriarchy continues to dominate.”

Other empowering moments worth celebrating for Women’s History Month? First, acknowledge that it’s the centennial year of the 19th Amendment. Then let’s applaud Samantha Jones for being a role model of sexual embodiment.

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