Interested In a Joint Credit Card? Here’s What You Need To Know
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Summary:
A joint credit card can be a good way to streamline your finances with a partner and accumulate rewards on your spending. But because both cardholders are responsible for making payments, you could be held responsible for the other person’s mistakes. This could hurt your credit scores and damage your relationship. Adding an authorized user to one account or getting separate credit cards might be better options in the long run.
Many couples have combined their finances and share a joint checking account. But joint credit cards are less common, and not many banks offer them anymore. If you are thinking about applying for a joint credit card, you need to consider the advantages and disadvantages of this type of account.
You may also want to consider an alternative arrangement, such as adding one person as an authorized user to the other person’s account. Keep reading to find out what you need to know about joint credit cards.
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What is a joint credit card?
A joint credit card account allows you and another person — typically a spouse, partner, or family member — to own an account together. As co-owners, you are both responsible for paying the bill on time, and you will both suffer the consequences if you don’t.
Joint credit card accounts were more common when income requirements were high enough that someone with a low income, such as a stay-at-home parent, would have to apply for a card with their spouse’s income. In 2013, the Consumer Financial Protection Bureau updated the Credit Card Accountability Responsibility and Disclosure Act (CARD) to make it easier for spouses or partners who do not work outside of the home to qualify for credit cards. After that, many major financial institutions stopped offering joint credit card accounts.
Pro Tip
U.S. Bank and PNC Bank still offer joint credit card accounts, while Chase, Capital One, and Wells Fargo do not.
Pros and cons of a joint credit card account
Before you apply for a joint credit card account, be sure to consider the pros and cons of sharing a credit card.
What to know before getting a joint credit card account
Before you apply for a joint credit card account, you should have a conversation with the other account holder about your expectations. Make sure you are on the same page about how often you will use the card and for what types of purchases, as well as who will pay the bill.
Perhaps you will only use it for large purchases so that you can earn rewards or to pay a certain type of bill. Either way, make sure you communicate with the other person.
Read the fine print
As with any credit card, you should read all of the details about the card, including the interest rate, fees, and requirements. For example, U.S. Bank states that both joint account applicants may have a hard inquiry on their consumer credit bureau reports, and if the potential joint owner is approved, they can’t be removed from the credit card account.
Will a joint credit card build credit?
Yes, a joint credit card can help you build credit, especially if your credit scores are lower than the co-owner’s. If you make your payments on time and pay down the balance as much as possible, your credit scores should reflect that.
The downside is that your credit could also be hurt by a joint credit card. If the other person incurs a large amount of debt or makes a late payment, you will be just as responsible.
How to find a joint credit card account
A lot of banks and other financial institutions are moving away from joint credit card accounts, so it could be difficult to find one. You can call your credit card issuer and ask if it is possible to add an owner to your existing account or open a new joint account. You might have better luck checking with a local bank or credit union.
Alternatives to a joint credit card
You have other options if you decide that a joint credit card is not for you. They include:
Add an authorized user
While many financial institutions have stopped offering joint credit card accounts, they do still offer the option to add an authorized user to your account. An authorized user can make purchases with the card, but isn’t liable for the debt they incur.
Many credit card issuers allow the primary cardholder to set spending limits for authorized users or easily remove an authorized user. This could be a good option for spouses, partners, or a parent who wants to help a child build credit.
Add a cosigner
Instead of adding a joint account holder, you could add a cosigner to the account. A cosigner basically agrees to pay the bill if the primary account holder cannot. They do not have their own card, nor do they receive a monthly statement. It’s less of a shared experience and more of a backup plan for one person.
If you’re interested in this option, check out our comparison of credit cards that allow a cosigner.
Secured credit card
In a situation where one person has poor credit, sharing an account might actually be detrimental to both people in the long run. Instead, the person who wants to repair their credit scores might consider getting a secured credit card.
A secured credit card requires a deposit, and can help the account holder to build back credit by consistently paying the balance on time.
Get your own cards
Even if you have a lower income than your spouse or partner, due to the CARD Act, you should still be able to get your own credit card. While you’ll have to make two payments if you each get your own credit card, you won’t have to worry about being responsible for someone else’s credit card debt on a joint account.
If you’re considering getting your own credit card, take a look at some of the options below.
What happens if things go wrong?
In the event of a breakup, divorce, or other issue, you may need to take steps to protect yourself financially. You will have to check with your card issuer to find out if you can remove one person from the account or if you need to close it altogether.
If you are getting a divorce, you should verify that all of your accounts are consistent with your divorce decree, which stipulates responsibility for debts. You may also need to consult a lawyer or file a dispute with the credit bureaus.
Key Takeaways
- A joint credit card account allows you and another person to own an account together. As co-owners, you share in the benefits but are both responsible for paying the bill on time.
- Most financial institutions don’t offer joint credit cards anymore because an amendment to the CARD Act in 2013 allows people with low incomes to get their own cards.
- The benefits of joint accounts include streamlined billing, combined rewards, and improved credit scores.
- The downsides of joint accounts include the potential for disagreements, complications if you end your relationship, and one person being responsible for the other person’s debt.
- If you want an alternative to a joint account, you can add an authorized user to an existing credit card account, add a cosigner, or get your own cards.
- A joint credit card account can help you build credit. But if you want to build credit on your own, you could get a secured credit card instead.
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Cara Corey is a writer and editor who loves to help people make sense of confusing topics. Her work has been featured in many blogs, newspapers, and magazines, including the Des Moines Register, Boulder Daily Camera, Better Homes and Gardens, and Parents Magazine.
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