Do my partner and I need to get a joint credit card?

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One of the most complicated parts of a relationship is sharing finances. Combining your financial resources can be mutually rewarding and increase your collective purchasing power. Putting two incomes on a mortgage or rent and dividing the household bills can improve everyone’s situation. Open a joint current account is often an integral part of this process. But there is another option: take out a common credit card.

But these types of credit cards come with unusual risks, forcing both parties to take on the debt, even if only one person is spending it. As with any financial move or relationship step, it’s best to consider all of the implications before taking out a joint credit card. Here’s what you need to know.

Read more: Best credit card for September 2021

How does a joint credit card work?

Common credit cards accommodate two individual cardholders, both authorized to manage the card and make purchases. Both parties are also responsible for the balance on the card, regardless of who actually made the spending. That way, a joint credit card doesn’t split the liability in half; instead, each account holder is 100% responsible for the debt.

As such, you will both need to apply for a joint credit card and the issuer will perform a credit check on both of you. As with an individual credit card, a good credit score will be crucial for your approval, but both of your credit histories can influence your eligibility. If a candidate has a low credit score, it could ruin your chances of approval, even if your partner’s credit score is excellent.

If approved, all expenses and payments will be recorded on each cardholder’s credit report. That’s a big risk: If your partner uses their card to the fullest or misses a payment, your credit score could suffer. On the other hand, it can make it easier to keep track of your spending and there is only one annual fee to pay (if applicable) instead of two.

And, a warning: if things go wrong, it can be difficult – and sometimes impossible – to remove a joint credit card holder from a shared credit card.

Which banks and issuers offer joint credit cards?

This type of credit card is relatively rare because issuers ultimately prefer to have only one user who takes care of an account. That said, three players now offer joint credit cards:

  • PNC Bank: Some applications have a dedicated section for a co-applicant, who must provide the basic elements: date of birth, social security number, telephone and e-mail address.
  • American Bank: Once you are the cardholder, you can call US Bank at 800-285-8585 and ask customer service to add a co-owner. They will send you a form that you both need to complete and sign. If approved, your partner will receive a card in their name.
  • Credit unions: Many credit unions offer joint credit cards, including Veridian, AllSouth Credit Union, and Credit Union of Denver. Contact your local branch to find out more.

Alternatives to consider

There are less risky alternatives that serve a similar purpose without locking up both parties – for better or for worse. If you are looking to combine your finances, the following options may be more appealing.

Open a common current account

A joint bank account is easier to open and close than a joint credit card. It is a convenient way to share income and expenses. Most common checking accounts will provide debit cards linked to the account. Although it is still possible that a person empties the account, they would not be able to go into debt.

Make your partner an “authorized user”

Adding an authorized user to a credit card is another easy way to tackle this problem – and it gives you more flexibility to bail out if the going gets tough. Call your card provider to add an additional username; you will need to provide their date of birth and social security number.

But you’ll retain more control as the primary account holder, which means you can add and remove users without penalty and without someone else’s permission. That being said, you will be solely responsible for all charges billed by an Authorized User. Some companies may charge you a small fee for an additional card.

Adding an authorized user may also be a better option when a partner has a low credit score, which would not impact an approval decision. But it could help the authorized user to improve their credit, since the account will appear on their credit report.

Joint Credit Card FAQs

What is the difference between a joint credit card and a co-signed credit card?

A shared credit card gives both applicants equal access to the card’s credit limit and account management. The credit of both individuals will also be impacted. Applicants typically apply for a joint credit card because they both intend to use it.

A co-signed credit card has an active primary owner and a passive secondary co-signer. The principal applicant is the only one to be issued a card. The co-signer only provides a better credit score to help the applicant get approved. If the primary owner defaults, the co-signer is responsible for the unpaid bills and could see a bigger impact on their credit.

Will adding someone to your credit card account increase their credit score?

Adding an authorized user is a great way to improve a person’s credit score because they will have more credit. However, any negative activity by either cardholder, such as maximum card usage or late payments, could affect both the primary user’s credit and the primary user’s credit. authorized user.

How do I remove someone from my credit card account?

If the other person is an authorized user and you are the primary cardholder, all you need to do is call the credit card company and ask them to remove the user from your card account. If the other person attempts to use the card after being removed from the account, the card will be refused.

If you are a joint credit card holder, it is more difficult to remove someone from your credit card. Both account holders must agree to close the account. Before you can close the card, the issuer will ask you to pay the balance. Keep in mind that closing a joint card could affect your credit score as you reduce the amount of available credit you have.

How Do Joint Credit Cards Affect Your Credit Score?

There are no joint credit scores, even if you have joint accounts together. Activity will be reported on each individual credit report, even if you are not the one making the payments or spending the most. Once you have a shared credit card, a person’s financial habits can affect you both positively or negatively.

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