The Pros and Cons of a Joint Credit Card

The Pros and Cons of a Joint Credit Card article image.

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Joint credit card accounts allow you to share a line of credit—and responsibility for debt repayment—with another person. They have benefits and drawbacks that should be considered before opening an account.

For example, joint accounts can give those with lower credit scores the option to improve credit and get access to credit card terms they wouldn't otherwise qualify for. But there is a risk of complications with joint accounts, since one cardholder could make large purchases and leave the other legally responsible for repaying them.

Here are the major pros and cons to be aware of.

Pros and Cons of Joint Credit Card Accounts
ProsCons
Fewer bills to manage since account holders can consolidate transactionsPotential for complications if the cardholders' relationship changes
Consumers with lower credit scores can access more favorable credit card terms with a joint account ownerBoth parties are legally responsible for debt repayment, even if only one incurred the debt
Consumers with lower credit scores can potentially improve their credit with positive payment historyPotential for disagreements over spending habits, debt repayment and account management

What Is a Joint Credit Card Account?

A joint credit card account allows you to be a co-owner of a credit card with another person, such as a spouse, close friend or family member.

Sharing a joint credit card account is different from adding someone as an authorized user to your account. As joint account holders, both cardholders are legally responsible for paying the debt that either one accrues. An authorized user, on the other hand, can make purchases with the card, but isn't liable for the debt they incur. Only the account owner will be penalized for accruing debt they can't repay or missing payments on the account.

If you're interested in opening a joint credit card account, it's important to note that this type of account is increasingly rare, with only a few major financial institutions still offering them. Authorized-user accounts are more common.

Pros of a Joint Account

A joint account can be useful for people who want to share the responsibilities of card ownership. A few of the advantages include:

  • An account owner with lower credit scores can get access to more favorable terms. If one of the cardholders has less positive credit history than the other, they can take advantage of the joint account holder's higher credit scores to gain access to better interest rates and higher credit limits on a credit card.
  • A joint account can help account holders improve their credit. If the account is kept in good standing—meaning payments are made on time, every time—a joint account can help lift the credit scores of a cardholder who could benefit from positive credit history. It can be a useful way to build and establish credit for someone who needs it.
  • Fewer bills to keep track of. A joint account can make it easier to manage bills each month. That can help account owners, like a married couple, simplify their finances. Both users can also share all the privileges of a card, like credit card travel rewards or cash back.

Cons of a Joint Account

Joint credit card accounts have some major disadvantages. Before opening one, take these into consideration:

  • Both account holders' credit history will be affected. If one credit card user racks up a lot of charges on the account or payments are missed, both of the account owners' credit scores will take a hit. Both joint account cardholders are equally responsible for paying off the card's balance, regardless of who incurred the charges.
  • Disputes over the card can cause issues in a relationship. A shared account can lead to disagreements if both users don't agree about how much to spend or who should make payments.
  • Changes in the relationship can make things complicated. If you divorce or experience another kind of separation, you will need to close or otherwise figure out how to move forward with the account. It's also possible that one user could purposefully spend or skip payments to hurt the other's credit.

Should You Open a Joint Credit Card Account?

If you're considering a joint account, have a frank discussion with the co-applicant about the responsibilities that come with having the card. It's good to put it all out on the table, including your spending habits and credit philosophy in general.

Make sure it's clear to your co-applicant that they will be legally responsible for repaying any charges you make, and vice versa. Set up guidelines for how much you both expect to charge to the account in total, how you'll make payments and how you'll avoid accruing debt and interest charges.

If a joint credit card sounds overwhelming, it might make more sense to add the person as an authorized user. They'll be able to make purchases, but you'll still have full control over the account. The account can even help improve the authorized user's credit, if that's a motivating factor for opening a joint account.

Even if you do choose to use a joint account, both cardholders could consider opening a separate credit card account in their own names too. That provides a backup in case the relationship ends or the joint account isn't working out.

How Adding an Authorized User Is Different From Having a Joint Account

While many financial institutions don't offer joint credit card accounts, authorized-user arrangements are easy to set up through most major credit card issuers. An authorized user is allowed to make charges to the account, but since they're not responsible for making payments, there's no risk that they will fall behind on the arrangement and damage the main cardholder's credit with missed or late payments.

Of course, there is the risk that they will charge more than the main cardholder is willing to repay. There is an option that can help you avoid this issue, however: Many card issuers allow the primary account owner to set spending limits for authorized users. You can also remove an authorized user from the account at any time. This allows for more control over the account than a joint account holder arrangement provides.

Considering Joint Credit Card Ownership

Since there are several ways a joint credit card account can cause difficulties for the cardholders, it's especially crucial for both parties to agree on how they plan to use it.

If there's a possibility that one or both cardholders will spend more than they've agreed to, could miss making payments as required, or that the relationship will not continue for the foreseeable future, consider keeping your credit card accounts separate or using an authorized user arrangement instead.

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