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Should You Combine Credit With Your Partner?

Shared credit can make your financial lives a lot simpler — or cause complications you hadn't considered. Here's how to decide.
March 28, 2019
Credit Score, Personal Finance
Combining Credit With Your Partner: The Good, the Bad and the Ugly
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You share everything with your partner — rent, dog, toothbrush — and you figure that sharing credit will come just as naturally. But both of you could end up with damaged credit if you don’t clearly communicate about your spending habits.

Before deciding whether to merge your accounts, sit down with your partner and discuss the advantages and disadvantages.

The perks of shared credit

Whether you share credit as joint cardholders or one of you is an authorized user on the other’s account, tackling finances as a team could help you save money and earn more rewards. Here are three things that could work in your favor:

1. You could help your partner build his or her credit score. If your significant other has a limited credit history, adding him or her as an authorized user or joint cardholder could benefit you both. Your darling can piggyback on your good credit to get access to better rates, and down the road, he or she may be able to qualify for better terms independently. To build credit as an authorized user, make sure your issuer reports authorized user activity to the credit bureaus.

2. You could spend strategically and save. If you and your partner list each other as authorized users on your cards, you can be twice as clever about your spending. When you both use your significant other’s gas rewards card at the pump and your 0% APR card when making big-ticket purchases, for instance, you could end up paying less interest and earning more rewards in the long run.

3. You could share bills more easily. Splitting a credit card bill is much easier than keeping track of whose turn it is to pay for groceries. Instead of divvying up everyday purchases in the checkout lane, just swipe your shared card and pay half the bill later.

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Pitfalls to be aware of

Everyone messes up. But when you’re sharing credit, a financial blunder can potentially hurt your relationship. Here are three things to watch out for:

1. Your partner could make a mistake. When you’re sharing credit, a missed payment or overspending could negatively affect both of your credit scores. Talk about your due dates and spending limits regularly to avoid these pitfalls.

2. You and your partner could break up. The contracts you sign when you take on debt together are binding, even if you’re going through a breakup or a divorce. If this happens and your ex is listed as an authorized user on your account, remove his or her name to protect your credit. Close any joint credit accounts you have, and refinance loans you took out as a couple so that only one person is responsible for paying off the balance.

3. Your partner could ruin your credit out of spite. File this under “unlikely but potentially disastrous.” If your S.O. is an authorized user and maxes out your card to hurt you, you’ll be the one saddled with debt and a ruined credit score.

The case for keeping things separate

Shared credit may be useful for some, but it also might make things more challenging for others. Here are three reasons why you might not want to merge accounts:

1. You and your partner have excellent credit independently. If you started sharing accounts in this case, it’s unlikely that either of your credit scores would go up. On top of that, a misunderstanding or mistake could jeopardize your current creditworthiness.

2. You use credit differently. It’s possible that you and your partner are happiest when you’re not trying to manage money together. If you like paying your balance in full and your sweetheart prefers to revolve debt, for example, merging your credit accounts may cause conflict.

3. You’re happy with how things are working now. If you’re managing your living expenses just fine without a shared credit card, there’s no need to complicate things. After all, keeping track of card activity is usually more straightforward when only one person is making purchases.

The easier it is to stay on top of your payments and keep your balances in check, the better chance you and your partner have of maintaining your credit and relationship in the future — and that’s a win-win.