Adding your spouse to your credit card or opening a joint credit cardaccount together is a big decision to make. Your spouse's financialhabits can have a direct impact, for better or for worse, on your creditscore. This article will explore the options for sharing a credit cardaccount with your spouse, as well as the advantages and disadvantagesof doing so:
- Options for sharing a credit card with your spouse
- Pros and cons of sharing an account with your spouse
- Should we consider opening an account together?
Options for sharing a credit card with yourspouse
There are two options for sharing an account. You can either add yourspouse as an authorized user to an account you already have or youbecome joint cardmembers of a new account.
Authorized user
If you add your spouse as an authorized user, you're giving thempermission to make purchases on your account. They'll have their owncredit card, but their account activity will be posted on your statementsince you're the primary cardmember. Keep in mind that you'll beresponsible for their spending.
If your spouse has a lower score than you, their score might get a boostfrom becoming an authorized user with you. This only happens if theissuer reports activities for authorized users — many issuers don't reportit and if it isn't reported, it doesn't affect their score.
How can I add my spouse as an authorized user?
You can typically add your spouse as an authorized user to your accountby calling your card issuer or going through the issuer's online portal.
Joint account
You could also open a joint credit card account with your spouse. With ajoint account, you both share the same responsibilities in managing theaccount and are equally responsible for paying it back. While the two ofyou might enjoy managing expenses and building good credit habits asa team, you could also potentially damage your score if your partneroverspends or misses payments. In addition, if the two of you break upor decide that sharing an account is no longer working, your credit scorecould also suffer from having to close the account.
While many banks don't offer joint accounts, there are still some thathave the option. Check with your credit card issuer to see if they offerjoint credit card accounts.
How can I open a joint account with my spouse?
You'll apply together with your credit card issuer. Be prepared for bothof your credit reports to get hard pulls. A hard pull, also referred to as ahard inquiry, occurs when you apply for a new line of credit. Both reportswill be pulled by a creditor and evaluated to determine how much of arisk you are as a borrower.
Keep in mind that joint credit card accounts are much less common thanauthorized user accounts, so your choices may be limited.
Do we need to be married to open a joint account?
No, you don't need to be married to open a joint account. You can openone with a partner, neighbor, friend, etc.
Pros and cons of sharing a credit card accountwith your spouse
There are advantages and disadvantages to sharing an account withyour spouse.
Pros of sharing a credit card account
Advantages of sharing an account with your spouse include:
- Potential to earn rewards faster since both of you will be spending onthe same account.
- You'll have fewer bills to worry about paying each month. One jointbill can be easier to manage than two separate bills.
- Your spouse's credit history could potentially get a boost.
Cons ofsharing a credit card account
Disadvantages of sharing an account with your spouse include:
- You could damage both your credit score and your relationship ifyour spouse spends irresponsibly. Whether you have them as anauthorized user or you're sharing a joint account, their financialhabits have the potential to affect your credit history.
- Depending on how much your spouse spends and how high yourcredit limit is, you could hurt your score by increasing your creditutilization ratio. Your credit utilization ratio is the money you owe onyour credit cards, divided by your total credit card limit.
Should we consider having a joint account?
If you trust your spouse's money management skills and want to sharein building a financial future together, you may want to consider addingthem as an authorized user to your card or opening a joint accounttogether. If you think there's any possibility that complications couldarise in credit habits, it may be a better idea to keep separate accounts.
