Guide on How to Manage a Joint Credit Card Account

If you are planning on setting up a joint credit card account with another person, you have two choices. You can add the person in question as an authorized user or to add the person as a second joint account holder. As an authorized user, the person is not legally responsible for making payments on the card but he can make purchases using the card. On the other hand, a joint account holder has the same level of responsibility in payments just as the original owner.

In order to help you manage your joint credit card account, consider the following tips:

One: Because maxed out credit cards are bad for your credit scores, you need to set up a maximum amount of balance in order to avoid hurting your and the other person’s credit score and keep the total balance in manageable level. Ideally, do not carry a balance that is more than 30% of your credit limit.

Two: In order to avoid any nasty surprise when credit bills start pouring out, set a limit on the amount of money you and your partner can use for larger purchases. On the other hand, if you know you have to make purchases that many exceed your credit limit, it is best to discuss the situation first with your partner before you go ahead and buy the item.

Three: Always let each other know if either one of you made a purchase. Of course, you do not need to report every single activity you make with your credit cards; you just need to share information to the other person in order to avoid each from exceeding the credit limit.

Four: Always check the balance before you use your card. Since you are not the only person using the card, it is possible for the balance to not stay the same as it was the last time you checked it. Therefore, it is best to check with your card company to determine the precise amount of balance you have on your card before you use it.

Five: Do know that regardless if you have a joint account or an account with added authorized user, both parties’ credit will be affected by each other’s credit habits. In hindsight, adding someone to your personal account is a huge decision which is why you need to make sure you are sharing it with someone who can handle his expenditures well. If you happen to share it with someone who is a compulsive buyer or someone who cannot keep track of his expenses as at all, you may be risking getting bad credit.

Six: Understand each other’s spending habits. If you are prone to spending large amount of money on your card and your partner is not (or vice versa) you need to take this issue in consideration before you share one account. One way to do this is to imposing certain limits on expenditures or letting the other person know when you are about to make expensive purchases. This way, both parties can determine each other’s spending habits while also avoiding any nasty surprises once the billing statement arrives.