Partners who blend their financial lives often share a credit card account as a way to track expenses and build or maintain their individual creditworthiness. Although applying for a joint credit card or adding your partner as an authorized user to an existing account can simplify how you manage your money, it's not right for every couple.
If you're considering sharing a credit card with your partner, here are a few things to consider.
Joint credit card account vs. authorized user: What's the difference?
If you and your partner apply for a new credit card as joint accountholders, you both agree to share responsibility for making payments on any balances owed and otherwise abide by cardholder agreement terms — even if only one of you uses the card or pays the bills. If one partner makes a late payment, it can impact both partners’ creditworthiness, even if only one partner uses the credit card for purchases. The bottom line: When you have a joint credit card account, you are each legally responsible for the debt accumulated on that credit card. Some credit card issuers, however, do not offer joint credit cards.
Authorized users, on the other hand, are not legally responsible for balances they accumulate. If you add your partner as an authorized user, you are legally responsible for anything your partner spends on your credit card.
Why does credit score matter?
Your credit score helps lenders assess how likely you are to repay a loan. Lenders use credit scores and other information to evaluate risk. Applicants with higher credit scores may earn more favorable borrowing terms. Getting married doesn’t affect an individual's creditworthiness, since spouses maintain individual scores — and not one "married" score — throughout their lives.
The strength of your individual credit scores can set the tone for what you're able to achieve financially. For example, if you're planning to buy a home with a joint mortgage, having better creditworthiness may help you secure a larger loan or qualify for a better interest rate.
Weigh the benefits of sharing a credit card
There are several good reasons to consider a joint credit card account if you and your partner are on the same page financially. First, there's the transparency factor. If you have a joint budget in place, sharing a credit card can be a good way to hold one another accountable for what you're spending and plan to spend.
A joint credit card can also take some of the headaches out of budgeting and paying bills. You can simply charge shared expenses to the card each month rather than divvying them up.
Sharing a credit card can be a good way for both spouses to build and maintain their credit.
The activity on a joint credit card account may be reported on both of your credit reports. If you're both using the card responsibly, that could help to improve your scores over time.
Watch out for the pitfalls of shared credit cards
While sharing a credit card account has some upsides, it's not always ideal. If your spending habits differ, this can cause conflict. If one partner accumulates a lot of debt or misses payments on the card, both account owners' creditworthiness can be affected.
In some cases, your partner's credit score may actually keep you from getting approved for a joint credit card altogether. If that happens, your partner may be better off applying for a secured credit card, which may help them rebuild credit.
You can add your partner to one of your credit card accounts as an authorized user if their creditworthiness may be hindering you from getting a joint card. Just bear in mind that as the primary cardholder, you're responsible for all charges — not only the ones you make.
The bottom line
Whether opening a joint credit card makes sense ultimately comes down to how each of you approaches your finances, your individual creditworthiness and what you hope to accomplish with your money individually and as a couple.
If you think a joint credit card is the right move, take the time to review the annual percentage rates and fees carefully for any card you're considering. If there's a rewards program, make sure it's a good match for both your spending styles. Finally, consider how you will both use the card and set some ground rules. The more thought you put into your final selection, the better your experience with sharing a credit card is likely to be.
Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
