Joint credit cards became an ultimate solution to people living under the same roof and sharing most of their expenses together, whether it’s couples, siblings or parents with their children. Many of them believe having a joint credit card for two can make their life easier when it’s time to pay off bills or other shared costs.
Nevertheless, is having a joint account truly a good idea or just a common misconception? Let’s go through the most substantial pros and cons of having a joint credit card in our everyday reality.
How It All Works
But first, let’s figure out if you really understand the sense of a joint credit card. The fact that both users can utilize the card does not necessarily mean they have a joint account. There exist a term “an authorized user” – a person, who can make purchases from your card account but still remains financially irresponsible for those purchases. This means he is not obligated to pay credit card debts. The impact of a spending activity of an authorized user is also very limited.
Speaking of a joint account, things are equal for both. When choosing a credit card for couples, a provider reviews each of the applicants’ credit history. A liability to use the credit limit spreads on both individuals. Herewith, both users influence their credit scores when using a joint credit card, either in a good or a bad way.
Pros of Joint Credit Cards
- Shared expenses and debts. If you had constant issues deciding how to pay the bills this month, with a joint card you can finally forget about this inconvenience. For people living on equal terms under one roof and sharing all of their utility bills as well as grocery and household expenses, it’s a perfect idea. Besides, one credit card creates a mutual debt that is easier to pay for.
- Improving each other’s credit score. If both partners have bad credit, there is a fat chance both of them will substantially improve their scores. But if it’s only one person, a joint card can contribute to improving a credit score, provided both people make on-time payments and keep the debt low.
- Help one user obtain a lower interest rate. Borrowers set rather high-interest rates for people with bad credit scores, so having a joint account with a person who has a better credit score situation, is beneficial. It guarantees a lower interest rate.
Cons of Joint Credit Cards
- Responsibility for both people. In case of unpaid credit limits from one person, the other person also takes the rap. The borrower doesn’t care who is to blame – he wants the money back and punishes both.
- Relationship breakdown. Seriously, according to 2008 poll by CreditCards.com, almost 20% of surveyed couples confessed they argued a lot about the shared account, while 7% of those twenty stopped using a joint card because it became a reason for serious relationship issues. Another study suggests that some couples maintain separate bank accounts.
- No good for the split and divorced couples. So, having a joint account with your spouse or boy-/girlfriend is indeed convenient but if you eventually break up or divorce, managing a joint card becomes really hard. Just imagine how it’s going to be with people living separate lives and barely contacting each other.
- What if one of the cardholders has bad attempts? Especially this makes sense if the couple broke up. Revenge can go far and leave the other person with a big chunk of debts and bills to pay for.
Whatever decision you are going to make, one is clear: joint credit card is a great responsibility you should only get for in case both partners have a 100% trust in each other. We would not recommend making a mutual account for unmarried couples because a possible break up will make it hard for you to track both your ex and the account.