Is it wise to share a joint credit card with your spouse?

When people get married, they often want to share their life, their house and their account with each other. However, having a joint credit card may cause problems down the road. Do you know that it can seriously ruin your relationships and your credit report?

There are two types of credit accounts: individual and joint. Individual account means that you alone are liable for the credit card payments. The account will be shown only on your credit report or on the credit report of an "authorized" user. 

Joint account means that you and your spouse are both liable for paying off the balance, regardless of who actually made the purchases. A credit company will report the payments in both names. It means that the credit score of each person can be improved or ruined by the way the joint account is handled.

A joint account is different from being an “authorized” user on someone’s account. When somebody is an authorized user, he or she has no responsibility for making timely regular payments. That’s why an authorized user’s credit score is not be affected by the account holder’s payment history. 

Most spouses, even if they start out with individual credit accounts, eventually combine their money. “You and Me” becomes “We” and “your money and my money” becomes “our money”. On the one hand, it is a wise decision. It enables a spouse with low or no credit score to qualify for a better offer than they can do alone. If the joint account is managed wisely, the person with the better credit rating can help the other spouse improve his or her credit.

On the other hand, a joint account can ruin your relationship if you can’t agree on financial issues. "Money" is often cited as one of the most common reasons for divorces. In a study of nearly 1000 couples by the Creighton University Center for Marriage and Family, almost every couple said money was the main thing they argued about.

You can avoid money-related problems by making a well-considered decision from the beginning. If one of you prefers planning all purchases in advance and the other is a shopaholic, than it makes sense to have separate credit cards. This way you can eliminate a major source of conflict. 

When we get married, we all hope to live happily together ever after. However, our life hardly ever reminds of a fairy tale. If you end a relationship with someone you have joint accounts with, what to do then? 

If all financial issues are settled before separating, then the end of your love story will be less painful. But if there are any remaining debts, your life can become increasingly difficult. A joint account will be your joint responsibility even after your divorce. The debt acquired by one of cardholders is also the responsibility of the other cardholder. 

In other words, if your spouse accumulates a $5000 debt on the joint credit card and you decide to divorce, you can’t just say that you didn’t make any charges, so it is his or her debt. It won’t help you avoid responsibility for making payments. 

In addition, as long as your name is stated on the credit card, you will be liable for any debts that your ex-spouse runs up. If you don’t want to pay for his or her purchases, you need to eliminate a remaining balance and cancel the credit card. It can be done by a single party as long as the account is debt-free.

If you have any debts on your joint credit card, you and your spouse have to make regular timely payments. Late or missed payments made by your spouse will also appear on your credit report. In case of any delinquencies, the credit card issuer can go after either cardholder for payment. 

So should you share a credit card account with your spouse? Experts recommend keeping separate credit cards. Marriage is a journey. Before taking any trip, you need to make preparations. Discuss the advantages and disadvantages of having a joint credit card with you future spouse and ensure that you both understand the effect of bad money decisions.