For most of my time as a personal finance enthusiast, I’ve been single. I had boyfriends, I went on dates, but I didn’t share my money with anyone else. I had only to worry about my own salary and expenses. This was the case when I met BF several years ago, and for the first years of our relationship it worked well for us to maintain completely separate finances. We would try to alternate who paid when we went to dinner. When we went on a trip we would keep rough track of spending and settle things up at the end through a bank transfer. We kept it simple, and it mostly worked.
When BF and I moved in together, keeping track of who paid for what and trying to keep things relatively equal became tedious. We were buying furniture, groceries and other household items together, in addition to our usual entertainment spending. We decided that a joint credit card would be a good way for us to share expenses easily and simply, and it has really worked well for us.
Why a joint credit card?
BF and I decided to get a joint credit card so that we could easily pay for shared expenses and ensure that we were paying equal amounts. We (ok this should say “I” – I think about these things and then discuss them with BF and he usually goes along with me when it comes to money) considered several options for sharing finances: a joint checking account, joint expense spreadsheets, etc. I have friends who have used each of these techniques and find them to be useful.
For us, a credit card made the most sense. BF and I share the opinion that credit cards are merely a way to pay for something that you have the money for (read: we pay the balance in full each month), so we weren’t worried about accumulating debt. Since I’m all about the credit card rewards points, we shopped around for a card that would give us a sign on bonus and rewards points for categories we often spend in (groceries, restaurants, travel). Since we travel internationally fairly regularly, it was also important to find a card with no foreign transaction fee and one that is widely accepted overseas, such as Visa or MasterCard. Finally, we needed a card with no fee, because I am not about to pay a bank for the pleasure of spending my own money.
We ended up with a Capital One Quicksilver Visa that checked all of the boxes we were looking for: sign on bonus, no foreign transaction fee, chip enabled for better security, no yearly fee and rewards in key categories. Since we don’t carry a balance, the interest rate was really not a concern.
The “joint” credit card is a thing of the past
One thing we learned early in the process of acquiring our joint credit card is that truly “joint” credit cards are becoming increasingly rare. I called a few companies to inquire about opening a new card under both my name and BF’s name, and was told that most companies do not issue joint credit cards anymore. This was surprising as I know that my parents have several joint credits cards, but I guess it is just one more change in the banking industry.
While we would have preferred to have both of our names on the credit card account, we decided to proceed with a credit card that is formally only in my name. I filled out an application and received a new account and credit limit based solely on my own credit history. I have a more extensive credit history, which is why we decided to open the card in my name, but we could just as easily have done it in BF’s name. We then added BF as an “authorized user” on the account, and he was issued a card in his name that ties directly to the account. This way, either one of us can charge something to our card, regardless of if we are together or not.
There is a potential danger to having this card in my name only with BF as an authorized user. If he wanted to, BF could go on a spending spree and charge it all to the joint card. He could then dump me and leave me to pay the balance. From the bank’s perspective, I would then be fully responsible for the charges, even if I didn’t personally incur them. I trust BF, so these things really don’t concern me, but they are important issues to think through before taking this approach.
The biggest challenge we encountered with the joint-but-not-really credit card was online banking. We wanted to each have access to the account online so that we could keep track of it and pay the monthly bill. Unfortunately, as an authorized user BF was not able to create his own online account. We resolved this issue by creating an account with login information that we share, so either one of us can log in to the same virtual account. We each added our bank account, and when the bill comes each month I pay half and BF pays half. No more worries about keeping things equal and it truly could not be simpler.
Rules of the game
We have developed a very simple system for using our joint credit card. When we are out to dinner, one of us will pay with the joint card. When we grocery shop (whether alone or together) we pay with the joint card. If we go to Target to buy cleaning supplies, we pay with the card. Then, at the end of the month, I get an email that the statement period has ended. I promptly pay half of the balance using my linked bank account and email BF to let him know to log in and pay the other half. Within the next few hours, he logs in and pays the other half using his linked bank account, and we’re done. Easy.
Part of the reason that this whole process is so easy is that BF and I are in agreement about what should and should not go on the joint credit card. If there is something in a gray area, like a new kitchen supply or décor item, we are both inclined to pay for it with our own credit card instead of the joint credit card. Essentially the only time the card is used by either of us individually is when I grocery shop without BF. Other than that, we use the card when we’re together and are in agreement that an expense belongs on the card. More than anything, we argue because one of us (ahem, BF) often tries to pay for meals out on an individual card instead of the joint card.
All that is to say that it is important to discuss what expenses should be put on a joint card in advance. If you or your partner has a habit of spending too much or buying unnecessary things, a joint credit card may not be the right approach.
Do you share finances with your partner? What systems do you use to do so?