One of the most complicated parts of a relationship is the sharing of finances. Combining your financial resources can be mutually rewarding and increase your collective buying power. But these types of joint credit cards come with some unusual risks, putting both parties on the hook for the debt -- even if only one person does the spending. As with any financial move or relationship milestone, it’s best to consider all of the implications before signing up for a joint credit card. Here’s what you need to know.
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How does a joint credit card work?
Joint credit cards accommodate two individual cardholders, who are both authorized to manage the card and make purchases. Both parties are also responsible for the card balance, regardless of who actually did the spending. In this way, a joint credit card doesn’t split the responsibility in half; instead, each account holder is 100% responsible for the debt.
As such, both of you will have to apply for a joint credit card, and the issuer will run a credit check on both of you. As with an individual credit card, a good credit score will be crucial to your approval -- but both of your credit histories may influence your eligibility. If one applicant has a low credit score, it could doom your chances for approval, even if your partner’s credit score is excellent.
If you’re approved, all of the spending and payments will be reported on each cardholder’s credit file. This is a big risk: If your partner maxes out the card or misses a payment, your credit score could suffer. On the other hand, it can make it easier to track your spending and there’s only one annual fee to pay (if applicable) instead of two.
And, a warning: If things go bad, it can be difficult -- and sometimes impossible -- to remove a co-account holder of a joint credit card.
Which banks and issuers offer joint credit cards?
This type of credit card is relatively uncommon because issuers prefer to have just one user ultimately on the hook for an account. That noted, there are three players offering joint credit cards today:
- PNC Bank: Some applications have a dedicated section for a co-applicant, who will need to provide the basics: date of birth, Social Security number, phone and email address.
- U.S. Bank: Once you’re a cardholder, you can call U.S. Bank at 800-285-8585 and ask customer service to add a joint owner. They’ll send you a form you’ll both need to fill out and sign. If approved, your partner will receive a card in their name.
- Credit unions: Many credit unions offer a joint credit card, including Veridian, All South Credit Union and Credit Union of Denver. Contact your local branch to learn more.
Alternatives to consider
There are less risky alternatives that serve a similar purpose without locking both parties in -- for better or for worse. If you’re looking to combine your finances, the following options may be more appealing.
Open a joint checking account
A joint bank account is easier to open -- and close -- than a joint credit card. It’s a convenient way to share income and expenses. Most joint checking accounts will provide debit cards linked to the account. Though there remains the potential for one person to drain the account, they would not be able to rack up debt.
Make your partner an ‘authorized user’
Adding an authorized user on a credit card is another simple way to approach this issue -- and it gives you more flexibility to bail if things get sticky. Call your card provider to add an additional user’s name; you’ll have to supply their date of birth and Social Security number.
But you’ll retain more control as the primary account holder, meaning you can add and remove users without penalty -- and without another person’s authorization. That noted, you’ll be solely responsible for any charges an authorized user makes. Some companies may charge you a modest fee for an additional card.
Adding an authorized user may also be a better option when one partner has a low credit score, which would not impact an approval decision. But it could help the authorized user improve their credit, since the account will show up on their credit report.
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