There's no rule that says married couples have to merge their finances. Some couples open joint checking and savings accounts, whereas others separate their money. In the end, you have to do what’s best for your partnership. But even if you prefer your own bank account and your own set of bills, there are benefits to having a joint credit card with your spouse.
Joint Account Holders vs. Authorized Users
There are two ways to approach a shared account. You can apply for a joint credit card in both of your names. In that case, you would both accept responsibility for the balance, and the card’s history would appear on both of your credit reports.
If you have a credit card with a bank that doesn’t offer joint accounts, there’s also the option of adding your spouse to the account as an authorized user. This gives them the ability to use the line of credit, but they won't be legally responsible for the balance.
Joint account holders have more privileges than authorized users. Joint account holders can inquire about account balances, redeem reward points, request a credit line increase, and close the account. Authorized users do not have these privileges.
Reasons to Consider a Joint Credit Card
Marriage can merge your assets, family, and furniture, but it doesn’t combine your credit scores. If your spouse had poor credit before the wedding, getting married won't improve their credit score. However, if you add your spouse to your credit card as a joint account (and maintain active use and on-time payments while keeping the balance at zero or as close to it as possible), that can help them build their credit history.
If your spouse has poor credit, they may not qualify for a credit card on their own, but that doesn't mean they won't get approved for a joint account with you. If you have a good credit score, you may be able to get both of you approved. Then, if the two of you manage this account responsibly by paying the bills on time, both of your credit scores will benefit from the positive activity.
“It gives both parties a reason to pause a moment and give some extra thought before making a purchase,” says Joan Fradella.
There’s also an accountability factor here. A joint credit card can help spouses make more mindful choices with their credit and money. If you and your spouse have your own credit card accounts, you may never see each other’s statements or know how much the other person owes. It's almost too easy to keep your spending under wraps.
These types of money secrets are not good for marriage. Debt can quickly become a big secret in the relationship. Interestingly enough, an estimated six percent of Americans have hidden a credit card or bank account from their spouse or partner. This makes it easier to cover up a spending problem. A joint credit card, on the other hand, puts everything out in the open -- a great approach to merging marriage and debt. “It gives both parties a reason to pause a moment and give some extra thought before making a purchase,” says Joan Fradella, a certified family mediator at Divorce thru Mediation. “You know that another person will see what is being charged. It causes you to think about whether you are being reasonable about your total charges compared to income.” A joint credit card also works when spouses split variable expenses, such as groceries, home maintenance, and entertainment. If you don’t want to deal with a lot of checking account transactions and withdrawals throughout the month, you can put these shared expenses on a credit card, and then write one check from a joint checking account every month. This simplifies your finances and helps you keep track of how much you’re spending as a couple.
There’s even the option of applying for a joint rewards credit card. Since you’re both using the card, there are more opportunities to accumulate points or cash back redeemable for travel, merchandise, gift cards or statement credit.
Is This the Right Choice for Your Marriage?
Despite the perks, joint credit cards increase the amount of responsibility and risk for damage to your credit scores. They also create more chances to build your credit score.
These accounts benefit both parties when payments arrive on time, and when spouses can agree on how to manage their accounts. You both know your habits better than anyone. Anticipate any potential problems and prepare accordingly if you proceed.
Spending Habits Can Vary Spouse to Spouse
A joint credit card can create tension when one person is a spender and the other a saver. It's important to work together to create a budget that fits your lifestyle as a unit. Remember, proper credit card usage can not only help you both increase your credit scores, but in this sense, it can also help you learn how to work on a budget together.
Creating a budget as a unit is not an exercise that can be done overnight. But as you continue the discussion, work with each other's strengths and weaknesses, and find compromises in all you do, then you'll reach success.
The End of Marriage Does Not Mean The End of Debt
What happens if you get divorced? Understand that a divorce decree doesn’t erase the joint debt. The marriage might end, but you’re both still liable for the credit card balance.
If you like the idea of sharing a credit card, but you don’t want a “true” joint credit card, skip the joint application. Add your spouse as an authorized user on your credit card. That way, in the event of a divorce, you can have yourself removed from that card and not be held liable for the debt incurred.
If you opt to be an authorized user, you’ll still get many of the conveniences of a shared card. But as the primary account holder, you have more control over the account.
Marriage is More Than Money
When it comes to marriage and money, open, frank communication can take the stress out of financial planning.
And remember this: money is a means to an end, but it is not the end. Security and stability are essential to any union, but your happiness and your partner’s happiness is what matters most.
Make your financial knowledge work for you both as a unit. The more you work together to reach financial success, the more achievable (and sweeter!) that success will be.