December 19, 2023

What is a Joint Credit Card? Pros and Cons

When it comes to navigating the world of credit, tools like joint credit cards offer a unique way to manage finances as a couple. Often used by spouses or partners, they’re a testament to trust because both parties put their credit scores on the line.

Wondering if you can get a joint credit card? We’ll dive into what they’re all about and how they can help you make informed decisions for your financial future.

What is joint credit?

A joint credit card is an account shared by two cardholders, allowing both to make purchases and build their credit together.

Unlike an authorized user, each cardholder on a joint credit card is equally responsible for the account. This means both parties can view transactions, make payments, and make changes to the account.

The credit card company, whether it’s Chase, Capital One, or another financial institution, evaluates the credit report of both applicants before approving the card. This evaluation checks the cardholders’ credit scores and payment histories.

How joint credit cards work: Building credit together

Before you and a partner decide to open a joint credit card, you have to consider its impact on your credit score. Every purchase, charge, and payment made on this card will affect both cardholders' credit.

Positive behaviors, like timely payments and maintaining a low balance, can boost both people’s credit scores. On the flip side, if one holder overspends or misses a bill, both cardholders' scores could suffer.

Joint responsibility means both people are responsible for any debt accrued on the card. If one cardholder fails to repay, the other has to legally cover the debt.

This shared responsibility can be beneficial, allowing both people to earn rewards or cash back on their purchases. However, it also means both must be vigilant about spending and making payments to avoid accruing interest or negatively impacting their credit scores.

Pros of a joint account

There are many potential benefits to a joint credit card. Here are just a few:

Easier financial management

With a joint credit card account, cardholders can merge their transactions, which can lead to fewer bills and easier financial management.

Opportunities to improve credit

A credit card joint account allows people with lower credit scores to access favorable credit card terms they might not qualify for individually. It's a chance to uplift one's financial standing with the support of a trusted partner.

By keeping a positive payment history and making sure payments are on time, a joint account can help elevate both cardholder’s credit scores.

Reach rewards faster

Both cardholders benefit equally from the card's perks, whether earning rewards, cash back, or special offers. It's like a financial buddy system where both people build benefits together, maximizing the card's rewards.

Cons of a joint account

Despite its benefits, a joint account can pose some drawbacks and risks:

Shared responsibility means shared consequences

Both cardholders are equally responsible for the debt on the account. If one person incurs significant charges, both are legally bound to repay them. This shared liability can lead to complications, especially if they disagree over the debt.

Potential impact on credit scores

The actions of one cardholder can affect the credit scores of both. For example, if one person accumulates a large balance or misses a payment, it can negatively impact both cardholders' credit reports. Both parties must be diligent in their card usage and payment habits.

Relationship changes can complicate matters

Joint accounts can become problematic if the relationship between the cardholders changes, like in the case of a divorce or separation. Both people must agree on a detailed plan before handling the account just in case things go wrong. There may be a chance one party misuses the card to the detriment of the other.

Disagreements over spending

Credit card sharing can lead to disagreements over spending habits, repayment strategies, and overall account management. This stress can strain the relationship between the cardholders. However, setting boundaries while engaging in open dialogue can mitigate these potential conflicts.

Considerations before getting a joint credit card

Entering into a joint credit card agreement is a significant financial decision. Both cardholders are equally responsible for the account and sharing the liability for any debt. Before applying, discuss financial habits, spending limits, and how you'll handle bill payments. Consider factors like interest rates, pay schedules, and grace periods.

Also, think about reviewing each cardholder's credit report to spot any potential issues. Late payments or high utilization on a joint account can negatively impact both cardholders' credit scores.

It's also wise to discuss what will happen if one person wants to remove themselves from the account or if the relationship between you and your partner changes.

How to apply for a joint credit card

Ready to apply for a joint credit card? The process is pretty simple. Most credit card companies have online applications that make the process seamless.

Both future cardholders must provide personal information, including their credit history and income. The credit card company evaluates this data to figure out the card's credit limit and interest rate. Both cardholders should aim to have a good credit score, as this can lead to better terms and higher rewards.

Before applying, discuss spending limits, bill payments, and how you'll share any rewards or cash back with your partner. Set clear expectations upfront to prevent misunderstandings and to make sure everyone is on the same page.

Alternatives to joint credit cards

If you're hesitant about opening a joint credit card, there are alternatives.

One person could become an authorized user on the other's credit card. This allows the other person to make purchases and build credit without legal responsibility for the debt. It's a way to share a credit card without the joint liability.

Another option is a secured credit card. These cards require a deposit, which sets the credit limit. They're an excellent way for people to build or rebuild credit without the risk of overspending.

Finally, some couples opt for separate credit cards but share the responsibility of paying the bills. This approach keeps the liabilities separate but allows for shared financial management.

Make EarnIn part of your financial journey

Joint credit cards can be a great way for couples and partners to manage finances together. The EarnIn app offers powerful tools that can help you confidently navigate the world of joint credit.

Our Cash Out tool lets you access your pay as you work — up to $100 a day and up to $750 every pay period — so you have what you need to keep moving forward, whatever life sends your way.

Download the EarnIn app today and experience money at the speed of you.

Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.

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