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From the Experts at Credit.com

Credit Card Options for Couples

by Lucy Lazarony

Credit Card Options for Couples

Saying “I do” can be a life-changing event. But should you say, “I do” to your honey’s credit cards, too?

When it comes to credit cards, couples can be as close or as separate as they wish.

Do you feel comfortable sharing all your credit cards with your new husband or wife? Or would that be the quickest imaginable road to a squabble?

Would separate credit card accounts be best for you and your new spouse? What about opening a joint credit card account for household expenses?

Let’s take a closer look at the pros and cons of each of these options.

Share and share alike.

Are you eager to share everything with your honey, including your credit cards? You can. You can simply add your spouse as an authorized user to each of your credit card accounts and a separate card will be mailed to him or her. Your spouse can do the same thing for you.

That way each of you will have access to each other’s credit card accounts. Talk about togetherness.
This option may be a good fit for couples who are already in sync on most financial decisions. And you’ll each need to be clear and upfront about your spending choices. Two people adding charges to a single credit card could really pile up the charges.

For couples with opposite money personalities – say someone who spends freely versus someone who is averse to credit card debt — this option could lead to conflict as each spouse tries to convince the other to handle the credit cards in his/her own way.

Keep in mind it’s the spouse who opened the account to begin with who is responsible for the credit card debt. His/her credit rating will benefit when the account is paid on time each month. This same credit rating will be hit hard if balances pile up or the account goes unpaid or becomes delinquent.

No matter how much an authorized user may contribute to the charges on a credit card, that person is not financially liable for the payment of the credit card account.

In the past, an authorized user could get a nice credit boost from the good credit standing of the account owner. The positive, on-time payment history of the account owner used to contribute to an authorized user’s credit score. But that changed in 2007, when Fair Isaac Corp. announced that authorized user accounts would no longer factor into their credit scoring formula.

So as convenient as it may be to be an authorized user on a spouse’s credit card, especially if you’ve had credit problems in the past, it won’t help your credit rating anymore.

And that’s why it’s a good idea to build up a solid payment history on your own by keeping a card or two in your own name.

Keep it separated.

Some couples may prefer a “Yours is yours and mine is mine” strategy when it comes to handling credit cards. Those individual credit card accounts worked just fine when you were both single, and they will work just fine now that you’ve tied the knot.

Each spouse will handle the individual accounts as he/she sees fit. That way, neither spouse will have to answer to the other about credit card spending choices. And more importantly, each spouse will continue to maintain a solid payment history in his/her own name.

Each spouse is responsible for the payment of each individual credit card account. And the payment history and management of the credit card account is reflected in the credit history and credit score of the individual account holder. As far as your credit file goes, you’re still swinging single.

And while a certain amount of credit separateness is certainly a good idea, handling joint household expenses can be a bit tricky.

For example, which spouse should pay for the new living room set? And with what credit card? Should the other spouse help pay for it? And what about the biggest joint purchase of all — buying a home? When you apply for a mortgage as a couple, a potential lender will look at both of your credit records, including the handling of individual credit card accounts.

So as happy as you and your honey may be steering clear of each other’s credit card accounts, your spouse’s credit card choices will affect your joint financial options anytime you apply for a loan together.

Opting for a joint account or two.

Ready for the ultimate credit card togetherness? Open a joint credit card account with your new spouse. When you open a joint account, your credit report and your spouse’s credit report are pulled and reviewed. And you and your spouse are both liable for the payments on the account.

The account will show up on both your credit reports and it will be factored into each of your individual credit scores. Positive payment history and account management will boost both your credit scores, while a bad payment history on the account will hurt both your credit scores. With a joint credit card account, you and your spouse are linked together financially, for better or for worse. Use the account wisely.

You may decide to use a joint credit card account to pay for joint household expenses or for maintenance and repairs on a car that you both drive.

Since the management of the joint credit card will affect both your credit ratings, it’s a good idea to come up with a clear payment strategy.

Will you or your spouse make payments on the card each month? Or will you take turns paying on the account? You may decide to automate payments to a joint bank account. That way you’ll be sure to pay on time every single month.

These are all good options. The most important thing is to find a system that works for your relationship!



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