Let’s say you’ve moved in together and now you’re sharing everything, from dish duty to a Netflix account to utility bills. And before you know it, you can’t remember who paid for what, and who owes who.
Based on our research at Zeta, opening a shared credit card is often one of the first steps that couples will take once they’ve decided that they’re ready to merge their finances. It has some distinct advantages for a relationship, though it also comes with some risk. We’ll lay it all out for you here, along with a list of the 5 questions that we encourage all couples to chat through before taking the plunge.
First, let’s walk through the pro’s and con’s of getting a joint credit card.
The case FOR joint credit cards
- It’s easier to split and manage shared expenses. We see couples who Venmo each other 4–5 times a day (we’re not kidding). And if it’s not Venmo, you might be tracking your expenses in a spreadsheet, or just paying each other back when you remember (if you remember). It can be annoying to manage and difficult to budget around. When you have a joint credit card, on the other hand, you can just split the bill — however you want — at the end of the week or month.
- It makes tracking what you spend together simple. When you each only swipe for part of your shared expenses, it can be harder to get a handle on your overall spending habits. How much are you spending on eating out, or on your pets? Putting all those charges on one credit card gives you a single view of your spending at the end of the month, and can help you spot patterns more clearly.
- The rewards. We’ll say it again: the rewards! We’ve seen couples put those credit card points towards everything from a coffee machine to dates nights to travel. So if you do decide to open a shared credit card, we encourage you to shop around for the one that will give you maximum points for the things that you’re already spending on together.
The case AGAINST joint credit cards
- Your partner could rack up debt that you’d be responsible for. When you get a joint credit card, you take on responsibility for any and all debt accrued on the card. And there’s some risk that comes with that. If, for example, your partner is especially angry at you one day, they could legally max out your shared credit card, leaving you responsible for the balance. While that might sound extreme, we’ve sadly heard that story many times over.
- You have less control over how much you spend. One reason that some couples decide not to share a credit card is because they have different spending habits. We had one woman tell us how much it frustrated her that the grocery bill was always much higher when her partner did the shopping — because he was much less careful about what he bought than she was. But because they had a shared credit card, it meant she was forced to split those expenses, even if she wouldn’t have bought those more expensive items in the first place.
- You can impact each other’s credit score. A joint card means any missed or late payments will impact both of your credit scores. Before jumping into a joint card, be sure you discuss what could happen and what’s at risk.
Now that you’ve got the pros and cons of a joint credit card, we recommend having an open discussion as a couple about these five questions:
- How long have you been together? Said another way: how committed are you and your partner to the relationship? That will inform you both of how much responsibility you’re willing to take on for debt accrued on the card. For example: a married couple might be more open to co-owning balances on a shared card, even if one partner was responsible for the majority of the charges. On the other hand, a couple that just started dating might not want to owe debt for something they didn’t accrue together. Generally, we see couples get a joint credit cards around big life events, like moving in together or getting engaged. The decision around timing is ultimately yours, as long as you understand the consequences.
- What are each of your spending habits — and have you talked about them? Because we all have different money languages, our spending habits often don’t match up in a relationship. Before opening a joint credit card, make sure to sit down and discuss what you want to charge (or not charge) to the card so you’re both on the same page. For example, are you primarily using the card for household expenses, or can it be used for any shopping? Is there an amount of money that you shouldn’t charge without discussing it together first (for most couples, that’s around $150)? We recommend having this conversations before you start making any purchases on the card.
- Does one of you have a much lower credit score? Take a look at each of your credit scores: if they’re really different, it might make sense to have the person with the higher credit score apply for the credit card, and make the other person an authorized user or co-signer (more on what these terms mean here). By leveraging the higher credit score, you could get better rewards points or a higher credit limit.
- What credit limit are you comfortable with? Because credit card companies want us to spend more on their cards, they’ll often give us high credit limits. So high that they’re beyond what most of us should realistically spend. For example, they could give you a $5,000 credit limit and the two of you could spend up to that amount, even if you never intended to take on that much debt. Do you think you’d ever be tempted to spend too much if you had a high credit limit? Talk it out before signing up.
Ultimately, there is no one right or wrong answer when it comes to deciding whether to open a shared credit card, or when. Every couple is different, so we encourage you to have an open discussion about what makes the most sense for your relationship and financial health.