When you open a credit card account, you often have the option to add another card user to your account. It’s important to understand the difference between an additional user and a joint credit card account.
The Basics of a Joint Credit Card Account
A joint credit card account operates much like any other joint credit account. You and the other person are both subject to a credit check. Once you both have been approved, a joint account is issued. You each receive a credit card, and you are each equally responsible for the repayment of the debt.
It’s vital to understand this reality. If you get a joint credit card account with your significant other, you are just as responsible for the debt as the other person. If you are married, and you have a joint account, and then you divorce, you will need to figure out how to apportion responsibility for paying off the balance.
Realize, though, that even though the judge may decide who is responsible for the debt, the credit account is still in your name as well. As long as the account is open, and you are both named as account holders, you are both equally responsible in the eyes of the credit card issuer -- and in terms of what is reported on your credit report. This means that it is usually a good idea to close the credit account and, if you can, have your name removed as an account holder if your ex has been ordered to discharged the debt.
What about an Authorized User?
An authorized user is a different situation altogether. When you add an authorized user to your account, you are still the sole account holder. You are responsible for the debt -- no matter how much an authorized user racks up. This is why it is so important to carefully consider who you want to add to your account, whether it’s a child or a spouse.
Your authorized user will still benefit from your good credit situation, but rather than sharing responsibility for repaying the debt, you are entirely responsible for the debt.
Separate Credit Accounts
More and more, credit card issuers prefer that you and your partner have separate accounts. Some banks won’t even issue joint credit card accounts anymore. Keeping your credit separate can be useful as you attempt to build your own financial reputation, and it’s possible to qualify, even if you are a stay at home partner. Check into the possibilities associated with your credit card account, and decide whether joint credit is best, or whether you should each have your own credit cards.