A joint credit card account may be a good idea for two people who share expenses. These accounts are also useful for closely tracking purchases and payments.
If you’re considering a joint credit card account, it’s a good idea to first learn the rules governing these accounts and then study alternative arrangements that allow two people to share a card.
Types of Shared Credit Card Accounts
There are three options available for those who want to set up a shared credit card account.
Simply adding an authorized user to the account is the easiest way to set up a shared credit card account. The issuer will ask for the name and personal details such as date of birth and telephone number. There is no restriction on who can become an authorized user nor is there a legal minimum age, but some cards will charge a fee.
An authorized user shares the credit limit with the primary account holder but is not liable for any debts incurred with the card. Points and rewards earned by the authorized user go to the account and can be used by the primary cardholder.
One important advantage of this arrangement is that account history goes on both cardholders’ credit reports. Thus an authorized user with weak credit may be able to boost their credit score through responsible use of the card. This is one way many parents help their children establish a credit history and begin a responsible use of credit.
A co-signer guarantees payment in full of all charges on a credit card account. The co-signer completes the account application on behalf of the individual using the card. Co-signers are often parents or guardians who want to introduce their child to the use of credit.
If the account holder doesn’t make payments on the account, the card issuer will seek payment from the co-signer. The card issuer can sue the co-signer for the debt, if necessary, and the issuer can seize the co-signer’s income and assets to satisfy any court judgment.
This arrangement allows someone with weak credit to open an account that wouldn’t be approved without that guarantee. Co-signers need to be fully aware of the financial danger in this arrangement, however. If the non-responsible party goes overboard on the use of the card, the co-signer may take on a heavy financial burden and have a difficult time keeping the account in good standing.
With a joint account, two people can share a credit account as well as full responsibility for payment. Either party can make charges up to the credit limit, and each can dispute charges, earn rewards and pay with points.
Credit card companies approve joint account applications on the basis of both individuals’ credit histories. Once the account is open, missed payments, over-the-limit charges and any other problems are reported on both individuals’ credit histories. That means responsible use of the card can improve the credit score of both users, while any problems can negatively impact them as well.
Why Open a Joint Account?
Most people start joint accounts for the sake of convenience. A joint account allows a couple to track their expenses and handle credit payments with a “one-stop shop.” A single statement from the credit card company will make financial life easier than multiple statements from different accounts that are being used by two people.
If one member of the couple has poor credit, a joint account can help move that credit score into the “good” or “excellent” range more quickly. This is especially helpful if a couple is planning on applying for a mortgage or a business loan.
A joint account can also help simplify credit card points and rewards. Having a single statement tracking this information with just one set of guidelines can make points easier to handle and understand.
Should I Apply for a Joint Credit Card?
Before starting an application, do some research on the basic terms and conditions of credit card accounts. Review the interest rates, grace periods for purchases and fees charged for overdrafts and over-the-limit charges. Also, consider cash-back rewards and the range of purchases eligible for points.
For a couple, having multiple credit card accounts can get confusing, and it can also be an inefficient and expensive way to handle finances. Consolidating two or more accounts into a single joint account can save time as well as money.
But there are also potential downsides to a joint account. If a couple has differences over spending, payments or rewards, the account can prove to be more of a burden than an advantage. Also, there’s the risk of damaging both credit histories if account holders have missed or delayed payments due to disagreements or misunderstandings.
It’s smart to first discuss the advantages and responsibilities with your significant other or anyone else you’re considering for a joint account, authorized user or co-signer arrangement.
Joint Credit Card FAQ
- Can couples have joint credit cards?
- Married or unmarried couples can apply for a joint credit card account. The card issuer will review their applications for credit score, financial history and income level.
- What banks offer joint credit cards?
- The number of banks offering joint accounts is on the decline, as recovering unpaid debts from two individuals is more difficult than dealing with a single cardholder. U.S. Bank currently offers joint accounts, as do several regional banks and credit unions. It's more common for banks to accept an authorized user, which simplifies collection should the need to recover a debt arise.
- Who gets the credit on a joint credit card?
- Both individuals in a joint account enjoy the full benefits of the card, including the credit limit and points or rewards. Both are responsible for payment, and activity on the card, including any fees or penalties, goes on all account holders' credit histories.
Thomas Streissguth contributed to the reporting for this article.
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