The Good & Bad of Joint Credit Cards

There are many options when it comes to borrowing money. One of those ways is utilizing a joint credit card account.

A joint credit card is a card in which two people have equal control and responsibility over spending and paying off debt. In this kind of arrangement both people apply for the card and each of their financial histories are considered.

A joint card is not like an ‘Authorized User’. An authorized user is when a card fully owned by someone allows someone else to make purchases with that card. The purchaser would have no obligation to the debt and their finances would not be looked at in the application process.

The Good

A joint card can be a good idea for married couples or people who are in close relationships. One big perk is that it can help someone with bad or little credit so long as the other applicant has good credit.

This works great in a scenario of a parent and their young adult child who doesn’t have established credit. The joint card can increase their score as it is used and managed responsibly. Since both parties are responsible for the debt it is easier to manage and make sure payments are made on time. This can be a good tool to teach responsible credit card use.

For married couples or partners it is a good idea when finances are already merged. It will also keep both partners abreast of any spending or debts so better financial decisions can be made in the household.

The Bad

A joint card is not for everyone.

If you open a card with someone you can’t trust you will find yourself on the hook for purchases you didn’t make. Since the account is shared equally you are responsible to pay off debts if they don’t. This can cause relationship problems, damage credit and bury you in debt. Additionally, if you no longer want a joint account you cannot transfer it to one party, the account has to be closed entirely.

Applying for a joint card depends much more on the relationship than anything financial. Make sure your friend, partner, family member or child is responsible and understands that the arrangement will require communication and responsible management.

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