One credit card account can have several different credit card holders, yet not all of them are created equal. While it is fairly easy to add additional authorized card holders, adding a joint account holder is another matter entirely. Like a primary account, joint account holders are fully responsible for the management and payment of a credit card account.
How A Joint Credit Card Account Works
When a credit card account holder adds an authorized user, that person can make new charges, but is otherwise not responsible for making payments. In contrast, a joint credit card account holder can be established on equal footing to the primary account holder. Unlike authorized users, joint account holders can report lost or stolen credit cards, request credit line increases, change the contact information for the account, or even close it all together. At the same time, any debts incurred by any one of the primary account holder, joint account holders, or authorized cardholders will become the responsibility of each of the joint account holders. Furthermore, the debts are not divided between joint account holders; each one is responsible for the repayment of the entire balance, even if the other fails to make payments.
The Advantages Of Adding A Joint Account Holder
A joint credit card account makes the most sense for individuals such as partners or married couples who otherwise manage their finances jointly. A credit card account configured in the manner can compliment other jointly managed accounts such as savings accounts, checking accounts, and retirement savings programs. In the event that a card is lost or stolen, either party to a joint credit card account may report the incident and request replacement cards.
The Disadvantages Of Becoming A Joint Account Holder
When adding a joint account holder, the most important issue to consider is the fact that either party may make charges that the other is held responsible for. This can create a huge problem in the event that a marriage or partnership dissolves, as one party may have to pay off the other’s debts or suffer the implications of default. Other difficulties with this arrangement are the obstacles presented by banks. Some card issuers will require the opening of a new account before they will allow a joint account holder to be added. Other banks will add joint account holders to existing accounts, but will require the submission of additional paperwork similar to what is submitted when opening a new account.
Opening a joint credit card account is serious financial decision only to be undertaken by the most committed couples. A jointly held credit card account offers a convenient and equal way for two people to manage their finances, but it is only for those who are willing to inextricably link themselves to each other’s potential debt.