The Pros and Cons of Joint Credit Cards

Joint credit cards allow two people to share the same account, although this option is available from only a few credit card issuers. Deciding whether a joint credit card is a good idea is a decision that you and the other person on the account need to make together.

There are several notable advantages and disadvantages to joint credit card accounts, which can vary based on the individuals involved, their lifestyles, and their financial attitudes. Joint credit cards are just one way people share their financial lives. For instance, it’s common for partners or spouses to take out a mortgage together, lasting up to 30 years. Many people also open joint bank accounts (whether checking, savings, or both), where all the money inside the account is shared.

While commingling financial responsibilities is common in close relationships, you may still be wondering if joint credit cards are a good idea. Though there is no definitive answer, it’s easy to see scenarios where having a joint credit card makes sense.

Two ways you can share a credit card

Before diving into the intricacies of joint credit cards and how they work, it’s important to understand the differences between shared credit cards and authorized user accounts. There are two main strategies individuals can use to share a credit card:

• Authorized user cards: Adding an authorized user to an existing credit card or becoming an authorized user on someone else’s account.
• Joint credit cards: Opening a joint account with a co-borrower.

Authorized user

When you add an authorized user to your account, you’re incorporating another person into an already active card account. Authorized users will receive their own credit card with their name on it, but their purchases and transactions will be charged to the primary cardholder’s account.

Additionally, authorized users don’t need to undergo a credit check to be added. The primary cardholder assumes all responsibility, so a hard inquiry on the authorized user’s credit report isn’t necessary.

Joint cardholder

With a joint credit card account, you apply together with another person, much like you would for a mortgage or a car loan as joint applicants. This process involves both of you undergoing a hard inquiry on your credit reports, with both of your financial situations being considered for approval.

Keep in mind that with joint credit cards, both individuals are legally responsible for repaying the borrowed amounts. Additionally, it’s more challenging to remove your name from a joint account compared to an authorized user account, as you will need to pay off the balance to close the account.

How joint credit cards impact your credit score

Both individuals sharing a joint credit account will have their credit scores affected by the card’s usage. The outcome of this arrangement can be positive or negative, depending on how the card is managed.

For instance, joint credit cardholders who use their cards responsibly, maintain a credit utilization rate below 30 percent of the available limit, and consistently pay their bills on time will build credit together. Conversely, cardholders who accumulate high levels of debt or miss payment deadlines can cause significant damage to both of their credit scores, which could take years to repair.

The key difference with joint credit cards is that one cardholder’s financial decisions can significantly impact the other person’s credit. If one cardholder is responsible for paying the bill and they miss a payment, both individuals will suffer the consequences. Similarly, if one partner makes excessive charges and racks up a substantial bill, both parties are equally responsible for paying off these balances, regardless of who incurred the charges.

Pros and cons of joint credit cards

While joint credit cards come with certain risks, these can be managed by joint owners who are aligned in their financial goals. Additionally, joint credit card accounts offer several benefits.

Pros

• Build credit together: Joint credit cards allow two people to build credit simultaneously. If one person has better credit, they could help the other qualify for a card with superior rewards or terms.
• Fewer bills to manage: Managing one credit card each month means only one bill to pay, simplifying finances for couples with shared expenses.
• Easier to track spending: Couples aiming for financial transparency and teamwork can use a joint credit card to monitor their spending together.

Cons

• Potential for conflict: Sharing a credit card can lead to issues if one person overspends, if the couple breaks up, or if other disagreements arise.
• Lower rewards potential: While a joint credit card allows for combined spending and rewards, having just one card limits the opportunity to earn multiple sign-up bonuses.
• Shared legal responsibility: Both parties are legally responsible for repaying balances on a shared account, which can be problematic if one person incurs a disproportionate amount of charges.

Authorized user vs. joint cardholder: Which is better?

It’s difficult to determine whether joint accounts or authorized user accounts are better for any specific individual, as it depends on personal circumstances and financial goals. However, there are distinct differences to consider between the two options. For instance, responsibility for repayment varies, and joint credit cards can have a more significant impact on your credit score compared to authorized user accounts.

Here’s a comparison to help you understand the main differences:

Despite these differences, there are similarities between joint accounts and authorized user accounts:

• Any rewards earned will pool in the same place.
• Having more people on a single account can help you accumulate rewards faster.
• Both types of accounts can help improve your credit scores, although the impact depends on whether the card issuer reports authorized user activity to the credit bureaus.

