What To Know Before Sharing A Credit Card

June 5, 2019  |  
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So you and your partner are considering opening a joint credit card together. Some would say that this is a big step in the way of commitment. Sure, when you get married you’re opening up your heart and life to someone but when you open a joint credit card together you’re opening up your bank account to that person. Think about it: if someone breaks your heart, you can usually recover, but if someone messes up your finances, fixing that may take more than just time, wine, and therapy. That being said, it can feel really good to have a joint credit card with your partner. It can strengthen a couple to make financial decisions and moves together. You can work on savings goals jointly, and even reap the many rewards a credit card has to offer together. You can probably earn a lot more rewards than an individual user would get, too, since you’re racking up double the usage. All that said, here are some things to discuss before opening a joint credit card.

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Is this a true joint account?

First, decide if you want to open a true joint credit card or if you just want to add a person as an authorized user to an existing account. If this is a true joint account, then both of your credit scores and credit history will contribute to what sort of card and limit you get. If one person has such terrible credit that this isn’t an option, adding that person as an authorized user, and having the person with good credit open the actual account, is a great option.

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If you just add an authorized user…

Just know that if you do add your partner as an authorized user, you should discuss all of the same things you would have if it were a joint account like responsible spending habits and making payments. It is you and just you responsible for paying off your credit card, even if your authorized user has run up a large bill. When it comes to your partner paying you for his part of the bill, that is between you and him—not the credit card company.

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What will you two qualify for?

So you’ve decided to get a proper joint credit card. Now it’s time to talk about what you’ll qualify for. Know that each time you apply for a credit card, it affects your credit score. So do your research and only apply for cards that you know generally accept individuals with your combined credit scores and other important factors. You want to minimize the number of cards to which you apply.

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What sort of rewards do you want?

Now you can talk about the fun stuff, like what sort of rewards do you want? Are you big travelers with plenty of trips planned (or that you hope to plan?) There are certainly some mistakes couples make when traveling but missing out on great travel rewards shouldn’t be one of them. Some cards are tailored for travelers, giving you extra points on things like flights and travel. Meanwhile, maybe you’re trying to save money and you two want a generous cash back card that gives you extra points on regular purchases like groceries and gas.

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How much of your limit will you use?

Decide on how much of your limit you will use together and stick to that. Various financial professionals will suggest different acceptable limits, ranging from very conservative amounts like 10 percent of your limit up to more liberal amounts like 50 percent. Just do your research and decide on a percentage you both feel good about.

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Will you discuss every purchase?

How free will you two be in using this card? Will you call each other to discuss every purchase before making it? Or, do you give one another total freedom to use the card to your discretion? If you have separate bank accounts and stay within your percentage limits, you should be able to do that.

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If not, which ones will you discuss?

If you do want to supervise purchases somewhat, decide which types of purchases warrant a phone call. Would it be anything that costs over a certain amount of money? Anything that cannot be returned?

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Review statements closely

Credit cards with multiple users are more susceptible to fraud than those only used by individuals. Think about it: seeing a purchase on the statement that you didn’t make won’t raise too much concern because you know your partner may have made it. But maybe he didn’t.

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Who is in charge of paying it each month?

Who will be in charge of making sure the card gets paid each month? You could put it on auto-pay, but perhaps you aren’t comfortable with that, since sometimes funds may need to be moved around in order to make payments or you can’t quite pay on the same day each month. So just agree who will tend to this.

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From who’s checking account is payment taken?

Who’s checking account is the actual money coming from? You’ll need to link the card to an account. If you don’t have a joint checking account, then you’ll just have to select one of your accounts.

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What does responsible usage mean to you?

Will you agree to only spend money that you already have in your checking accounts? Essentially treating this card like a debit card? Or, are you okay with spending money you don’t yet have, knowing it will be there by the time the credit card statement comes around? Will you pay the bill in full each month, or will you sometimes pay the minimum only?

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You’ll affect each other’s credit scores

You must understand that you now have the power to affect one another’s credit scores. If your partner spends a high percentage of the limit, only pays the minimum, or misses a payment, both of your scores take a hit. You should also think about that if you consider partaking in irresponsible usage—you’re hurting your partner’s score.

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The one with weaker credit benefits

Naturally, the individual with the weaker credit score benefits here. Your partner’s score, and the type of card it’s able to earn you two, will bring your credit score up slightly.

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The one with stronger credit must consider

If you are the one with the better score, ask yourself if you can afford the slight hit you’ll take by opening a card with your partner. If you have very high credit and have had so for years, it’s probably okay. But if you’re right on the line between acceptable credit and poor credit, you may not want to be dragged down into the bad credit score range.

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Is this relationship on solid ground?

Finally, it’s so important that this relationship is on solid ground. If you’ve been together for less than five years, don’t open a credit card together. Imagine if you were to break up, and in order to get revenge, your partner ran up a huge bill?

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