The Pros and Cons of Joint Credit Cards

What is a joint credit card?

A joint credit card is one that’s held in the name of two people. Both of these people need to apply and be approved for the card, and they are jointly responsible for paying off any debts incurred.

Typically, individuals who hold a joint credit card each have a physical card linked to the one line of credit. They have equal access to funds, with the ability to spend money up to a limit set by the lender.

When you have a joint account, you share responsibility for any debts connected to that account, and in the consequences of being unable to repay that debt, which can include a bad credit report.

Joint credit card vs additional cardholder

A joint credit card is different to a credit card that has a nominated additional cardholder (or cardholders). Additional cardholders also receive a physical credit card and are able to use it with few or no restrictions. But they do not typically carry any liability for the debt of the card. The primary cardholder is responsible for paying the debt (including any spending made by the additional cardholder).

How do you apply for a joint credit card?

The process of applying for a joint credit card is similar to the process of applying as an individual, except for the fact that two people are applying. Both applicants need to be at least 18 years or older and be NZ citizens or permanent residents.

It’s often possible to apply online, or you can call the lender or visit a branch, if the lender has one. Bear in mind that some lenders require you to visit a physical branch if you want to open a joint credit card.

Generally speaking, when applying for a credit card, the lender will ask to see supporting materials such as proof of income (typically in the form of pay slips) and a breakdown of your regular expenses, as well as any assets and liabilities you might have. When applying for a joint credit card, the income, expenses and assets of both applicants are considered.

When you apply, it’s likely that a lender will also consider your credit score, a number that is meant to represent your record as a borrower. When you apply for a joint credit card, the lender will consider the credit scores of both applicants.

→Related article: How to Fix a Bad Credit Score

Can you get a joint credit card in New Zealand?

Not all credit card providers issue joint cards, so if you want to share a credit card with another person, you may need to consider other options. For example, adding an additional cardholder.

But, whatever you decide, make sure you explore what’s happening in the market first. Research the rates, fees and features attached to the available cards. And, think about how you and your partner spend money and repay debt. It’s well known that finances can cause tension in relationships. So, make life a bit easier on yourself by having some of the difficult conversations up-front. Set aside some time with your partner to weigh up the available credit card options to help choose an option that works for you both.

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What are the pros of a joint credit card?

Some potential advantages of a joint credit card include the possibility to save on fees, and holding each other accountable for spending.

Potential to save on fees

If you and your partner each have a credit card, then it’s likely that you’ll each pay costs, such as annual fees and other charges. One advantage of a joint credit card is the ability to pay one set of fees, cutting down on cumulative costs.

Potential to hold each other accountable

Depending on what you use your credit card to pay for, if you and your partner are on the same page about finances – or are trying to be – then a joint credit card can be a way to hold each other financially accountable.

What are the cons of a joint credit card?

Potential things to be wary of when considering a joint credit card include the smaller range of options available to you, the potential for disagreements about money and the potential for you or your partner to negatively impact each other’s credit score.

A smaller range of options

If you wish to take out a joint credit card, you may find your options to be relatively limited, as not all providers offer them. This means that, when comparing joint credit cards, you could find that you’re missing out on certain features – such as a more favourable purchase rate or interest-free period – if these things are not available on a joint credit card from your chosen provider.

Potential for disagreements about money

There’s always the risk that the “what’s yours is mine” attitude can be unhelpful for couples when one, or both partners, are not prepared to be accountable for their spending.

If you and your partner have different attitudes to spending, then it may lead to disagreements, especially if one partner feels resentful at having to pay off debt accrued by the other. Similarly, you may not feel comfortable with your partner having access to a record of your spending, in which case, separate credit cards may be a preferable option.

Possible negative aspect on credit score

If your credit history shows things such as late or missed credit card payments, then your credit score could be negatively affected. If you share a card with your partner and you overspend, or you end up in a situation where you are faced with a large amount of debt in your name because of your partner’s spending, your credit score will take a hit.

This can have various repercussions. For example, if your credit score is low, you may find that a potential home loan lender will loan you less money, or that you are charged a higher interest rate than you would if your score were higher. While it’s possible to improve your credit score, it’s worth being wary of these things and considering your and your partner’s ability to manage money before applying for a joint credit card.

→Related article: Credit Card Debt: What is it and How Does it Work?

What are some alternatives to a joint credit card?

If you and your partner wish to combine your finances but do not want to have a joint credit card, a joint transaction account may be a possible alternative. This could have several of the advantages mentioned above – such as the ability to save on fees, manage spending and joint payments – and would allow you to spend your own money rather than take on debt.

Likewise, if you wish to use a credit card in one person’s name, some lenders give the option of a credit card account with a ‘primary’ and ‘secondary’ (or ‘additional’) cardholder. In this situation, the primary cardholder’s name is on the account, and they are the one responsible for repaying any debts. The secondary cardholder is merely a person authorised to use the account, with no liability in their name. It’s worth noting, however, that in this situation, the primary cardholder bears the risk, as they are responsible for any spending that the secondary cardholder does, and will be obliged to repay the debt.

When considering a joint credit card, it could be worthwhile having a discussion to find out whether you and your partner are on the same page about your finances and spending habits, whether you feel you can comfortably manage a joint card together, and whether you are prepared to be liable for each other’s debts.

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About the reviewer of this page

This report was reviewed by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.