Joint credit cards may become a thing of the past
Written by Maryalene LaPonsie
Posted On: January 17, 2014
Ah, the married life. That (hopefully) happy state in which you and the one you love do everything together.
In the financial world, there are certainly plenty of ways you and your spouse can manage your money hand-in-hand. You can buy a house together, open a joint checking account together and even buy life insurance together.
With all that togetherness, you may be surprised to learn the one thing you might not be able to do to together is get a joint credit card.
A flurry of news reports have recently surfaced regarding a decision by Chase to discontinue offering joint credit cards. Given speculation that the change was prompted by a new federal rule, it makes you wonder if shared accounts are on the path to extinction.
Joint credit cards may be hard to come by
A Chase spokesperson has been quoted by multiple sources as saying the change is about simplifying the bank's products. Nessa Feddis, a senior vice president at American Bankers Association, told CNNMoney that the decision might also be due to an interest in avoiding scrutiny from regulators following a directive from the Consumer Financial Protection Bureau.
That rule says credit card issuers must use any third-party income an individual could be reasonably expected to have access to -- such as a spouse's income -- when determining whether to approve an application. The bureau issued the requirement in an effort to ensure stay-at-home spouses are still able to get credit cards.
With the CFPB already taking enforcement action against Chase for alleged illegal practices and demanding $309 million be returned to cardholders, the big bank may think it is simply easier to discontinue joint credit cards rather than risk the appearance of cajoling stay-at-home spouses into them.
Chase certainly wouldn't be the first to drop joint credit cards -- HSBC and Capital One both stopped offering them a while ago. Discover, Bank of America and Wells Fargo are among issuers still offering this option, at least for the time being.
Naming an authorized user instead
Even if other credit card issuers discontinue their joint cards, it doesn't necessarily mean you and your spouse need to run out and get your own cards. Instead, a spouse can be added as an authorized user to an existing account. Authorized users can use the card as if it were their own, and timely payments on the account can help boost their credit score, too.
There are two main differences between joint ownership and adding a spouse as an authorized user. The first is that only the owner is responsible for the debt. So if you and your significant other are splitsville, you can't legally expect your former spouse to help pay the bill if he or she were only an authorized user.
The second difference is account management. Since authorized users are not account owners, they can't dispute charges, ask billing questions or otherwise manage the account. That said, some banks do allow cardholders to confer management status to authorized users, which can allow them to effectively act like an owner.
So while Chase may be saying no to future joint credit cards, that doesn't mean you and your spouse have to have his-and-her accounts. The authorized user feature can let you share the best credit cards with the one you love. And isn't that what marriage is all about?