To share or not to share, that is the question.
It’s no secret that money issues are a common source of contention in couples, as we’ve covered in this space before. And it’s also no secret that one of the leading reasons why marriages end is due to money issues. But at the same time, finances are an important point of discussion — and an important part of any relationship. And as couples get serious, money talks should heat up too.
While it’s not uncommon for couples to share a checking and savings account, the jury is still out on whether or not it’s a good idea to share a credit card. As you might expect, there are both pros and cons to sharing one, so it’s up to you and your significant other to determine whether it’s a good idea.
Let’s take a look at some of these pros and cons:
The Case for Sharing a Credit Card
- Your spouse needs to establish credit history: If you or your spouse has a limited credit history, going in together on a credit card — especially with someone who has a more established credit history — can greatly help. Not only will it help establish credit history, but it will also likely result in a credit score increase for anyone with thin credit history. Credit history does account for 15 percent of your FICO credit score, so it is important.
- It can increase spending transparency: Many relationships go south or end because of money issues. But sharing a credit card is a great way to have discussions about responsible spending and enhance spending transparency between you and your spouse. With a shared credit card, it’s easy to track what both you and your spouse are spending. And when you know what’s going on, it’s easier to hold yourselves more accountable.
- You can go the authorized user route: Don’t want to share a credit card? You can add your spouse as an authorized user. This will give your spouse spending permissions, but you can remove him/her at any time for whatever reason.
- It’s simple: Finally, sharing a credit card is a much easier way of tracking expenditures than having to manage several accounts. All expenses are essentially in just one place, making it easier to not lose track of payments.
The Case Against Sharing a Credit Card
- Spending transparency isn’t always a good thing: While spending transparency can be a good thing for some couples, it’s not a good thing for others. That’s because it can lead to arguments over who is allowed to spend what and even more arguments if one of you is regularly spending more than the other. Sometimes it’s just better to let each of you worry about your own expenditures.
- Maximizing rewards: Many couples think that they can maximize the credit card awards they can earn if they share a credit card. In reality however, this isn’t likely true. That’s because you can’t forget about the signup rewards that many credit cards offer. If you share a credit card, you’ll only be privy to a single signup reward. If you each get a card, however, you’ll double it. Assuming it’s a similar — or the same — card and you can earn the same rewards after the signup bonus, you’ll essentially still be earning the same amount of rewards.
- Your spouse has poor credit: Generally when a couple shares a credit card, they’ll base interest rates on the individual with the lower credit score. So if your spouse has poor credit, you could be sacked with a much higher interest rate than if it were just you applying for one.
- You’re responsible if the relationship goes south: This is arguably the biggest reason against sharing a credit card, that being if the relationship goes south, you’re on the hook for any remaining balance with your spouse. And if you don’t pay it or come to an agreement with your ex on a payment strategy, your credit card is certain to take a hit. In fact, you’re legally responsible for any debt.
Obviously, there’s a lot to consider here. And, let’s make one thing clear: this isn’t a blanket solution, and it’s not intended to be. Every couple has different spending habits and preferences, so it’s up to you to decide. Hopefully, we’ve given you the tools you need to make that choice.