If you have a spouse or significant other in your life, then you probably have thought about getting a joint account together. But if you`ve landed on this page, you`re not sure what it means to share an account, and what responsibilities and what consequences are in order when you two share a credit card account.
Having more than one person in charge of one card can be difficult, payments can get missed and cards can get maxed out easily. So communication is an important factor to consider when opening a joint card with someone. When searching for the correct joint card you might stumble across terms such as "jointly held" and "co-signed," they all mean the same thing. They mean that two people will be equally responsible for this card, in regards to fees and amounts borrowed. Both names on the card will legally be allowed to use the card and will be authorized to make payments on the card. If one of the co-signers is sued over debt, the other one will be too, and the information shows up on both parties credit reports. It is truly a joint partnership.
First, these types of accounts may tricky as not all banks offer these types of cards. And if the relationship goes sour or for some reason, you two want to exit out of the joint card, most credit card issuer require that the balance be zero on that credit card.
An "authorized user" is a different ballpark. If you add an authorized user, it`s like inviting a guest to use your credit card, but they are not legally responsible for payments and won`t be taken into debt with you if you default on your credit card. The card is still the primary accountholders in the credit card issuers` eyes, and they are responsible for payments. The accountholder can remove an authorized user at any time, but like with a joint account the purchases will show up on both the primary accountholder and the authorized users credit reports.
Shared accounts in general can be headache, in fact, many experts in the industry don`t recommend these types of accounts. Authorized account can be good for parents trying to help their children build up their credit. For couples, it`s best to keep finances separate, and be a responsible adult and take care of your own credit card. Your credit score, which in essence is your future in America, is on the line.