When to say 'I do' to sharing a credit card

Couple holding hands

You share chores, the costs of evenings out, maybe even a home with your beloved. But one of the biggest steps you two can take is sharing a joint credit card.

You don’t have to be hitched to have one, although it's a terrible idea to open a joint credit card before you marry.

But when you think you're ready to share a credit card with a sweetie, be prepared to open your financial life.

"When it comes to credit card use, couples need to communicate clearly about their financial issues," says Joanne Kerstetter, a spokeswoman with the credit-counseling firm Money Management International. "Having a plan for how to pay for their credit usage is absolutely required."

Having a plan means sitting down and asking each other some big questions ones about your financial pasts and plans, hopes and dreams for your joint financial future.

Is it time to marry our finances?

Mingling money adds financial and psychological heft to your relationship, and encourages openness and trust. But it also can be a major problem if your relationship doesn’t last, because undoing financial arrangements can be very difficult.

Scott Palmer, who along with his wife, Bethany, are financial planners and authors of First Comes Love, Then Comes Money, says unmarried couples should not comingle cards.

"If there’s a nasty breakup and one person refuses to pay the debt, the other may be stuck with paying it off. If you’re not legally wed, that’s a recipe for disaster."

Even if you are married, you need to sit down with your spouse and have what he calls the "transparency talk," about how your views about money compare and contrast, and how that will affect your relationship.

"A great place to start the conversation is to talk about money personalities and which one you are," Palmer says.

He cites five personality types: the spender, the saver, the risk taker, the security seeker and the flyer (by the seat of your pants).

The Palmers’ website lists 20 questions to ask to discover one’s money personality.

What kind of card should we get together?

There are two ways to share a credit card.

You can both apply for the card and become joint account holders. Or a spouse can apply and add the other as an authorized user to the account.

There are pros and cons to each option.

Joint holders are both responsible for charges to the account. But if one spouse has bad credit, the card issuer may not approve a joint account, even if you’re applying together.

That may mean you’re more likely to be successful if the good-credit spouse applies for a card, then adds the other as an authorized user.

If you need help repairing your credit, piggybacking on your spouse’s credit will let you build up positive credit habits, which will eventually show on your credit score.

The downside is that being an authorized user is not the same as being the actual cardholder. If your spouse doesn’t like how you’re using the card, he or she has the power to cut off your card access.

That’s why Palmer doesn’t like this option.

"A card with limitations for one of you won’t work," he says. "If the cardholder cuts his spouse’s access off, that’s basically saying, 'You don’t make the money decisions, and certainly not with my name on it,' and defeats the purpose of teamwork. You should work together to restore a spouse’s bad credit, and it will just take time to repair it."

What expenses should we put on the card?

While you think a credit card should be used for emergencies, your significant other might think "an emergency" can extend to a new suit for a job interview or a hi-def TV for the Super Bowl.

So you should discuss beforehand the types of expenses and dollar amounts that make sense for your budget, so neither person is shocked when the card statement arrives.

But before you decide that, Kerstetter recommends you figure out what your incoming cash flow and regular expenses are monthly.

"Understand how much you’re making, how much you’re spending on fixed expenses, and what the costs are for your monthly entertainment and regular hobbies," she says.

"That will help you create a monthly budget, figure out where to cut costs and make sure you don’t take on too much card debt."

Who will handle the credit card management?

It’s great to know you and your loved one share the same financial goals and outlooks, but it’s also great to know that your credit card fits your financial needs and is getting paid on time every month.

So part of your initial money talk should be deciding who’s going to manage the credit card, from checking the account for unauthorized charges to actually making the payment.

Palmer says there should always be a primary person handling the mundane money matters.

Maybe the one with the higher credit score might want to manage the credit card.

But it all comes down to transparency.

"I do our credit card management, but I always sit down with Bethany during our money huddle and show her what’s happening and how I’m handling it. I don’t make a decision on something like changing cards or making a big-ticket charge without asking her first," he says.

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