Managing Joint Credit Cards

by Ace on July 27, 2010

This is the third part of my mini-series about managing finances in a relationship. In my first post I wrote about the decision process that would help you decide if joint finances made sense for you and your partner. In my second post I described how to manage joint and separate bank accounts with your partner.

Credit Cards and relationships. Could be a lot of trouble, right? According to a survey conducted by creditcards.com, 19% of couples have argued about credit card accounts. If you’re thinking about sharing a credit card with your partner, then you have a lot of things to consider before proceeding forward. There is no magic bullet. Consider all the options carefully and talk them through with your significant other, before making a decision.

Different Ways to Do Joint Credit Cards

There are essentially two ways to get the effect of having joint credit cards. The first is for one person to add the other as an authorized user to an account. The second is to create a joint account. Each method has different pros and cons that you need to be aware of.

Authorized User

If you were to add your significant other as an authorized user, they would get the benefit of being able to use a credit card that would charge to your account. However, the authorized user is not responsible for the credit card bill. As the primary account holder you would still be solely responsible for any charges.

Here are some of the things you may want to know about adding an authorized user.

If one of you has bad credit being an authorized user won’t affect the application. This means that if your significant other has a few blunders in their credit history, you can get a credit card based solely on your credit history.
The account will still show on the authorized user’s account history. This can be a great way to help your significant other build credit if they don’t have a good credit history. This could also be bad for the authorized user if the primary account holder is irresponsible and forgets to make payments on-time.
If you add your significant other as an authorized user, you will be responsible for all charges. So if your partner ever goes on a spending binge with your credit card because of a fight, you could be left holding the bag.

Joint Account

The second option is to make your significant other a joint account holder. This means that both of you are responsible for paying the bills. And if one person fails to make the payments the credit card company can and will go after the other person in order to get their money.

Here are some things you may want to know about creating a joint account.

Both of your credit histories will affect the account application. If either you or your significant other has some blunders in their credit history it could be difficult to get a good credit limit and low interest rates.
You will both be responsible for charges. In the event of separation be aware that you could be responsible for charges that your partner makes.

Should You Share Credit Cards?

Really question why you think that it makes sense to share credit cards. Personally, my girlfriend is an authorized user to my account, and I trust her. But that doesn’t mean that you should do so blindly. It’s true that it can be incredibly convenient to have a joint credit card for all the joint expenses, but don’t let it overthrow the other considerations.

(Photo credit: consumerist)