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8 Bite-Sized Tips for Handling a Joint Credit Card Account

September 28, 2017

For some people, managing just their own credit card account can be a challenging task. So imagine what would happen if they had to handle a joint card account? Many times individuals open joint credit card accounts after they get married, or in cases where they want their grown-up kids to build a good credit score. While a joint credit card account can have its benefits, it’s not a decision that should be entered into lightly. For your benefit, we’ve compiled a list of the rules you must adopt before you take this monumental step.

  1. Decide on a Spending Limit: It can be quite disastrous if one of the account holders exceeds the spending limit authorized by the card issuer, for it could have a negative effect on both the cardholders’ scores. For best results, it is advisable to keep the balance below 30% of the authorized limit. So make sure you both adhere to this rule at all times.

  2. Set a Threshold for Purchases: Both account holders need to select a purchase limit beyond which they would require each other’s approval to execute the transaction. For example, you may decide that any purchase above $150 would require both cardholders’ approval. This way you can ensure that there are no surprises when the bill comes, or when the other partner gets ready to make his or her own purchase.

  3. Tell Your Partner When You Use The Card: Transparency is important when it comes to smooth functioning of a joint credit card account, so both partners should ideally inform each other whenever they use the card. This way the other account holder will always know the reason behind the difference in balance when he or she uses the card.

  4. Check the Balance before Using the Card: If your partner has used the card without your knowledge, you might accidentally exceed the authorized limit if you use it to make another purchase without first checking the balance.

  5. Determine Who’s Going to Pay the Bill: The best way to overcome this dilemma is to pay the bill from a single account to which both of you contribute. If that’s not possible, you should decide beforehand who will be in charge of paying the bill, and when.

  6. Know Each Other’s Spending Habits: No two individuals are alike, so while you may be a thrifty spender, your partner may be a spend thrift! Before you get a joint account, discuss each other’s spending habits, so you’ll both know what to expect, and hopefully there will be fewer arguments later on.

  7. Understand that the Card Affects Both Individuals’ Credit Scores: Opening a joint account with a person with a history of bad credit may pull down your credit score too. This is because, in most cases, it has been seen that someone who is irresponsible with credit will always remain so. Thus, take careful note of this before you open a joint account with someone.

  8. Realize the Results of a Split: While making a new beginning, no one wants to think about nasty endings; nevertheless, this is a point over which you must ponder. Even if you break up with the account holder or get a divorce, both of you are still responsible for paying the bills. There have also been cases of revenge spending, when a disgruntled ex has run up a huge bill and refused to pay it. This means that while one account holder kept spending, the other kept working to foot the bill.

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Ari Page Ari Page is the CEO of Fund&Grow. He resides in Spring Hill, Florida with his wife and two children.

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