Spouse's Credit Card Debt Could Derail Marriage
By Erica Sandberg
September 28, 2012
Can my husband’s credit card debt (his name only) become my problem also?
You ask what every married person ought to ponder, so I’m really glad you wrote! Just where does the line between your personal credit and cash begin to blur and blend with your spouse’s?
To answer, it’s best to start with what happens when you’re a single adult. Typically, you get a job so you can pay your bills and have fun, and a credit card to help you buy the things you want and need.
Making sure that you pay everything on time and manage your credit so you don’t descend into unintended costly debt is all up to you. After all, the plastic is in your name. Unless someone else co-signed for the account, the bank issued it to you based on only your salary and credit information. It’s your responsibility to treat your card well, because, if you don’t pay as promised, the bank can come after you and demand the money or even sue you for a delinquent balance.
And then you fall in love and take a trip down the lawfully wedded aisle. After that, you’re officially a married couple, and in the eyes of the law you are entitled to certain legal and financial privileges that you didn’t enjoy before. For example, if your husband were to fall ill and die without a will, you’d receive automatic inheritance rights.
However, does this mean that, after saying “I do,” you also assume each other’s individually issued credit cards? Nope. Your husband doesn’t get rewarded instant access to your personal bank accounts, nor is he presented with a credit card of yours that sports his name. You can add him as an authorized user, but that’s your choice. Now, there might be some issues that emerge in a divorce situation, especially if you used each other’s accounts for household items (like if he were to pay for house paint with your card) or if you live in a community property state (a state with laws requiring that debt accumulated during a marriage be shared between the partners).
But let’s focus on what’s going on with your credit while you’re still together (because you will always remain married, right?).
As before, you continue to buy things with your individually issued credit cards, as well as with any jointly held cards. But because you are coexisting, you also are combining finances to a certain degree. Therefore, if he gets into crazy debt with his personal or a jointly held credit card, you may want to pay it off (or insist that he take that action) because carrying it is causing you to not achieve mutually agreed-upon goals. Perhaps you want to buy a new house and his poor credit score and huge balances are getting in the way of that dream. The problem may be one that he created, but now it’ yours too — even if you have no legal liability for it.
The moral here: you have to work together to prevent financial problems from happening. And if they emerge anyway? You also have to act as a unit to cure the troubles.
Unfortunately, money and credit — from the way you spend it to the amount of debt you can get into — are major factors in divorce. If you don’t deal with personal finance troubles both before and immediately after they occur, relationship discord is inevitable.
My advice is to be respectful and err on the side of transparency. Don’t micromanage each other, but do pull and share credit reports regularly, review banking statements together and talk often about spending and charging patterns.
Got a question for Erica? Send her an email.