Pros and cons of joint credit cards

ALASDAIR DUNCAN
A joint credit card is a way that you can combine your finances with another person – your partner, perhaps, or a trusted family member. If you are on the same page in terms of your attitude to finance, then it can be a way to save on fees and charges, but if your goals and priorities are different, you may find that there are pitfalls.

If you’re curious about the potential advantages and disadvantages of joint credit cards, and whether one might be suitable for your particular needs and circumstances, we have answers to some of the questions you might have, including what a joint credit card is, how you apply for one and some things to be wary of.

What is a joint credit card?

A joint credit card is similar to a standard credit card, except for the fact that two parties will need to apply and be approved for it, both of their names will be on the account, and they will be jointly responsible for paying it off.

Typically, individuals who hold a joint credit card will each have a physical card linked to the one line of credit. They will have equal access to funds, with the ability to spend money up to a limit set by the lender.

Likewise, the account holders of a joint credit card will bear equal responsibility for the debt, and for making sure that the balance owing is paid by the due date. The consequences of any missed or late payments will affect both parties.

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 for a standard credit card, except for the fact that two people are applying. Both applicants will need to be at least 18 years or older and be Australian citizens or permanent residents. It may be possible to apply online, by calling the lender or visiting a branch, if they have one.

Generally speaking, when applying for a credit card, the lender will ask to see supporting materials such as proof of income (typically in the form of payslips) and a breakdown of any assets and liabilities you might have. When applying for a joint credit card, the income and assets of both applicants will be considered.

When you apply, it is likely that a lender will also consider your credit score, a number that is meant to represent your record as a borrower. When you apply for a joint credit card, the lender will likely consider the credit scores of both applicants.

What are the pros of a joint credit card?

Some potential advantages of a joint credit card include the possibility to save on fees, manage joint payments more easily, manage spending responsibly and have access to a higher limit. It is also possible for someone to improve their credit score with the use of a joint credit card.

Potential to save on fees

If you and your partner each have a credit card, then it is likely that you will each individually be paying costs such as annual fees and other charges. One advantage of a joint credit card is the ability to pay just one set of fees instead of multiple ones, cutting down on your cumulative costs.

Ability to streamline your finances

Couples can arrange everyday living expenses in different ways – for example, your internet account might be in one person’s name, and utilities such as gas and electricity in another, or these things might be under joint names. Whatever arrangement you happen to have, if you choose to pay your utility bills on a credit card rather than from a joint transaction account, then a single card could make it easier to manage and keep track of payments such as these, rather than splitting them across multiple accounts.

Potential to hold each other accountable

In addition to paying bills, it may well be that you and your partner use credit cards for groceries or even discretionary spending – a lunch or a coffee here and there, or the odd online shopping purchase. If you are looking to save money, a joint credit card may be one way for you and your partner to hold each other accountable and manage your spending, as both your purchases will appear on the bill.

Potential access to a higher limit

When you apply for a joint credit card, both your and your partner’s income and credit score will be taken into consideration. If both your and your partner’s incomes are high and you have a strong credit score, you may be approved for a higher limit than if you were to apply individually. It is worth noting, however, that if you have a high credit limit on the card, this could potentially impact future applications for further credit.

Potential to improve credit score

If one applicant has a credit score that is significantly lower than the other, then a joint credit card application can improve their chances of getting approved. Not only that, it is possible to improve your credit score by doing such things as keeping balances low and making regular repayments.

If you and your partner intend on applying for a home loan down the line, for example, and one of you has a low credit score, a joint credit card, managed responsibly, may be one way to demonstrate financial discipline and improve that low credit score.

What are the cons of a joint credit card?

Potential things to be wary of when considering a joint credit card include the smaller range of options available to you, the potential for disagreements about money and the potential to overspend, as well as the fact that you may end up taking on debt that is not yours and potential negative effects on your credit score.

