How joint credit cards work

By   |   Verified by David Boyd   |   Updated 29th June 2021

Joint credit card

A true joint credit card is where two people are equally responsible and linked to one line of credit account. What this means is that either of you can make purchases on the card. But more importantly, each party is equally responsible for any balance due on the card and either person can make changes to the account. (Although there are a few instances, like closing the account, which need both cardholders to approve.) Remember, this is different from having an additional cardholder in your credit card application.

When considering your application, lenders will take into account both parties’ incomes and credit scores. And the details of your credit card account will appear on each of your credit reports. If you miss a payment and can’t pay off the balance, the lender can pursue both of you for payment. If one person on the account doesn’t use the card responsibly then both of your credit scores could be affected.

Because of this, joint credit cards should be considered a substantial commitment. You should only get one with someone whom you trust implicitly.

We take a look at the advantages and disadvantages of joint cards. And explore an alternative option that allows almost the same benefits as a joint card, without as much risk.

Compare credit cards from a range of banks.

What are the benefits of a joint credit card?

While a joint credit card is a big commitment there are some times when it might be the best option for your circumstances. Here are a few of the reasons it could work for you.

  • If one person in a couple doesn’t have a good credit score, but the other person’s score is high, then a joint application gives the person with the lower score a better chance of being approved (when compared with applying separately). If you don’t know your credit score you can get it for free here.
  • Someone with a lower credit score can access more favourable terms when partnering with someone with a very good score. This could be in the form of a better interest rate or a higher credit limit based on two incomes.
  • You’ll only have one annual fee to pay, instead of paying a fee for each if you get separate cards.
  • It can make it easier for couples to get an overall picture of their financial situation and stick to a joint budget – making it a way to simplify your finances and better manage joint payments from the one account.
  • You can earn rewards faster when two people spend on one account, which means flying Business Class on points sooner!
  • Both cardholders are able to redeem rewards.
  • For some people, it may help to reduce the temptation to spend too much, because there are no secrets between them and their partner.
  • You can work together towards a common goal.
  • For business owners with personal liability, a joint card can provide access to greater credit capacity on a personal credit card.

While all of these benefits can have you reaching for the pen and signing on the dotted line, it’s time to step on the brakes for just a moment. We take a look at why you should avoid having a joint credit card and what the risks are.

Disadvantages and risks of a joint credit card

And now comes the bad news – sorry it has to be done! Life isn’t always a bed or roses and it’s not uncommon for two people in a partnership to have very different attitudes towards money. So getting a joint credit card can end up being a disaster for both your relationship and your credit rating.

Here are some of the risks that you should be aware of.

  • A joint credit card means shared debt. You are both legally responsible for the full balance owing. So if the other cardholder goes on a spending spree, you run the risk of taking on a debt that you didn’t rack up.
  • Resentment can build up between one cardholder who is responsible and the other who splashes on the plastic a little too much.
  • You are more likely to go over your credit limit with two people using the card at the same time. You should ensure you are both tracking at least the account balance on a regular basis.
  • Any missed payments will affect both account holders’ credit scores, because you are both equally responsible for paying off the card balance, regardless of who incurred the charges.
  • Disagreements over the card can cause problems in a relationship. If both partners are not on the same page about how much to spend or who is making the payments, then tension and stress can arise. A spender combined with a saver can be a relationship disaster. A joint credit card only works when both parties are prepared to be responsible for each other's spending.
  • If your relationship with the person you have the joint card with changes, such as the case with a breakup or divorce, you will need to close the account or work out how to handle it. There is a risk one may use the card to hurt the other by spending more than they can afford. So if your ex isn’t paying the debt, you are still liable.
  • And for credit card rewards chasers, you could be missing out on the opportunity to get double the sign-up bonus points which you could get by both applying for your cards individually.

Will a joint credit card affect my credit score?

Yes, it can. For some, this could be a positive thing, for others it won’t be so good. So it depends whether you are starting with a lower score or if your score is excellent.

The first thing to mention is that you don’t ever have a joint credit score or a joint credit history. Each individual has their own credit score and a joint account is listed on each person’s individual credit file as a joint applicant and cardholder.

From the time when you first apply for a joint card, if you or your partner happen to have a really low credit score then your application could be declined. Since you and your partner are being assessed jointly, a bad score could outweigh an average or good one. When you are rejected for credit this will appear on your credit report and can reduce your score. Check out for free what your current score is before you apply. The moral of the story is, make sure you are both aware of your scores before you apply!

For those with a score on the lower side, a joint account can help to repair your credit score over time. If the account is kept in good standing and payments are made on time, your score can lift as time passes. So it can be a useful tool to establish creditworthiness for someone who needs it.

The actions you and your partner take with joint loans and credit cards may affect your score. Because you both share legal responsibility for the account if payments are missed by the due date, both scores could be affected.

Find out how you can improve your credit score quickly.

Joint credit cards for earning points

By now you might be weighing up whether a joint card is worth it. It can sound appealing to both earn points to help you reach your goals sooner. But there is an alternative option that could get you there just as fast.

The middle ground may be to apply for a rewards credit card or frequent flyer credit card on your own and add a supplementary or additional cardholder. There is sometimes an additional fee for doing this, but other cards come with free supplementary cards. With two people spending on the card you’ll double your rewards earning potential.

Most credit card issuers offer this option and it means you’ll become the primary account holder, and your partner will be a secondary cardholder. But you’ll be the only person responsible for managing the account and redeeming rewards. The authorised user has no liability for the debt owing on the card. But because the secondary cardholder is able to spend on the card, you need to make sure you are only giving a card to someone you trust completely.

But, as mentioned above, by applying for separate credit cards you can both individually take advantage of any sign-up bonuses on offer.

Should we apply for a joint credit card?

That’s something you’ll need to weigh up depending on how responsible you are with credit. There isn’t anything wrong with sharing a card with someone you trust. It can be a great way to boost your rewards points and have transparency in your financial life.

However, a joint credit card brings with it a number of risks in having two people being jointly liable for any debt. But if one of the joint applicants has a lower credit score or would find it hard to get credit on their own, it can be a worthwhile option where available.

So the middle ground of one person having their own card, with the other person as a supplementary cardholder, may be appealing. The main consideration is choosing a card that suits your financial needs.