A Motley Fool reader sent us the following question:
I had a credit card of my own (with a $500 limit) before I got married. Now I use my husband's credit card for our purchases. Do those payments count toward credit for me too if we were to separate? Should I simply get my name put on the account as a joint holder? -- J.H.
Well, J.H., you definitely need to establish and keep a credit rating of your own. But it's not as simple as having your name put on the account and engraved in that gold card.
Any resident of the known universe can be added to your husband's account as an "authorized user." Adding authorized users is a win-win for credit card companies. More users equals more charges, which equals more money for the credit card company. But your husband, as the main account holder, is solely responsible for paying off those charges. As the owner of the account, his is the only name that is reported to credit agencies. In other words, being an "authorized user" does diddly for your credit rating.
Being a joint holder is different, but it's not simple to become one. In an informal survey of some credit card companies we called, one of the three said it didn't allow joint accounts anymore. All it offered was authorized user status. The others would allow joint accounts, but required more paperwork (similar to opening a joint bank account) and even separate credit applications in some instances.
With a joint account, both you and yourhttp://www.fool.com/ccc/ccc.htm husband will be responsible for paying that bill. That's something to consider if you have any concerns about your financial compatibility. The future lasts a long time, and people change.
A "joint" credit card will affect the credit records of both spouses. Think about that. Is your hubby someone you want to have influencing your credit? (That's probably a question everyone should examine before the wedding.) Every couple needs to work out their own style of handling money. You can go for all joint accounts, totally separate accounts, or some blend.
About the only thing you don't want to do is have everything in one name. It's not just because of divorce. People die, become incapacitated, or go missing in the Nevada desert and come back ... well, just different. All of us need to have a personal history of financial responsibility, so that whatever life hands us, we can cope.
But you have a simple solution. You already have a credit card in your name. Use it! Even with a limit of only $500, you can use it to buy groceries and other small items. Just pay off your balances every month so you can show a history of timely payments. Once you establish that history, the credit card companies are usually very happy to increase your limit.
Finally, even if you both have spotless credit histories, you (like most newlyweds) will be under a fair amount of spending pressure as you set up your life together. You may want to review what can go wrong with credit cards to help stave off temptation. And for some guidance on handling your finances together, consider writing your own Financial Manifesto and check out The Motley Fool's Guide to Couples & Cash: How to Handle Money With Your Honey.