Joint Credit Card: How (and Why) to Share a Card
Highlights from this article:
If you share a credit card account with another person, it's called a joint credit card.
Joint credit cards can help you earn rewards, save on fees and build credit scores.
It’s important to understand both the risks and benefits before sharing a credit card.
A joint credit card is more accurately referred to as a joint credit card account, although “joint” doesn’t mean “equal.”
Let's say you're the primary cardholder. You can choose to add an authorized or supplementary user to your credit card account — making it a joint account. You can add anyone, including a spouse, family member, caregiver or friend. The authorized user gets their own card with their name on it and can make their own purchases.
Purchases made by any authorized users are consolidated into a single monthly statement, with each user’s transactions clearly identified. All the rewards, including cash back or points, are pooled into the primary cardholder’s account.
There's often an annual fee to add additional users on a credit card but it's typically lower than it would be for a separate primary cardholder, and you may be able to share some benefits.
Advantages of having a joint credit card
Getting a joint credit card could be a good idea in certain situations, such as:
When parents want to introduce their kids to using credit responsibly.
If households have a caregiver who needs to make purchases.
When couples begin to manage their expenses together.
If families want to pool their rewards so they can redeem them for bigger perks.
As you can see, if you think carefully about your reasons for getting a joint credit card, adding an authorized user to your account could be a great option.
Disadvantages of having a joint credit card
Sharing a card can also have disadvantages in certain circumstances, because:
The primary cardholder is responsible for all charges made by every user.
Authorized users can’t redeem any rewards, no matter how many they’ve earned.
Being an authorized user on a joint credit card may not help your credit score if the card issuer doesn’t report your activity to the credit bureaus.
Authorized users may not get access to all the benefits offered with the credit card.
There’s nothing wrong with being an authorized user on a joint credit card. However, you likely don’t want it to be your only credit card. Getting your own credit card will allow you to build your credit score, which will be helpful if you ever need a loan in the future.
The best credit cards in Canada
Compare the best cards side-by-side to find one that meets your needs with special perks and benefits.
What's a credit card co-applicant?
An alternative to being an authorized user is being a co-signer or co-applicant. As a co-applicant, you’ll share more responsibility. Since the co-applicant is considered a joint borrower, both cardholders are responsible for the charges, regardless of actually makes the purcahse. Co-signers can both earn rewards, redeem rewards and build their credit scores.
Going the co-applicant route may sound like a great idea since the users would be on more even ground, but it does mean that you’re both telling the credit card company that you’ll pay for all the charges if the other person doesn’t. Failure to make payments could impact both of your credit scores, so it’s crucial that you both plan to uphold your agreements.
DIVE EVEN DEEPER
Georgia Rose