Before You Consider Joint Credit

When people say, “I do,” they typically believe in the happily ever after. They go into marriage with love on their radar and the future in their sights. Many couples have the opinion that “what’s yours is mine and what’s mine is yours” when it comes to everything, including finances. While this attitude can be beneficial when starting a marriage off on the right foot and truly “becoming one” in all circumstances, it is important to take a step back and really consider the pros and cons before you consider joint credit.

Finances are one of the most common stressors of any marriage. Two people coming together with two separate ideas of how to save, how to spend, and what to spend money on often create a strain on the relationship. It is important to understand what a joint credit account is. A joint account is co-signed by both individuals so that both persons share an equal access to the account. There are benefits and disadvantages that you need to understand.

Pros:

• One account. Having just one account is much easier to keep track of than multiple accounts. Money going in and coming out of one account simplifies tracking cash flow.
• Lower bank fees. Many accounts require a fee on each account. By having just one account, you can keep your fees to a minimum. Also, if you are required to keep a minimum balance to avoid a monthly fee, a joint account can increase the cash in the account.
• Accountability. Knowing what your partner spends helps keep you both accountable for purchases. This can strengthen your relationship by viewing money as “our money” and working together to manage it.

Cons:

• Overdrafts. If one of the members of the joint account is not responsible for helping to keep money in the account or overspends, the overdraft and additional interest can cause a huge burden on the relationship and budget.
• Creditors and Debt collectors. If one partner finds him/herself in financial problems, your joint account could be sought out to repay debt. This affects both persons on the account.
• Separation and divorce. If “I do” becomes “Un-do” a joint account is difficult to manage. If your ex denies you access to the account and you are unable to pay bills, that can negatively impact your own personal credit score.

While getting married can be a huge blessing in your life, it is best not to go into it with blinders on. There can be serious ramifications to your financial future should things not go according to plan. Before you get married, it is vital that you talk through finances and whether opening a joint account is the best choice.