Joint credit cards can be a good thing. Getting one together with your significant other usually represents a significant milestone in your relationship. But it also means less stress when it comes to expenses. However, a joint credit card includes both benefits and disadvantages. It’s better to know them well, before you get one.
How joint credit cards work
Let’s say you want to let someone else use your credit cards. You have two options. You either add that someone to your card, as an authorized user, or you try to qualify for a joint account. If you choose the latter, your issuer will take a look at your credit histories before making a decision.
With a joint credit card, both users are equally responsible for all charges that appear on the statement. That’s not the case with authorized users, where only the owner of the card is liable for the purchases made with the card.
The benefits of a joint credit card
If you’re married, or in a long-term relationship, getting a joint credit card definitely makes sense. It’s easier to split the bills and it’s also easier to manage your money, since everything appears on one statement. Not only that, but both users can take advantage of the card’s many features and rewards.
One of the most important features of a joint account is the fact that it allows individuals with a lower credit score to get a card with better terms. It’s because the bank looks at the scores of both applicants. If one has better credit, the other can benefit from it.
The disadvantages of joint credit cards
Unfortunately, joint credit cards also come with some disadvantages. The biggest disadvantage is that if one person acts irresponsible with the card, the other will suffer as well.
Another important disadvantage is the fact that the joint credit card is fully dependent of the relationship. If the relationship goes well, then everything is ok. But, if the card holders break up or divorce, things can get messy. When faced with such a situation, you should contact your issuer immediately and try to cancel the joint account.
And, remember, you’re not responsible for any purchases made after you’re legally separated. So try to keep a record of any additional purchases made after that date. It could come in handy.
Getting a joint credit card is a big commitment. They offer a lot of benefits but there are disadvantages as well. That’s why it’s important to take a step back and ask yourself if getting one is a good idea. Try to see if you are ready for such a commitment and how it will affect your goals.