50 Years Ago, Women Didn’t Have Credit Card Rights

It’s been only 50 years since women could legally get a credit card or loan on their own. Before that, they had to have their husbands (or another male figure, like their fathers or brothers) co-sign for them — effectively having authority over their finances. This was a holdover from British law and was known as coverture, where (married) women were not known as legal entities beyond their husbands. The Equal Credit Opportunity Act, passed in October of 1974, was a huge milestone in the course of financial freedom for women, and later, for all. 

The Equal Credit Opportunity Act not only allowed women authority over their own lives, but it also legally allowed them the unquestionable ability to open bank accounts solely in their own name. While not illegal for a woman to open up a bank account starting in the 1960s (after the passing of the Equal Pay Act, where men and women were to be paid equally), many banks still did not allow women to do so on their own without a male figure having access to their accounts as co-signer. ECOA let women open accounts for credit products, such as credit cards, and finally gave them true financial autonomy and protection in the eyes of the law. 

Though the law was passed in 1974, it was not legally enforceable until October 1975. In 1976, the law was amended and expanded protections to all beyond just sex and gender and marital status, making it illegal to discriminate on the basis of race, color, religion, national origin (including birth place, ancestry, culture, or language), age, or receipt of social or public assistance programs, like the Supplemental Nutrition Assistance Program (SNAP) or Social Security Disability Insurance (SSDI). 

While we’ve come a long way in a short time since the passing of the ECOA, there’s still so far left to go. While women now have access to credit cards, their credit limits are often lower than men, and their interest is higher, according to research by the Federal Reserve Bank of Philadelphia. This “unexplained gender difference in bankcard limits” equals about $1,323. That was after controlling for credit score, income, and demographic characteristics. Interest rates are often at least a half percentage higher than men’s, regardless of financial literacy level, income, and education. Women are also less likely to receive a lower APR when asking for one, compared to men (72% approval versus 80% approval). Women of color face even more barriers when it comes to credit, in particular, because they weren’t given access to credit until the amendment and still were denied other forms of credit (like mortgages) due to redlining and other discriminatory practices. Due to this and things like the wage gap, credit limits are also lower for many people of color — leading to higher utilization and lower credit scores.

That being said, the passing of the Equal Credit Opportunity Act was a huge stepping stone in the path of financial freedom, and has afforded many the right to true autonomy and choice. Having access to credit (and your own bank account!) is a game-changer for those seeking financial stability and access to start and leave things that are no longer serving them. Here’s to 50 years of financial ability for all, and hopefully, more strides to come.

Learn about how SoFi is celebrating this historic milestone with the Give Her Credit Program here.

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