Joint Credit Card: What To Know Before You Get One

Joint Credit Card: What To Know Before You Get One
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Although increasingly rare, joint credit cards can be a useful convenience for family members or spouses who share finances, but present significant responsibility. Whenever you make a financial agreement with another person, there has to be substantial groundwork for trust and open communication. Both parties should be as informed as possible on what they’re signing up for.

How Do Joint Credit Cards Work?

Where a credit card account usually has only the name of one primary account holder, on a joint account there are two primary account holders. These two account holders can each have their own copy of the credit card and are granted equal access and rights to use the card.

Once you have both been approved as eligible for the card and your account is set up, both users can spend as they please using their own card copy. This also means the monthly payments due at the end of each statement period are the responsibility of both account holders—even if one person didn’t use the card at all. How you choose to divide payments fairly is entirely up to the agreement you make with your account partner.

One beneficial aspect of a joint credit card is that you and your account partner can help each other maintain high individual credit scores as long as you pay off the card’s balance promptly each month. Be sure both account holders agree on monthly spending amounts as your credit utilization ratio will affect your credit score. If one account holder uses up most of the available monthly credit, it could lower both users’ credit scores. If you both use the card wisely, you each can build good credit faster and put you both in a position to qualify for lower interest rates and better chances of qualifying for loans and higher credit limits in the future.

What To Consider Before Getting a Joint Credit Card

Aside from the fact joint credit accounts are no longer available with most financial institutions, you may also want to consider the responsibility in associating your own credit history with another individual. Since you share 100% financial responsibility with someone on a joint credit card, the most important thing to know before signing is whether you trust each other to use the account responsibly.

Make sure you feel comfortable that you communicate clearly about spending habits, budgeting needs and other financial obligations with the other person. You will essentially want to treat this joint holder as another “you” on the account—after all, the implications this account has on your credit are the same for the other person’s credit.

Sharing a joint credit card with someone should be an agreement that helps both of you financially—especially since credit history and individual credit scores play such a large role when opening new accounts.

In some cases, one partner’s high credit score might actually help a partner with a lower credit score qualify for a credit account that wouldn’t be possible otherwise. If one partner’s credit score is too low, however, it could disqualify both users for eligibility. Once a joint account is opened, keep in mind neither account holder can be removed from the account. If something changes in your and your account partner’s agreement, you will either have to come up with a reasonable payment plan to ensure all debt is paid off in full before closing the account or one or both of you may have to transfer the balance over to individual accounts to absorb the debt.

There are other options more commonly available for partners who wish to combine finances, including adding each other as authorized users on existing accounts, or opening an individual account with a co-signer.

Joint Credit Cards vs. Authorized Users

An authorized user is someone you add to an existing account. This means you grant them access and use of the account for spending and paying down balances, but that they are not directly financially responsible for the credit balance. An authorized user’s credit history will not be relied upon to determine eligibility in the same way the primary cardholder’s would be, which makes the process of adding a name to the account in this way much easier. Most cards report payment history to authorized users’ credit reports, so authorized users can benefit by building credit through this attachment to a card not their own.

More than one authorized user can often be added on an account and with some banks you even have the ability to designate hierarchical access and individual charging privileges. Most spending still earns rewards on rewards cards, so the primary account holder may benefit from rewards earned by authorized users. For example, Capital One offers the choice of an Account Manager, who is an authorized user with near-equal access as you as the account holder.

Joint Credit Cards vs. Co-signers

Another alternative to opening a joint account is to open an account with a co-signer. This could be helpful in the case of an applicant who may not have high enough credit to qualify for certain card privileges or who may be trying to rebuild credit. A co-signer with good credit can increase an applicant’s chances of receiving better terms of use, better rates and higher spending limits on a credit card.

As a co-signer, you vouch for the card applicant and therefore declare financial responsibility should he or she be unable to pay off the card balance at any point while the account is active. In this case you will also want to be sure the applicant is someone you can trust, as being unprepared to assume this responsibility can easily affect your own credit and credit history. Not all credit card issuers allow co-signers.

How Do I Get a Joint Credit Card?

If you’ve decided you would like to create a joint account for a credit card, the application process can be similar to that for a regular individual account. You will need to provide the financial history of both applicants and the card issuer will then run a credit check on both credit histories.

As long as both your credit scores are high enough to qualify, each party will be granted full access to the account, be able to make updates and changes at any time with 100% spending freedom and equal responsibility to pay off balances. An issuer typically does not differentiate between cardholders when charges are concerned and monthly statements are not usually divided up based on each account holder’s spending. When the card’s payment due date arrives, the total balance left on the account needs to be paid as you would with a primary account. So remember: Even if you each get your own card, the credit balance accumulates as one total amount.

Can I Add Someone As a Joint Account Holder?

Generally, no. A joint account only exists as someone you opened the account with. You can add an authorized user to an existing credit card account already in your name, but in order to have a joint account as equal partners the account must usually be opened by both parties. This also applies for removing account holders from a joint account. From the account activation date until its termination, the named account holders must remain the same.

Best Joint Credit Card Options

Since many banks and credit card companies no longer offer the option for joint credit cards, you may not find many options. Be sure to do your research and always read the fine print before signing anything.

Bank of America

One of the only financial institutions to currently offer joint credit accounts, Bank of America has a fairly straightforward process for those who wish to share full account rights with a partner. After one person is approved for a Bank of America credit card, they can apply for a co-applicant to share financial responsibility.

U.S. Bank

U.S. Bank allows cardholders to add a joint cardholder to all of its consumer cards except secured cards. Once you add a joint cardholder, the co-owner cannot be removed.

Apple Card

Apple Card Family allows two people to co-own Apple Card*, and share and merge their credit lines while building credit together equally.

Bottom Line

Though having a joint credit card can make things simpler for a couple or for family members who share financial responsibilities, it is a commitment demanding plenty of research. A joint account also represents risk and benefit to both account holders.

Since many card issuers no longer offer the option to open joint credit cards, be aware there are other options available for those who wish to share spending rights and payment responsibilities. Never agree to anything without fully understanding the implications to your personal financial situation and risks to your credit.

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