How Does a Joint Credit Card Account Affect My Credit?
February 08, 2022
February 08, 2022
There are many ways people share their financial lives, and it's common to have a mortgage or car loan with a family member, partner or spouse. You can also share a credit card account. Although there is no right or wrong answer to whether a joint credit card account is a good idea, there are pros and cons to consider.
A joint credit card works like a traditional credit card, except the account is shared by two people instead of owned by one. Each account holder has a credit card, but the cards are linked to the same account.
The key difference with a joint credit card account is that the responsibilities and benefits are shared by both cardholders. Any card activity will affect both cardholders, and you are responsible for paying the card balance even if you didn't make any charges.
If you're considering a joint account, have a candid discussion with your co-applicant about the responsibilities that come with having a credit card in both of your names.
If you decide to get a joint credit card account, make sure you're both on the same page about what this entails. It's important that you understand you're both legally responsible for repaying the charges either one of you makes.
When both parties are responsible about money and have an open line of communication on financial matters, that's a big plus. Agree to make payments on time, discuss major purchases in advance, and avoid getting too close to your credit limit.
With credit cards, it's important to oversee the card's usage. If you share an account:
As a safeguard, some creditors will allow you to limit the charges of the person you're sharing an account with.
Although some couples share bank accounts, it's also common for both partners to establish credit on their own to protect themselves and loved ones from unforeseen circumstances, such as divorce, death or other life changes.
Here are ideas to consider if you have joint finances with a partner:
Whether you have your own credit card or a joint account, remember to pay off your card balance in full each month if you can. Interest can add up quickly over time if you only pay the minimum amount due.
To learn more about establishing good credit, visit My Home by Freddie Mac®.