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Whether you're getting married or moving in with your partner, some of the biggest relationship milestones come with substantial price tags. That could include the cost of a wedding, furniture for a new apartment or even just spending more on your weekly grocery bill now that you're shopping for two. And with these bills should come conversations about how you want to manage your money as a couple and if that should include sharing a credit card.
But is it a good idea to open a joint card? Or is it smarter to add your partner as an authorized user? Below, Select spoke to four financial experts who weighed in on if it's a good idea to share a credit card with your spouse.
It can be beneficial for a couple to share a credit card if one has a great credit history and the other has what they call a "thin file," Bryan Kuderna, a certified financial planner with the Kuderna Financial Team, tells Select.
A "thin file" simply means that you don't have a good credit score because you don't have much credit history. You don't have bad financial habits, per se, but you're penalized because you haven't had the opportunity to build credit yet, Kuderna says.
Sharing a credit card can help the partner with the lower credit score start to build their credit and raise their score.
There are two options for sharing a card, Kuderna explains. You can open a joint card or have the spouse with the lower credit score become an authorized user on the other's credit card. Just be aware that some cards charge a fee for authorized users.
The Platinum Card® from American Express, for example, charges $195 annually for each additional Platinum Card (see rates and fees) and $0 for additional American Express® Gold Cards. (See rates and fees.) Terms apply.
Credit cards that don't charge authorized user fees include: Chase Sapphire Preferred® Card, Capital One Venture Rewards Credit Card (see rates and fees), Bank of America® Customized Cash Rewards credit card and Citi Double Cash® Card. (see rates and fees.)
Even if you decide to share a card with your partner, it's important to still hang onto your individual cards, especially those you've had for a while, Kuderna says. Closing your oldest credit card can negatively impact your credit score.
He also recommends that his clients consider co-mingling their finances including opening joint savings and checking accounts, while keeping their credit cards separate. Sharing a bank account is a good way to hold one another accountable for all your expenditures, he says. Being transparent is important to have a happy marriage.
Sharing a credit card with your spouse can, in many cases, streamline the budget process in your household, says Erin Lowry, founder of Broke Millennial. But she argues it's important to know how much each person is charging on the credit card, especially if the card has a lower credit limit.
"If both of you are charging purchases it could potentially drive up your utilization, and therefore impact your credit scores," Lowry says. "If you have a $3,000 limit and you each spent $1,000 on it in a month, that's too high a utilization ratio since the optimal is using no more than 30% of the available credit limit."
For those opening a credit card solely to maximize the rewards or travel points they could earn, Lowry says that it doesn't usually make sense to add a partner as an authorized user. "Instead, it would be better to stagger opening your own cards to take advantage of sign-up bonuses," she says.
When it comes to sharing a credit card with your spouse, opening a joint card has more drawbacks than benefits, argues Wilson Muscadin, financial coach and founder at The Money Speakeasy, a personal finance blog for young professionals. The better option is to set them up as an authorized user.
For one, card issuers consider the lowest credit score when looking at a joint application, which can result in higher interest rates and lower credit limits.
Also, sharing a card gets murky if you end up getting separated or divorced, Muscadin says. Both people on the joint account are fully legally responsible for the remaining balance on the account if it were closed. "From the card issuer's perspective, they're not concerned about a divorce or a separation issue — both parties are fully responsible for whatever happened on that account. The original contract from that account stands," he says.
"The only way to get yourself off of that account is to fully pay the balance, or do a balance transfer, and then close the account," Muscadin says. "The account can't be disjointed once it's set up as a joint account."
If you want to share a card with your partner, Muscadin recommends going the authorized user route — in part because you can remove the extra name from the account at any time.
But choosing to add a partner as an authorized users is still a big decision. That cardholder is legally responsible for any debt, and it's their credit score that's dinged if there's a missed payment.
But before you open a joint credit card, Malani says it is really important to know your partner's money habits. You also want to know if your partner is charging their work or business expenses onto the credit card.
"You should resolve that before you begin sharing a credit card with your significant other," Malani says. "Because then it gets very, very confusing: 'Is this a bill we can pay off at the end of the month? Is some of this getting reimbursed through your company? Speaking of reimbursement, did you put your expenses through this week?'" You don't want to be nagging each other.
Malani also recommends outlining how much you and your partner spend together in various categories (such as gas and groceries) in order to choose the credit card that gets you the most bang for your buck.
When it comes to paying the credit card's annual fee, teaming up with a partner might make good financial sense. Rather than paying two annual fees, you'll be paying an annual fee plus an authorized user fee, which ends up costing less.
"For example, the Chase Sapphire Reserve® has a $450 annual fee, but to add an authorized user, it's $75," says Malani. "So instead of both of you paying $450 for an annual fee, you're paying $525 [together]." (Update: The Chase Sapphire Reserve has a $550 annual fee as of January 12, 2020)
It's also essential to have a conversation about how much you can charge on the shared credit card in order to be able to pay it off at the end of the month. Malani suggests keeping the credit card's app on your phone in order to easily track each other. "If you're getting close to the end of the month, and you're right at that max number that you come up with, you're going to want to 'Netflix and chill,'" she says.
Malani encourages sharing a credit card with your partner, but says only if it is a serious relationship should you begin merging and sharing finances. But having one credit card and putting the majority of your purchases on it can really go a long way in simplifying how you track things, she says.
For rates and fees of the Platinum card from Amex, click here.
For rates and fees of the Amex Gold card, Click here.
Information about the Bank of America® Customized Cash Rewards credit card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
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