Joint Credit Cards: 6 Perks and Pitfalls 

Joint credit cards allow couples to manage their assets and build credit together, which also means that both cardholders have to make payments and manage the account together. Joint accounts offer a lot of wonderful benefits as long as they are properly managed. Lack of responsibility and miscommunication, however, can harm both parties. That’s why you should know the perks and possible pitfalls of joint credit cards before getting one.

Perk: Improve Credit Score

A joint credit card can boost your credit score provided that you pay on time every month. If you can’t apply for a credit card on your own due to certain circumstances, you can take advantage of your partner’s better credit score to get a joint credit card that has better terms and interest rates.

Pitfall: Potential to Lower Credit Score

Joint credit cards may harm your score. If the other cardholder fails to meet their payment agreement, your credit score will be affected as well. That’s why you have to discuss how you’re going to make payments every month to make sure that you won’t miss any payments. Automatic monthly payments can help prevent missed or late payments.

Perk: Pool Rewards

Cashback rewards are pooled in the same account. Since the card will be used by two cardholders, you will be able to accumulate rewards much faster than using one card on your own. So instead of getting multiple credit cards, you can consider getting a joint credit card with your partner or someone you trust.

Pitfall: Limited Options

It’s not easy to find a reward program that matches your needs and lifestyle. That’s why you need to research the cashback percentage, annual fees and incentives before you apply for joint credit cards.

Perk: Streamline Finances

Joint accounts can help streamline your finances because the transactions of both cardholders are now processed using one account. A joint credit card can help you manage your finances and assess your financial health together.

Pitfall: Resentment and Stress

Dealing with a joint credit card can be difficult for couples who need to divorce or separate. Moreover, if either cardholder abuses his/her card privileges, he/she may add resentment and stress to the relationship. That’s why you need to discuss how you’re going to use the card, especially when you have to make large purchases.

Can You Remove Your Name from a Joint Account?

You can’t remove your name from a joint account without closing the account completely. Both cardholders should agree to settle the balance before they close the account. However, this will lower your score temporarily because your credit utilization ratio will increase.

If one of the cardholders passes away, you have to notify the credit card provider immediately. As long as there are no recurring fees on your credit card, you should be able to use it normally. And remember, on-time payments can improve your credit score. You should also assess your credit reports to check for any errors. If you see errors, you should dispute them immediately. Removing errors from your credit reports can help fix your credit score.