Adding your spouse to your credit card or opening a joint credit card account together is a big decision to make. Your spouse's financial habits can have a direct impact, for better or for worse, on your credit score. This article will explore the options for sharing a credit card account with your spouse, as well as the advantages and disadvantages of 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 your spouse
There are two options for sharing an account. You can either add your spouse as an authorized user to an account you already have or you become joint cardmembers of a new account.
If you add your spouse as an authorized user, you're giving them permission to make purchases on your account. They'll have their own credit card, but their account activity will be posted on your statement since you're the primary cardmember. Keep in mind that you'll be responsible for their spending.
If your spouse has a lower score than you, their score might get a boost from becoming an authorized user with you. This only happens if the issuer reports activities for authorized users — many issuers don't report it 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 account by calling your card issuer or going through the issuer's online portal.
You could also open a joint credit card account with your spouse. With a joint account, you both share the same responsibilities in managing the account and are equally responsible for paying it back. While the two of you might enjoy managing expenses and building good credit habits as a team, you could also potentially damage your score if your partner overspends or misses payments. In addition, if the two of you break up or decide that sharing an account is no longer working, your credit score could also suffer from having to close the account.
While many banks don't offer joint accounts, there are still some that have the option. Check with your credit card issuer to see if they offer joint 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 both of your credit reports to get hard pulls. A hard pull, also referred to as a hard inquiry, occurs when you apply for a new line of credit. Both reports will be pulled by a creditor and evaluated to determine how much of a risk you are as a borrower.
Keep in mind that joint credit card accounts are much less common than authorized 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 open one with a partner, neighbor, friend, etc.
Pros and cons of sharing a credit card account with your spouse
There are advantages and disadvantages to sharing an account with your 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 on the same account.
- You'll have fewer bills to worry about paying each month. One joint bill can be easier to manage than two separate bills.
- Your spouse's credit history could potentially get a boost.
Cons of sharing a credit card account
Disadvantages of sharing an account with your spouse include:
- You could damage both your credit score and your relationship if your spouse spends irresponsibly. Whether you have them as an authorized user or you're sharing a joint account, their financial habits have the potential to affect your credit history.
- Depending on how much your spouse spends and how high your credit limit is, you could hurt your score by increasing your credit utilization ratio. Your credit utilization ratio is the money you owe on your 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 share in building a financial future together, you may want to consider adding them as an authorized user to your card or opening a joint account together. If you think there's any possibility that complications could arise in credit habits, it may be a better idea to keep separate accounts.