Is a joint credit card account right for you?

Couple discussing if a joint credit card account right for themImage: Couple discussing if a joint credit card account right for them

In a Nutshell

Some credit card issuers may give you the option of opening a joint credit card account. This can help simplify finances for married couples and other partners, but sharing a card isn't for everyone.
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Let’s face it: With so many options on the market, finding the right credit card for yourself can be a tricky enough proposition.

Do you go with a card that offers points, cash back or some other type of benefit? The answer isn’t always easy, and it only gets more complicated when you add another account holder to the mix.

That’s right. Some credit card issuers may give you the option of opening a joint credit card account. This isn’t always the case, as most issuers prefer to issue cards to primary account holders, who can then add a certain number of authorized users to the account if they wish — more on that in a second.

So, why open a joint credit card account in the first place? Some partners or spouses find that it simplifies their financial lives. After all, partners oftentimes share other financial accounts, such as checking and savings. For a lot of people, a joint credit card account completes the picture.

With that said, a joint account isn’t for everyone. It’s important to determine exactly how it differs from adding an authorized user, and you’ll need to consider which option may be the best for your situation.

Authorized user vs. joint account holder: What’s the difference?

Typically, the person who opens a credit card account is the only one authorized to use it. This person is generally known as the primary cardholder, and they are legally responsible to pay off all debts on the account.

Let’s look at two other types of credit card users and see how they differ.

Authorized user

Being an authorized user means you can use someone else’s credit card in your name. In a literal sense, you are “authorized” to make purchases with the card. Oftentimes, an authorized user may be a spouse or a dependent in high school or college.

Heads up: Authorized users usually don’t have all the privileges of the primary cardholder. You probably won’t be able to make changes to the account, like requesting a credit limit increase or adding more authorized users.

The important thing to remember is that only the primary cardholder is liable for paying the debt. Also, the primary cardholder can remove the authorized user from the account — usually, it’s as simple as calling the credit card issuer using the number on the back of your card.

How many authorized users can I add on a single card account?

It depends. Different issuers and cards may have different restrictions, so it’s important to read the terms and conditions for your card before adding an authorized user. Some cards also charge a fee per authorized user, so watch out for that.

Will sharing a credit card with my teen affect my credit?

Whether you co-sign a credit card with your teen or add them as an authorized user, how your teen uses the card can affect your credit as well.

If your teen is added as an authorized user, they can use your credit card account but ultimately is not responsible for paying the bill.

Joint account holder

Partners who have a joint credit card account are equally responsible for paying off the balance. For this reason, it’s important to trust the person you open a joint account with. Joint accounts are most commonly used by spouses who share their finances and don’t mind having the same credit limit.

Pros and cons of a joint credit card account

One of the biggest benefits of applying for a joint credit card is that it can allow someone with a spotty borrowing history or lower credit scores to get better terms. This is because the credit of both applicants is taken into consideration.

Another advantage is that all of the account holders’ combined purchases appear on a single statement, which can simplify finances for couples. Additionally, both cardholders can take full advantage of all the features of the card, whether they’d like to redeem points for rewards, dispute charges or transfer balances.

Of course, a joint credit card account can also come with unintended negative consequences. If one person goes on a spending spree, both cardholders — including the more frugal person — are still responsible for the debt payment. This can become an especially sticky issue if there’s a life-changing event in the relationship, such as a separation, divorce or death.

In general, it’s best to have a frank conversation about finances before agreeing to open a joint credit card account. Questions you should ask your partner before opening a joint credit card may include …

  • Are you prepared to take on the responsibility of a joint financial commitment?
  • Would adding one of us as an authorized user accomplish the same goals?
  • Have we agreed to follow general guidelines when using the card?

Can a card issuer ask about my spouse or former spouse?

Typically, no. That information’s generally off-limits if you’re applying for your own credit card, not a joint account, based on your own income.

Bottom line

By doing your homework and asking questions, you can find the right card for your situation. It may be an individual card, an authorized user card or a joint card.

One key point to always keep in mind is to pay off the card’s balance in full each month if you can. Interest can add up quickly over time, and that’s no fun even if you have somebody else to split the charges with.

About the author: Rod Kelly has been a writer and editor for more than three decades, the last of which has been in the financial services industry. A native of Minnesota, Rod has made Chicago his home along with his wife and children. Read more.