Loan Advice

The Pros and Cons of Having a Joint Credit Card

by Jim Hughes   Dec 15, 2020

Money issues can add stress to a relationship. That's why many couples decide to share and combine their funds and apply for a joint credit account. With a joint credit card, both parties have equal responsibilities towards their finances, which means that both joint account holders are equally responsible for making payments on time because all payments and activities are reported to both parties' credit scores.

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Advantages of a Joint Credit Card

Having a joint credit card account has many benefits. First, a joint account allows both users to maintain a credit score. By making payments on time, a good credit score can become even higher.

Second, a joint credit may help improve a poor credit score. If one of the joint credit card users has a lower credit score, with the help of the higher credit score holder, they can take out a small loan and pay it back on time. This way, the person with a low credit score will benefit from the joint account and maybe improve their score.

Man and woman looking into opening a joint bank account.

Third, by having a joint credit account and combining their resources, couples may increase the chances of being qualified for a larger loan such as a mortgage because of the dual-income.

Having a joint credit card is considered much better than other similar credit cards (such as an authorized user) because both parties are equally responsible for the account.

Lastly, a joint credit card helps manage finances in marriage much better because it simplifies the couple's finances and minimizes the bills.

 

Disadvantages of a Joint Credit Card

Some credit experts believe that when couples get married, they should avoid signing up for a joint credit card and maintain credit independence. The reason being that many couples end up separated from one another. Lenders don't recognize any division of the debts' liability, and separating those accounts is sometimes impossible.

The lender will hold both parties liable for a late or non-payment, and both parties risk damaging their credit scores in this case. For example, if the husband is responsible for paying the credit card bill and fails to pay it on time, this will show on the wife's credit score and affect her credit report negatively because she is a co-signer on the contract.

Even if a couple is not separated, an irresponsible action from one of the spouses with the credit card usage can hurt the overall credit score of them both.

Just like a person with bad credit may improve their score with their spouse's help, the opposite scenario is also possible. If one of the spouses has a bad credit score, that can lead to the other spouse getting worse deals than if they had applied on their own.

Also, if both people have different spending habits, using a joint credit card may cause some trouble in the relationship.

What Do You Need for Your Joint Credit Card Application?

To apply for a joint credit card, both applicants must be at least 18 years of age. After completing an application form with their personal details, most banks require from both applicants the following documents:

●      Government-issued ID

●      Proof of residence

●      Social Security number

●      Proof of income

Banks and credit unions may ask for additional information. Some may also ask what the couple is planning on using the joint account for.

At the end of the procedure, both applicants sign the application and allow the creditor to conduct a credit check.

Best Credit Card for Married Couples

When opening a joint credit card account, couples have the option to choose between brick-and-mortar banks and online banks. The best in-person joint credit card issuers for married couples in the United States are: Bank of America, PNC Bank, and U.S Bank.

A couple discussing finances.

Bank of America

The Cash Rewards credit card by the Bank of America offers many benefits to married couples. The Bank of America allows its users to add a co-applicant to their account by calling customer service and creating a joint credit account.

The joint credit account of Bank of America offers an introductory offer of $200 in online cash rewards after making a purchase worth $1,000 during the first 90 days of account opening. Cardholders can earn 3% cashback on a category of their option, such as travel or dining. They can also earn an additional 2% when shopping at grocery stores or wholesale clubs for up to $2,500. Also, the Bank of America's Cash Rewards credit card offers an unlimited 1% cashback on all other purchases. There are no annual fees.

PNC Bank

Another good option to apply for a joint credit card is the PNC Cash Rewards Visa Credit Card. The joint credit card offers its users a $100 bonus cash back after making a purchase of $1,000 during the first three billing cycles after account opening. Couples using the NC Cash Rewards Visa Credit Card can earn 4% cash back on gas station purchases, 3% cashback on dining, and 2% cashback at grocery stores. When combining these three categories' annual purchases, cardholders will receive up to $8,000 in cashback. Like Bank of America, PNC offers 1% cashback on all other purchases, and there are no annual fees.

U.S Bank

Another brick-and-mortar bank that offers joint credit cards is the U.S Bank. With the U.S Bank Cash+ Visa Signature Card, a user can add a joint cardholder by filling out the Joint Owner Form.

With U.S bank, couples can earn 5% cashback per quarter on two categories of their choice on up to $2,000 in purchases, 2% cashback for one category of their choice, and 1% cashback for all other qualifying purchases. Also, during the first 90 days of account opening, they can qualify for a $150 bonus cash back with $500 in eligible purchases. There are no annual fees.

Married couples also can apply for a joint credit card through online banks such as Simple Bank, Discover Bank, and Ally Bank.

Simple Bank

Simple Bank is a good option for couples who want to save money. With their Savings Goal account, couples can get an annual percentage yield (APY) of 0.6% on their balance. Simple Bank also allows its users to track their expenses by using their mobile application. To open a Savings Goal account, one person should already have a Simple Account open.

Discover Bank

Discover Bank is another online banking option that married couples may like. By using their Online Savings Account, users can get 0.5% APY. Using Discover Bank's Online Savings Account is a good idea for couples who want to start building their credits together.

Ally Bank

On average, Ally Bank gives an average of 0.6 yields over one year. There are no monthly fees to have an account open. They also offer other financial services, such as personal loans.

Some Tips to Help You in Your Financial Journey with Your Spouse

A man calculating expenses.

The most important factor in having a successful joint credit card is communication. Because joint accounts show up on both spouses' credit reports, couples should communicate about managing the account and paying their debts on time.

Also, when maintaining honest communication about money, couples will understand the other person's point of view regarding finance and save them from any financial troubles.

When it comes to paying the bills, couples should figure out each individual's payment responsibilities.

Agreeing on a monthly budget and setting a spending limit plays a significant role in having an excellent joint credit card. This way, the couple will have an overall idea of how much they are spending and how much they are saving.

Checking the account before using the joint credit card is a good idea to ensure that the expenses won't go over the agreed limit.

Couples can also use budgeting platforms like Mint and YNAB will help them track their spending and have an overall idea of where their money is going.

 

Jim Hughes, author at OpenLoans
Director of Content
Look to Jim for advice on budgeting, savings, insurance, stocks, retirement funds, and other topics in personal finance.
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