Are Joint Credit Cards a Good Idea?

It’s exciting for a couple to move in together. All of the sudden, their facilities and utilities are being shared, and it is not uncommon for couples to explore sharing their finances. While most joint bank accounts are a straightforward arrangement, a joint credit card account can be much more complicated.

What Are Joint Credit Card Accounts?

A joint credit card account is one that has two primary account holders of equal status. That means that both joint account holders have access to the line of credit, and all other credit card functions such as disputing charges, transferring a balance, reporting a card lost or stolen, requesting a credit limit increase or closing the account. Joint account holders are also able to redeem any rewards available.

In addition, joint credit card account holders have equal responsibility to repay any debts charged to their cards.

Joint Account Holders Vs. Authorized Cardholders

An authorized user is someone who has a credit card from someone else’s account, with the ability to use that card to make purchases, and possibly cash advances. The authorized cardholder has no responsibility to pay the debt, which becomes the sole responsibility of the primary cardholder or joint account holders. In addition, an authorized cardholder cannot make any changes to the account or redeem any rewards.

The Benefits of Joint Credit Cards

When someone is unable to qualify for a credit card on his or her own, that person may be able to be approved for a joint account, along with another person with better credit. And so long as the account is managed responsibly, the credit history of both joint account holders will benefit. (An authorized user can be approved regardless of credit. His or her credit history would also benefit from a responsibly managed card, but the impact would be smaller.)

So a joint account with someone with a high credit score could help a partner with a weaker credit score improve his or her score. (You can find out what your scores are for free from Credit.com.)

A joint account can be a good idea for couples who want to share completely in the management of a single account. For example, when one person is just an authorized user, instead of a joint account holder, he or she will be unable to make any account inquiries or directly access many of the card’s benefits.

Drawbacks of Joint Accounts

A joint credit card account obligates both cardholders to pay back the debt, and any delinquency or default will be reflected on both account holders’ credit histories. As you may imagine, this can become a big problem in the event the couple separates, divorces or otherwise splits up, and the parties do not agree on how the debt should be divided. In such a case, the card issuer will not care about either’s obligations, and will assess interest and penalties that become the responsibility of both account holders. Finally, if one of the account holders dies, the other will still be responsible. But if two people have separate accounts, the debts of the deceased may only be the responsibility of that person’s estate, depending on their relationship and the laws of their state.

Which Banks Offer Joint Credit Card Accounts

Not all credit card issuers still offer joint credit card accounts, and some have stopped doing so in recent years. Currently, Bank of America, Wells Fargo, U.S. Bank and Discover still allow customers to open joint credit card accounts, while in 2013 Chase announced it was discontinuing the practice. HSBC and Capital One have also discontinued them.

Should You Open a Joint Account?

In most cases, opening up two accounts, or making someone an authorized user on another person’s account, will allow two people access to the credit that they need. But if you are looking to open a joint account with one of the remaining card issuers that allows that practice it is vital that both parties understand the risks of doing so, and have some plan to split their debts in the event that their relationship ends.

Opening up a joint account is an important financial decision, and couples will need to make the best choice for their individual needs.