1 in 3 couples say credit card debt played a role in their divorce, that is according to a recent survey of divorced couples. Additional findings from the survey include:
41% of Millennials cited credit card debt as significant in their divorce.
Men were more likely (40%) than women (31%) to divorce due to debt.
Women reported higher levels of financial liabilities after divorce, with 67% reporting significant debt, compared with 33% of men.
70% of divorcing couples admitted to concealing credit card debt.
Here’s a comprehensive guide on how to manage credit cards after marriage.
How To Start the Conversation About Credit Cards In Your Marriage
Combining existing credit card accounts can simplify your finances and help you track expenses.
The process of merging accounts varies from one credit card company to another and is up to the spouses. Moreover, spouses need to decide whether to add each other as authorized users or joint account users.
Read our previous post, What is a Money Date, for specific advice on how to manage the conversation.
How to Avoid Combining Credit Card Accounts in Marriage
While combining finances can strengthen a marriage, merging credit card accounts is only sometimes necessary or advisable. Here are just a few reasons why.
Past Credit History
Keeping accounts separate might be a good idea if one partner has significantly better credit. This approach can prevent your credit score from being negatively impacted by your spouse's past or future financial problems.
Attitudes Toward Debt
It is not uncommon for financial opposites to marry. One spouse could have a serious fear of debt, and the other might not respect the seriousness of credit card debt.
Complications from Previous Marriages
Second marriages can be complicated. Prior marriages might have created financial trauma or strong distrust centering around money or credit cards.
How to Combine Existing Credit Card Accounts in Marriage
Combining existing credit card accounts can simplify your finances and help in tracking expenses together.
The process of merging accounts varies from one credit card company to another and is up to the spouses. Moreover, how accounts are merged is up to spouses who need to decide whether to add each other as authorized users or joint account users.
How to Add Your Spouse as an Authorized User
An authorized user is a person the primary cardholder adds to a credit card account. Authorized users can be anyone who meets the card issuer's age requirements; for example, the primary cardholder may add a child, spouse, partner, or close friend as an authorized user.
Adding your spouse as an authorized user is a straightforward way to combine credit card usage without opening a new joint account. This method allows your spouse to make purchases and benefit from the credit line, but the primary responsibility for the account remains with the original owner.
Below is a screenshot of the process from a major credit card provider.
How to Add Your Spouse as a Joint Account User
Joint account holders are considered primary borrowers. When you apply for a credit card, you do not add a joint account holder like you would with an authorized user, but rather you add them as a co-borrower or cosigner.
However, most major credit card companies don't allow joint accounts. Changes in a couple's relationship, such as a divorce, can make things even more complicated. Closing the account may require consent from each joint account holder.
Creating a joint account user involves both partners having equal responsibility for managing the account and making payments. This arrangement requires a good level of trust and communication, as the actions of one person could impact both credit scores.
Below is a screenshot of the process from a major credit card provider.
Comparing Authorized Users and Joint Account Holders
The graphic below was created by Experian.
Learn More
To learn more, read our past post How to Handle Credit Cards During Marriage.
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