A smaller range of options

If you wish to take out a joint credit card, you may find your options to be relatively limited, as not all providers offer them. In fact, none of Australia’s big four banks – ANZ, Commonwealth Bank, NAB and Westpac – currently offer one to customers.

This means that, when comparing joint credit cards, you could find that you’re missing out on certain features such as a more favourable purchase rate or interest-free period, if these things are not available on a joint credit card from your chosen provider.

Disagreements about money

According to Canstar’s Love and Money Report, finance can be a source of tension for couples. A survey of 1,049 Aussies found that nearly one in 10 people in a relationship recents their partner for not contributing more to joint finances, while 5% of all those surveyed have a secret credit card their partner does not know about, with younger people more likely to conceal this aspect of their finances.

If you and your partner are generally on the same page when it comes to money, and if you already combine your finances in the form of a shared mortgage or a joint bank account, you may find that a joint credit card is a convenient way to manage your combined spending.

However, if you and your partner have a different attitude to spending, then it may lead to disagreements, especially if one partner feels resentful at having to pay off debt accrued by the other. Similarly, you may not feel comfortable with your partner having access to a record of your spending, in which case, separate credit cards may be a preferable option.

Potential to overspend

A joint credit card may have a higher limit than a card in one person’s name, however, if two people are sharing a credit card and using it frequently, there is a possibility that you may inadvertently exceed your credit limit. If this happens, you may then be charged fees, as well as facing potential impacts to your credit score. It is therefore important to keep track of the balance of your joint credit card, if you have one.

Potential to take on your partner’s debt

If you have a joint credit card, then both cardholders will be responsible for paying it off and managing the debt. This means that, for example, if your partner uses your joint card irresponsibly, spending to excess and accumulating a significant amount of debt, the debt will be in both of your names, and you will face the consequences, including possible legal repercussions, if your lender is not paid back.

Negative impact on credit score

If your credit history shows things such as late or missed credit card payments, then your credit score will be negatively affected. If you share a card with your partner and you overspend, or you end up in a situation where you are faced with a large amount of debt in your name because of your partner’s spending, your credit score will take a hit.

This can have various repercussions. For example, if your credit score is low, you may find that a potential home loan lender is willing to loan you less money, or that you are charged a higher interest rate than you would if your score were higher. While it is possible to improve your credit score, it is worth being wary of these things and considering your and your partner’s ability to manage money before applying for a joint credit card.

What are some alternatives to a joint credit card?

If you and your partner wish to combine your finances but do not want to use a credit card for day to day spending, a joint transaction account may be a possible alternative. This could have several of the advantages mentioned above – such as the ability to save on fees, manage spending and joint payments – and would allow you to spend your own money rather than take on debt.

Likewise, if you wish to use a credit card but only have one person’s name, some lenders will give the option of a credit card account with a ‘primary’ and ‘secondary’ cardholder. In this situation, the primary cardholder’s name would be on the account, and they would be the one responsible for repaying any debts. The secondary cardholder would merely be a person authorised to use the account, with no liability in their name. It is worth noting, however, that in this situation, the primary cardholder bears the risk, as they are responsible for any spending that the secondary cardholder does, and will be obliged to repay this money.

However, some financial institutions offer the option to add an additional cardholder’s name and they are able to make payments, purchases, direct debits and authorised cash advances.

When considering a joint credit card, it could be worthwhile having a discussion to find out whether you and your partner are on the same page about finance and spending habits, whether you feel you can comfortably manage a joint card together, and whether you are prepared to be liable for debts in their name as well as your own.

Sub edited by Milan Cuk

Cover image source: George Rudy/Shutterstock.com


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This content was reviewed by Digital Editor Amanda Horswill and Finance and Lifestyle Editor Shay Waraker as part of our fact-checking process.


Alasdair has more than 15 years of experience as a journalist, and he specialises in property and lifestyle topics for Canstar. He has a Bachelor of Laws (Honours) from the University of Queensland and has lectured at QUT. His work has appeared in outlets including Pedestrian.TV, the ABC and Junkee.

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