When it comes time to pay bills, some couples may consider opening a joint credit card account, while others opt for adding their new spouse to their existing sole credit card account as an authorized user. Which is best for you?
Before you decide, learn a little more about each option, including some pros and cons.
Joint Credit Cards for Spouses
How it works: Both spouses sign the application and subsequent credit card agreement for a joint credit card. Your approval may be based on total household income, debt and individual credit scores.
What it means: 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 spouse’s spending habits before getting a joint credit card.
The credit card company reports account activity to the credit bureaus regularly, so 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 statements. One of you may agree to waive receiving your statement to avoid duplicate mailing.
Take note: Some lenders (including Tangerine) don't offer joint credit card options. In these cases, couples may apply for completely separate credit cards or consider adding a spouse as an authorized user on an existing card (see below)
When a Joint Credit Card Makes Sense
Joint credit cards may make good financial sense in these situations:
- both spouses have good credit scores, good incomes, and responsible financial habits, and they 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 the card individually
- one spouse has good credit, while the other wants to establish credit
Adding an Authorized User
How it works: For most credit card accounts, and sometimes for a fee, Canadian cardholders may add a spouse (or someone else) to the account as an authorized user. It can be a simpler process than signing up for a new joint account since a credit check or income details for the additional user are not usually required. (Tangerine Credit Cards allow up to five additional authorized users on a card)
What it means: The new user gets their own card attached to the spouse's account and gets to enjoy the same credit card limit and potentially some of the benefits, but their spending won't have any effect on their individual credit score. That's because the primary cardholder is usually considered to be solely responsible for the debt incurred on the card — though this isn't always the case, so read your agreement carefully!
When it makes sense to add an authorized user
Adding a new spouse as an authorized user may be a good option in these situations:
- 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 card issuer doesn't offer joint credit cards
Start your joint financial life off on the right foot. While there may not be one credit solution that's best for all couples, everyone should carefully read the credit card agreement's fine print before making a decision.
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