Pros and Cons of Joint Credit Cards
Sharing a credit card can make it easier to manage shared expenses or to give another person access to a spending method. With a joint credit card, both people can make charges to the credit card and the card's history is included on both people's credit report. Both people are also equally liable for the credit card payments, no matter who made the purchases. When the payments become delinquent, the credit card issuer can go after either cardholder for payment.
If you're thinking about getting a joint credit card with a partner, spouse, or child, knowing the pros and cons will help you decide whether it's a good idea.
Advantages of Joint Credit Cards
Having a joint credit card is beneficial for managing shared expenses, lowering the individual cost of credit, and maximizing rewards.
You share a bill. When you and the other person, your spouse for example, have one rent, one electricity bill, one cell phone bill, it seems only natural to share a credit card bill. Having one less bill to pay can let you make the most of your income. Plus, when it's time to pay off your debt, you'll have an easier time deciding which card to pay back first.
The other person can achieve better credit. Adding a spouse or family member with bad credit to your credit card can help them get better credit. A spouse with bad credit or thin credit may have trouble getting approved for a credit card on their own. However, having a joint credit card will only benefit both people if the credit card is managed right. That is, the bill is paid on time and the balance is kept low.
One person may qualify for better terms where they otherwise wouldn't. Being added as a joint user might be the only way to get your spouse a credit card, or to get a low interest rate. This is especially true if one spouse has a bad credit score.
You can share the cost. For credit card that have an annual fee, sharing a credit card gives you the opportunity to enjoy the perks while splitting the fee. Otherwise, you'd each have to pay separate annual fees, assuming you had the same credit card, increasing the overall cost of credit for your household.
You can earn more rewards. Two people sharing a rewards credit card means double the spending and double the rewards earned. This can be especially beneficial if you're trying to earn a sign up bonus or max out first year bonus rewards.
Some credit card issuers no longer offer joint credit cards. Adding an authorized user is an alternative for sharing a credit card.
Disadvantages of Having a Joint Credit Card
There is a downside to having a joint credit card that can't be ignored.
Both people are legally responsible for making the payments. That means the credit card issuer can take legal action against you for charges you might not have made to the credit card. You could even be sued and have your wages garnished if the credit card payment become delinquent.
By comparison, authorized users aren't legally responsible for purchases made on the credit card, even if they made the purchases.
Credit card disagreements could cause relationship problems. Sharing a credit card could lead to arguments about each other's spending or payment habits. It's helpful to talk through the semantics of sharing a credit card so you're following the same rules? How much you can each spend? How often will you pay the balance? Will you pay in full?
Breakups or divorce make it hard to manage the credit card. No matter what a divorce decree says, the credit card issuer holds you to the original credit card agreement. So if your ex-spouse isn't paying his or her share of the credit card bills, your credit can still be affected. It's even harder to manage the credit card bill if you sever ties with someone you were dating or even a friend or family member.
One person could use the credit card to hurt the other. It sounds childish, but it happens, often after a breakup. One cardholder could go on a revenge spending splurge, leaving the other cardholder with the bill. If the revenge-seeker already has bad credit, she (or he) has nothing to lose from a maxed out credit card or a few more late payments.
Late payments hurt both people's credit scores. Since joint credit cards are reported to both individual's credit reports, sharing a credit card can make it tough to shield one person's credit from financial troubles.
Should You Share a Credit Card?
In some cases, it's wiser to keep separate credit cards. Before you make the decision to get a joint credit card, evaluate your reasons for sharing a credit card. Is it to better manage shared finances in a serious relationship? Or is it to monitor and control the other person's spending?
Discuss the pros and cons of having a joint credit card before applying. Make sure both people understand the effect a breakup could have on any outstanding credit card balance and your credit history.
Consumer Financial Protection Bureau. "Am I Responsible for Charges on a Joint Credit Card Account If I Didn't Make Them?" Accessed July 31, 2020.
The West Virginia State Treasurer's Office. "Divorce and Your Credit." Pages 4-5. Accessed July 31, 2020.