Is a joint credit card a good or bad idea?

February 11, 2008 7:00 AM

My fiancé and I are considering getting a joint credit card and I had a few questions about it.

Background: Engaged to be married, living together and all finances are joint (with the exception of assets in existence before we moved in together six months ago). We have four credit cards between us, with him actively using a Discover card as well as a Visa/MasterCard card for places that don’t take Discover. I really only use one card on a regular basis, a Visa/MasterCard. I’m pretty much the one that takes care of the bills, mostly because I get home first. We pay all balances in full each month. We both have very good credit and no credit-card debt.

I am trying to get us to stick to keeping a budget, which I know we can do, but it’s hard with fragmented finances and all the different cards. I don’t usually know what he’s spent until the statement comes in 3-4 weeks later, so it’s hard to have a real-time picture of how much is left in the various categories of the budget. Plus, it would probably simplify things if we just used one card for both of us since it all comes out of the same place and would be one bill vs. three.

We have been talking about a joint credit card for some time, but I feel sort of uneducated and a little nervous about the whole thing. Other than the possibility that I could go on a wild spending spree and he’d be liable for the charges, what are the risks of a joint card (particularly if we’re not yet married)? How can we protect ourselves from these risks (including that spending spree)? And finally, what cards do you recommend? We both like the cards we’re with – so should one of us add an authorized user to the account, or should we start fresh with a new account together? Any recommendations on non-travel reward cards? Is there anything else I should be asking or considering? Am I over-thinking this? I found a few articles on the web, but they were kind of generic and for people with bad credit or debt problems, so I thought I'd turn to you guys.

Thanks everyone.

posted by ml98tu to work & money (6 comments total)

can you get balance updates for your existing cards online? all of the cards i have allow for this and most will email me a balance update at set intervals. if it is difficult to keep track of all four cards separately perhaps a service like mint which aggregates the statements would be helpful.
posted by phil at 7:09 AM on February 11, 2008

Adding an authorized user is a bad idea. It gives you all the downside (joint liability) with none of the upside (increased credit ceiling on report for both parties). In general, the only real upside of a joint card is that you might qualify for a higher limit that either of you would get on your own. I mostly get credit cards that give me something (cash or frequent flier miles or hotel points) and it is actually better in my case for my wife and I to get two different cards in our own names so that we both get the freebies. Also, should you ever slip and pay one late, it will only affect one of your credit scores. For the most part, I think keeping separate cards is better even if your finances are shared when you both have good credit. Applying for two different cards as individuals will usually give you more credit than applying for one joint card.
posted by Lame_username at 7:20 AM on February 11, 2008

It sounds like this is just an organization issue, and getting a joint account won't help very much.

Have you considered using a free online account aggregator like Yodlee? I use it, and it gives me a real-time dashboard view of all my balances for bank accounts, credit cards, investment accounts, etc.

You can also mark each transaction in a category and check how much you're spending in each category each month. There are also some built-in budgeting features, but I haven't used them.
posted by burnmp3s at 7:36 AM on February 11, 2008 [1 favorite]

Any recommendations on non-travel reward cards?

My current faves:

Discover Open Road: 5% cash back on gas, up to 1% on everything else

Chase Rewards MasterCard: 3% cash back on the three categories of "everyday purchases" you buy each month, 1% on everything else, save up $200 in cash back and you get a $50 bonus

FNBO Direct ExtraEarnings Visa: 2% cash back on everything for the first year.
posted by kindall at 8:59 AM on February 11, 2008 [1 favorite]

There's a strong practical argument for having no joint accounts--my dad, a banker, lists that as one of his top three pieces of financial advice for married couples. In a society that increasingly relies on credit ratings, your idea is a risky proposition with, as others note, limited upside. You need a credit card to buy something you can't pay for now. You're unlikely to both need a credit card at the same time to buy something you can't pay for now. Consider credit cards as a cross between the lottery and crack: all are based on exploiting a glitch in our circuitry. It may not have always been this way, but it's getting worse.

Credit card companies will use almost any pretext to raise your rate and assess penalty fees, all the while encouraging you to spend more. At the very least, consider a charge card like Amex--particularly their small business card (it's based on personal credit), which offers, I think, "country club billing" and expense report options. You have to pay off the balance for each month, which shouldn't be a problem. Just avoid all of the credit-like features and payment plans they try to add on.

Alternatively, consider a visa-backed debit card, using a new account to which you contribute a fixed amount each month. If your spending disciplines are as you claim, you shouldn't find this a burden, and it may even enhance your budgeting.
posted by Phred182 at 11:33 AM on February 11, 2008

Thanks everyone - based on your answers we realized the only real advantage was the transparency. We don't need the increased credit ceiling or other advantages and the disadvantages aren't really worth it.

Burnmp3s, I actually signed up for Yodlee a little while back and hadn't really utilized it. We added his credentials last night and poof, everything, right there! Plus it tells me when the payment is due, so I can keep track of that as well. Thanks for the suggestion.
posted by ml98tu at 7:17 AM on February 12, 2008