Determining whether you should add a spouse to a credit card account can be tricky sometimes. Perhaps you’re worried that your spouse will damage your credit rating. However, helping a spouse build credit can be beneficial if you intend to buy a home, for instance. You have a better chance of getting a mortgage approved if you both have good credit ratings. In any case, consider what you and your spouse hope to accomplish by sharing a credit card.
People who haven't established a credit history can quickly begin building one if they're added to a spouse's credit account. However, this method of "piggybacking" on another person's account won't be effective if a spouse isn't a joint account holder. A joint account would appear on each spouse's credit report, and both spouses are responsible for repaying the credit card debt. That's crucial in helping someone establish a credit history and qualify for more credit in the future.
Naming a spouse as an authorized user on your credit card account isn't as effective as making them a joint account holder. Unlike joint account holders, authorized users aren't responsible for repaying credit card debt. So, an authorized user account may not help improve a spouse's credit rating. Some lenders don't focus on authorized user accounts when making lending decisions because they don't indicate whether the user pays debts on time.
People who have bad credit won't see their credit rating improve immediately if their spouse adds them to a credit card account. Collection accounts, repossessions, numerous late payments and other derogatory information on a credit report outweigh the benefits of being added to another person's account. Furthermore, a spouse’s credit rating can be damaged more if a joint account is paid late.
Make a Plan
Consider whether your spouse is a good money manager before you begin sharing a credit card account. Your credit history probably will suffer if you share an account with a spouse who regularly overspends and pays bills late. In any case, discuss your financial goals with each other, and determine how each of you will use a credit card you intend to share. For example, you may decide to use the card for household purchases rather than entertainment expenses.
Frances Burks has more than 15 years experience in writing positions, including work as a news analyst for executive briefings and as an Associated Press journalist. Burks has banking and business development experience, and she has written numerous articles on consumer issues and home improvement. Burks holds a bachelor's degree in political science from the University of Michigan.