Which banks offer joint accounts?

If you’re interested in a joint credit card account, you’ll need to find a card issuer that provides this option. Unfortunately, joint credit cards can be somewhat difficult to come by.

The three main banks that offer joint accounts are Goldman Sachs, U.S. Bank, and PNC Bank.

Best credit cards for joint cardholders

Apple Card

• Earn 3% cash back on all purchases made with Apple Pay and your Apple Card at Apple and select merchants; 2% cash back on all other purchases made with Apple Pay and Apple Card; and 1% cash back on all other purchases.
• No annual or hidden fees.

The Apple Card* stands out by offering joint credit card accounts from the start. You can set up an Apple Family account, allowing primary cardholders to earn rewards and track spending across authorized user accounts for family members.

Rewards can be redeemed for purchases via Apple Pay, transferred to a bank account, or sent to friends through Messages. Note that an Apple device is required to use this joint credit card.

U.S. Bank Cash+® Visa Signature® Card

• Earn 5% cash back each quarter on up to $2,000 in purchases in two categories of your choice; 2% cash back on one selected category (such as gas stations, EV charging stations, grocery stores, or restaurants); and 1% cash back on all other qualifying purchases.
• Receive a $200 bonus cash back after making $1,000 in eligible purchases within the first 120 days of account opening.
• No annual fee.

With the U.S. Bank Cash+® Visa Signature® Card*, you and your joint cardholder can maximize cash back rewards by rotating categories each quarter based on your spending patterns. You can also select one permanent cash back category.

To add a joint cardholder, call the number on the back of your credit card or 1-800-285-8585. U.S. Bank allows joint account holders on all cards except College Cards.

PNC Cash Rewards Visa Credit Card

• Earn 4% cash back on gas station purchases, 3% on dining, and 2% at grocery stores (on up to $8,000 in combined purchases per year in these categories); and 1% on all other purchases.
• Receive a $200 bonus cash back after making $1,000 in purchases within the first 3 billing cycles of account opening.
• No annual fee.

The PNC Cash Rewards Visa Credit Card* provides cash back across a variety of categories, making it a great choice for you and your co-applicant. Use your rewards towards shared goals or divide them for individual use.

How to choose the best joint credit card

Choosing the right joint credit card depends on the needs of both you and your co-applicant. Clear communication is crucial since both parties will share responsibility for the card. Here are some tips to guide you through the process:

• Check Both Credit Reports: Joint credit card applications often require good to excellent credit scores (typically between 670 and 850). If either you or your partner has a lower score, consider working to improve it before applying.
• Discuss Spending Needs: Talk with your partner about how you plan to use the card. If you have different preferences for rewards categories, it might be better to opt for individual cards or a card with rotating rewards categories.
• Plan for Payments: Agree on how you’ll manage and repay the card’s purchases. Will each of you pay off your own charges, or will you split the bill evenly? Alternatively, you might use the card only for joint expenses.
• Decide on Rewards: Determine whether you’ll pool rewards for shared expenses or distribute them based on individual earnings.
• Consider Authorized User Option: If one of you doesn’t qualify for the card, adding the second person as an authorized user could be a solution. Authorized users aren’t subject to a credit check.
• Have an Exit Plan: Understand the terms and conditions for closing a joint account, including whether one person can keep the account if needed. Have a plan in place for scenarios where the card or the relationship may not work out.

Alternatives to joint credit cards

If a joint credit card doesn’t seem like the right fit, there are alternative options to explore. For example, you might add someone as an authorized user on an existing credit card. This allows the authorized user to make purchases and potentially build credit, but the primary cardholder remains legally responsible for repayment.

Another option is for each person to open their own separate credit card accounts. While this means managing multiple credit card bills, it also allows each individual to control their own spending and rewards. This approach can also provide an opportunity to earn two sign-up bonuses, which might be combined depending on the card issuer. For instance, Chase allows customers to pool rewards with someone at the same address.

In Conclusion

While getting a joint credit card might seem appealing, there’s a reason these accounts are becoming less popular. With your own credit card, you avoid the stress of managing someone else’s purchases and can earn your own sign-up bonuses and rewards based on your spending.

If your goal is to help someone build credit or earn rewards on their purchases, consider adding them as an authorized user to your account. This is also a practical option if you want a child or dependent to have access to your credit limit for emergencies.