When people get engaged, they suddenly have to answer a number of questions about how they will spend the rest of their lives together. When will they get married? Where will they live? Should they combine their financial accounts?
When it comes to that final question, many couples are unsure whether they should open a joint credit card. There is no universal answer, as it depends on each couple’s unique situation. You will need to have an honest conversation about your finances and spending habits to determine what is right for you and your future spouse.
Before you make your decision, you will want to clear up some common misunderstandings that people have about joint credit cards. We take on three of those misconceptions:
Your partner’s credit cannot hurt yours. This is absolutely not true. If you have excellent credit and your spouse’s credit is less-than-perfect, your credit card application could be declined, as both of your scores will be taken into consideration. Thus, if you want to make sure your joint application will be approved, you will want to check both of your credit scores before applying.
You cannot help your spouse’s credit. This is another common misunderstanding. If your spouse is a secondary cardholder, the payment history will only affect your score. If you have a joint credit card account, though, the payment will be reported to both of your credit reports and will affect both scores. Thus, if your partner has a low score, opening a joint credit card and making on-time payments will help your future spouse rebuild credit. However, if you are worried your spouse may charge too much to the account, you may want to request a low credit limit so there can be no overspending which will get you both into financial trouble. It is also important that payments are made on time, or your credit score will suffer.
The debt will be split if you share a joint credit account. This is another credit myth. If you have a joint account, that does not mean you are both responsible for half the debt. In fact, it means you are both solely liable and responsible for the entire balance of the debt. If you are worried about being liable for someone else’s debt, you may want to keep your credit card accounts separate from your partner’s. Many couples have separate accounts, and it does not mean they do not love and trust their partner. It simply means both individuals want to be responsible for their own financial health.