| Joint Credit Card Accounts |
| By Credit Federal |
Published
02/26/2009
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Credit Card
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Free Tips for Sharing a Joint Credit Card Account
Two people can share a joint credit card account by having the second person listed as an authorized user. An authorized user is not legally responsible for making payments on the credit card, but can make charges to the account. Another way is for two people to share a joint account and both are joint account holders. When two people are joint account holders, both are liable for making credit card payments.
Joint credit card holders may be a spouse, a partner, or even a child. The reason to have a joint account may be to pay bills, merge lives, or to help that person get a better credit score. Managing a joint credit card account may not be easy. It is best to discuss limits about charging on the accounts and how the account is to be used for spending.
Be sure to set a maximum balance to maintain good credit scores.Don’t max out the credit card balance more than 30% of your credit limit. For example a credit card with a $1,000 credit limit should not have more than $300 in charges. In this example using two people, they each could charge $150 bucks.
Agree on a maximum charge limit for each account holder so there are no surprises of large purchases. If one person must make a charge over a specified amount, it must be discussed before making the charge. In the example above, setting a $300 charge limit, the person who wants to make a $200 charge should discuss it first with the other card holder. This also eliminates surprises when the statement arrives. Knowing the spending habits of each partner ahead of time can help prevent problems later.
It can be a good idea to check the account balance to make sure the balance has not unknowingly surpassed the amount that both card holders agreed upon. Another idea is to discuss how the bill will be paid each month and how the funds to pay the bill will be handled.
It is important to understand when there are partners sharing one account, credit scores will affect both partners depending on credit habits. Therefore, much thought should be given before a partnership is entered into for sharing a credit card account. Be prepared to take responsibility for a partner’s spending habits and the responsibility to pay the charges.
Many times relationships do not last forever. When sharing a joint account, both are responsible for paying the credit card bill even if one partner leaves. Even in a divorce, the credit card issuer doesn’t care about the personal details only the payment for the charges. Both account holders are still held liable for making payments. Be aware that an angry spouse or angry ex can make charges on the credit card and may not care to repay it. Joint accounts cannot be closed until the balance is paid so a partner could keep charging on the account.
Managing a joint account can work if details are outlined in the beginning and the account is monitored and paid timely. Both partners in a joint account must monitor the account as credit will be affected for both partners and both are responsible for repayment. Realizing a primary account holder is responsible in an account and responsible for payments that authorized users make is also very important. Having partners on accounts who could constantly charge without taking part in the repayment of charges could be a huge problem for the primary card holder. In the end, having partners on an account or having authorized users may not be worth the risk.
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