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Y2K of credit card applications

By Janna Herron ·
Thursday, August 16, 2012
Posted: 4 pm ET

Down in Florida, Madeleine Otto, a 99-year-old woman with good payment history, got rejected for a store credit card because of her age.

But there's a twist. Otto was denied because she was too young, not because she was about to celebrate one century on the planet and mark the milestone with a pair of new shoes.

A local newspaper investigated her rejection and found that the store's computer system only asked for the last two digits of Otto's birth year, which were "12" for the year "1912." The computer, which obviously was updated too well during the Y2K hysteria, read her birth year as "2012" instead and promptly rejected her application.

The reports don't mention what digits the computer reads wrong. For example, the computer probably interprets "64" as "1964" rather than the unrealized "2064." Is it just digits 12 and under? If so, then that retailer is missing out on the most creditworthy consumers. A February study released by Experian found that the Greatest Generation, those 66 years and older, have the highest average VantageScore than any other age group.

Fortunately, this problem doesn't appear widespread. Let's be honest, it's 2012, meaning that credit card issuers had more than a decade to sort out this problem.

I checked out the online applications at the major credit card issuers -- just one application for each -- and found that American Express, Chase, Citi and Capital One all required a four-digit birth year. Wells Fargo required non-bank customers to apply in person, so I couldn't tell. And Bank of America and Discover required only the last two digits of the birth year, but supplied the "19" before them. Those two will need to tweak their forms in 2018, when those born in 2000 will be able to apply for credit on their own.

In general, credit card issuers can discriminate by age only if a consumer is under 21 years old. Under the Credit Card Accountability, Responsibility and Disclosure Act, consumers under 21 must prove they can make payments (aka income) to apply for a credit card by themselves. Otherwise, they need a co-signer.

Otherwise, you can't be discouraged to apply for credit or rejected because of age, under the Equal Credit Opportunity Act. Lenders can't give you a higher interest rate or heftier fees based on your age either. If a creditor discriminates against you due to age, contact your state's attorney general and file a complaint with the Consumer Finance Protection Bureau.

Have you ever been discriminated against because of your age (or any other factor) for a loan or credit card? What did you do?

Follow me on Twitter: @JannaHerron

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