Pros and cons of joint credit cards

What is a joint credit card?

A joint credit card is one that’s held in the name of two people. Both of these primary cardholders will need to apply and be approved, and they will be jointly responsible for paying off any debts incurred and any consequences of late repayment. Typically, individuals who hold a joint credit card will each have a physical card linked to the one line of credit. If you’re considering a joint credit card, though, it’s important to understand that they are a rarity in Australia.

Joint credit card vs additional cardholder

A joint credit card is different to a credit card that has a nominated additional cardholder (or cardholders). Additional cardholders also receive a physical credit card and are able to use it with few or no restrictions, but they don’t typically carry any liability for the debt on the card. The primary cardholder is responsible for paying the debt—including any spending made by the additional cardholder.

Generally speaking, an additional cardholder only has to provide personal details (i.e. name, date of birth and a copy of photo ID) during the application process, rather than their own financial details. Many credit card providers instead offer primary cardholders the ability to add an additional cardholder either for an additional fee or free of charge.

How do joint credit cards work?

Joint credit cards function in much the same way as regular credit cards as far as fees, interest and purchases are concerned. The main difference comes during the application process, where responsible lending laws require the credit card provider to consider both you and your joint applicant’s personal and financial details.

Can you get a joint credit card in Australia?

At the time of writing, the financial institutions that offer joint credit cards in Australia are:

• Australian Military Bank: The credit card application form, which can be found on its website, includes a section for a second applicant.
• Community First Bank: Its online credit card application includes a section for joint applicants.
• Heritage Bank: You may be able to apply by calling 13 14 22 or by visiting a branch, with both applicants needing to be present when applying.
• Hume Bank: You can apply through the Hume Bank website. The online application includes a question about whether you’re applying on your own or with someone else.
• People’s Choice Credit Union: When you apply through the People’s Choice Credit Union website, you can choose between an individual or joint credit card application.

It’s important to read any relevant product documentation, such as the Product Disclosure Statement (PDS), Target Market Determination (TMD) and Key Facts Sheet, for any credit card product you’re considering.

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How do you apply for a joint credit card?

The process of applying for a joint credit card is similar to the process of applying as an individual.  Both parties will need to be at least 18 years older and Australian citizens or permanent residents, and provide:

• Valid photo ID (e.g. a driver’s licence or passport).
• Proof of income (e.g. payslips).
• A breakdown of regular household expenses.
• A breakdown of both parties assets and liabilities (other debts).

When you apply for a joint credit card, the lender will likely consider the credit scores of both applicants. You can check your credit score for free with Canstar or via the Canstar App.

What are the pros of a joint credit card?

• Potential to save on fees by reducing the number of cards you have.
• Potential for you and your partner to hold each other accountable for spending.

What are the cons of a joint credit card?

• Limited range of options, meaning you may miss out on features such as a favourable purchase rate or interest-free period.
• Potential for disagreements about money, given that finance can be a source of tension for couples.
• Possible negative impact on your or your partner’s credit score if one of you misses or forgets a payment.

What are some alternatives to a joint credit card?

If you and your partner wish to combine finances but don’t want a joint credit card,  other options include:

• A joint transaction account, allowing you to spend your own money rather than take on credit card debt.
• A credit card with primary and secondary (or additional) cardholders, meaning only one of you is responsible for the debt.

Do you have to be married to apply for a joint credit card?

No, there are no restrictions on joint credit cards when it comes to martial status. As long as both parties consent to signing up for the joint credit card and meet the eligibility criteria, then you should be able to take out the card if you’re approved by the lender.

Who gets the rewards points and perks on a joint account credit card?

If you’re both considered primary cardholders, in theory, you both should be able to accumulate rewards points and redeem them together, although this would depend on if the rewards program linked to the card allows you to have an account in two people’s names. For example, the Qantas Frequent Flyer program only allows for individuals to hold accounts and does not offer joint or family accounts.

Do you need the consent of both cardholders when closing a joint credit card?

This will ultimately depend on the type of joint credit card you have. If you’re both considered primary cardholders, then you’ll generally need the consent of both cardholders to close the account. An exception to this is if one cardholder passes away.

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