Consumer Law

Joint Credit Cards

A joint credit card is a credit card account that is opened in the name of two people and both people agree to be responsible for the charges on the card - no matter who actually makes the purchases. A credit card company considers the credit history of each person when you apply for a joint account.

You will need to be able to communicate with the co-owner of the credit card account about purchases so that neither one of you goes over the credit limit. You will also want to discuss large purchases and agree on those since you will both be responsible for paying the bill. If you and the person that you are considering opening a joint account with do not agree on financial matters then you should not get a joint credit card account.

Joint Account Holder vs. Authorized User

A joint account is different from being an authorized user on an account. If you are an authorized user, you get a credit card in your own name that you can use to make purchases but you are not responsible for paying the bill and your credit score will not be affected by the account owner's payment history under the new FICO 08 (Fair Isaac Corporation) scoring model, which should be in use by credit reporting agencies sometime in 2008. Under earlier formulas for calculating credit scores, credit card account history could be a factor if you were merely an authorized user on an account. Joint account holders, on the other hand, are equally responsible for the bill.

Joint Credit Card Advantages

There are advantages to having joint credit cards. A joint account may:

  • Enable someone with poor or no credit to get a better interest rate and higher credit limit than if that person applied for an individual account
  • Bring up or improve the credit scores for both people
  • Simplify bill paying and budgeting
  • Allow a parent to help a child establish credit

Joint Credit Card Disadvantages

There are disadvantages to having joint credit cards. A joint account may:

  • Damage the credit score of both people if bills are not paid on time
  • Make one person responsible for the debts incurred by the other person

Separate Credit Card Advantages

There are advantages to having separate credit cards. With a separate credit card account:

  • Your credit scores are separate
  • If a bill is paid late, it will affect only one of your credit scores
  • Your total credit will probably be more when you apply for two different cards as individuals
  • You can decide on your own how you want to use credit and pay your bills
  • If you make a bad financial decision, you don't have to feel bad about damaging the other person's credit rating
  • You can eliminate a major source of conflict in the event that you are ever separated or divorced

Canceling a Joint Credit Card

Canceling a joint credit card can be done by one of the owners, as long as the account is free of outstanding debt. Credit card issuers will generally not let you out of your binding contract with them if there is a balance on your card, so you will probably need to pay off the outstanding balance in full before any changes can be made to your account. After it's paid off, either you or the co-owner can close your account. A joint account holder can close the account to new purchases before the card is paid off, which will limit your responsibility for any additional purchases made by the other joint account holder.

Before You Sign on The Dotted Line

Before you get a joint account with another person, make sure that you understand the advantages and disadvantages. It can be beneficial to both people if you have compatible spending habits and savings goals. It is better to avoid potential credit problems by having separate credit card accounts if you have different spending habits or if you don't completely trust the other person. Be sure to read the terms of service and conditions of the credit card issuer carefully before you get a joint account and do not hesitate to directly contact the credit card company with any specific questions that you may have.

Questions for Your Attorney

  • I asked my credit card company to remove me from a joint account, since I did not agree to any of the charges that my partner ran up, but they refused. Are they required to remove my name from the account?
  • My divorce agreement states that my ex-spouse is supposed to pay off our joint credit card account. If my spouse does not pay off the card, can the credit card company come after me for the debt?
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