When I asked readers how you split expenses with your partner or spouse, a few responded that they maintained separate checking accounts but shared a joint credit card account for monthly purchases like groceries and utilities.
I recently started doing the same thing with my fiancee. We think, at least for the time being, it’s a good idea. But before you do the same, there are a few things you should consider when you decide to add an additional authorized user to your credit card account or become an additional user on your sweetie’s account.
Joint Credit Card Accounts Don’t Really Exist
As far as I know, you can’t actually open a joint credit card account like you can open a joint checking account. Credit cards accounts—even corporate credit cards—are almost always in one person’s name. However, most credit cards allow you to add authorized users to your account. Additional authorized users:
- Can obtain an additional credit card in their name
- Can make purchases on the account
- If the primary cardholder desires, can access online account information and make payments
- Are not linked by credit profile to the account (the card will not affect the secondary card holder’s credit report)
- Usually, are not legally responsible for paying charges
Although all of these features makes the credit card feel like a joint account, whether two people or two hundred use it, the primary account holder is ultimately responsible for 100% of the charges on the account. Consequently, only the primary account holder’s credit will be affected by responsible (or irresponsible) use of the card.
That’s important to consider if you are thinking about giving a card to anybody…perhaps especially somebody you’re in love with. If your relationship sours, he or she can rack up a balance on the card and stick you with the bill. Unless you’re married, you will be fully responsible for paying up. If you don’t pay, the creditor will ding your credit score—not the authorized user who made the charges.
Beware Second Card Fees
Many credit cards (including most cards that do not charge annual fees) offer a limited amount of additional authorized user cards for free. If your credit card has an annual fee, however, check with the company to see if additional cards will cost extra.
Perks of Joint Credit Card Accounts
If you are married or at a point in your relationship where you think a joint credit card will work for you, it’s an easy way to track joint spending. Ideally, you’ll want to use the card only for purchases that benefit both of you such as:
- Dining out
- Home improvements
Rather than worrying about keeping track of who paid for what, you can simply use the joint credit card for every purchase and split the bill at the end of the month.
Of course, you can also increase the amount of cash back you earn on a cash back rewards card like Blue Cash Everyday Card® from American Express® or the Discover it Card. However, whether you are trying to earn cash back rewards or not, use a joint credit card account with the same caution as you would any other credit card—pay off the balance in full every month or be prepared to deal with the consequences.
What About You?
Have you added authorized users to your credit card or been an authorized user on somebody else’s card? Did it work well, or end in disaster? Do you think it’s a good idea? Let me know!