I just got engaged, and my fiance and I are sitting down next week and going over all the merging-of-finances stuff. I’m hoping you could give us some tips about the credit card part. My fiance has the whole credit thing down. He’s got two cards and a good score (750). I, on the other hand, have never had a card (just student loans) and a pretty low score (600).
He says he’s fine with adding me to one of his cards — or opening a joint card with me. Can my bad score drag his down if we share a card? He wants to share a card for our joint household expenses, but part of me wants to get a card on my own until my credit is better. I don’t want to be dead weight. What do you recommend? – Brianne
Congratulations on your engagement! And, congratulations on being so concerned about protecting your fiance’s credit score; it shows that you’re a thoughtful and considerate person, which bodes well for your future life together.
Fortunately, you can put your mind at ease: Your current credit score and credit history won’t affect your fiance’s credit standing. In fact, if he adds you as an authorized user on his credit card, the positive credit history associated with that account will become part of your credit report. That will give an instant lift to your credit score, and it won’t affect his score one bit.
You won’t get quite the same boost to your score if you open a joint credit card together because the account will be brand new with no previous credit history attached to it. Over time, of course, the joint credit card will have a positive effect on your credit score, as long as you manage the credit account well — by paying bills on time and not carrying high credit card balances.
The question about whether to open a credit card together is really part of a much bigger issue you need to consider: How quickly do you want to move forward with merging your finances? What are the best ways to do it? And most importantly, how much space do you need to give each other?
Sharing a credit card is certainly convenient. However, it also sets the stage for potential conflicts. If you are added as a user on your fiance’s credit card, he will become ultimately responsible for all the charges you make to that credit card. Is he going to watch the charges you make like a hawk? You betcha! Are you going to like that? Not one bit!
Being joint cardholders is not much better, because now you’re both on the hook for the charges the other person makes on the credit card. That means you’ll both be watching the other’s charges.
Now, it sounds like your fiance has the right idea: It can make sense to share a credit card for joint expenses, such as household expenses. But you have the right idea too: Absolutely, yes, get a credit card of your own as well! Having your own credit card will enable you to develop your credit record independently, something many married women neglect, which unnecessarily limits their financial independence.
Fortunately for you, it doesn’t have to be an either-or situation — you can do both. In fact, one of the best steps you can take toward getting a credit card of your own is to become an authorized user on your fiance’s credit card. Then, after six months or so, go ahead and apply for a credit card of your own. By then, your credit score will have gone up because of the positive impact of your fiance’s credit history, and you will be more likely to get approved for a new credit card.
Finally, before you are added as a user on your fiance’s credit card, make sure you two set clear parameters. Here are some questions to discuss:
- How much can you spend each month on the card and on what?
- Who is responsible for which purchases?
- Who will pay the bill at the end of the month?
- How much will you each contribute?
Give yourselves lots of space, so you don’t have to agree on every little purchase. And be prepared that your idea of essential household needs may be different from your fiance’s. My husband, for example, is a gourmet cook, so his idea of essential food items includes imported sweet chestnut paste from France to the tune of $40 per can. If we were sharing all food expenses equally, would I be upset about that? Yes! But since he is paying with his own discretionary spending money, hey, I can enjoy those yummy chestnut paste desserts as much as the next person.
As you get to know each other and your spending habits, you can begin to set joint financial goals, such as saving to buy a house, and increase the areas where you share finances over time. But don’t try to agree on everything right up front. That takes time — and you have a whole lifetime to sort out the details.
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