As wedding season rolls around, some couples may consider opening a joint credit card, while others opt for adding their new spouse to their existing sole credit card account as an authorized user. Which option is best for you?
Before you decide, learn a little more about each option.
Joint Credit Cards for Spouses
For a joint credit card, both spouses sign the application and subsequent credit card agreement. Your approval may be based on total household income, debt and individual credit scores.
The account is in both names. You're both responsible for making payments on the total balance, regardless of which spouse incurred the charges, so think about whether you're comfortable with your new spouse's credit card habits before getting a joint credit card.
The credit card company reports account activity to the credit bureaus regularly, so credit card activity, whether positive or negative, impacts each account holder's credit.
Joint credit card borrowers are each entitled to copies of the credit card agreement and monthly credit card statements. One of you may agree to waive receiving your statement to avoid duplicate mailing.
And take note: Some lenders don't offer joint credit card options. In these cases, new couples may apply for completely separate credit cards.
When a Joint Credit Card Account Makes Sense
Joint credit cards may make good financial sense in these situations:
- both spouses have good credit scores, good incomes, responsible financial habits, and want the higher limit of a joint credit card based on both incomes
- both spouses have good credit scores, yet one spouse has less income and won't qualify for a credit card individually
- one spouse has good credit and one spouse wants to establish credit
Your Spouse as Authorized User
For most unsecured credit card accounts, and often for a fee, Canadian credit cardholders may add a spouse (or someone else) to the account as an authorized user. This doesn't usually require a credit check or income details for the authorized user.
While many Canadian credit card companies hold the primary cardholders solely responsible for card debt, the Financial Consumer Agency of Canada cautions some credit card agreements state even authorized users are liable for the card balance, even if they didn't sign the application. Read your agreement carefully!
Adding a new spouse as an authorized user may be a good option if:
- a joint application gets denied because one spouse has poor credit
- you want to avoid the inconvenience of going through a full credit card application for a joint credit card
- your preferred lender doesn't offer joint credit cards
Start off your joint financial life on the right foot. While there may not be one credit solution that's best for all couples, everyone should read the credit card agreement's fine print carefully before making a credit card decision.
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