It's hard enough to make sound financial decisions when everything in your life is going well. Your divorce could complicate things further: by law, credit card issuers must account for your ability to repay, and your personal income plays a major role in their underwriting decision.
Despite your good credit score as a couple, you'll need to build a solid track record as a single woman who can manage credit cards and pay monthly bills on time. Before applying for new credit, tackle a few housekeeping tasks:
- Review the features and costs that work with your new budget. A high-flying rewards card with a high annual fee might not fit your new lifestyle. Think about leveraging cash back credit cards and other money-saving products to stretch your dollars.
- Consolidate wherever you can. Depending on your divorce decree or your personal agreements, you'll need to divvy up your debt. Because your husband carries the higher income, it may help you both for him to consider balance transfer offers that consolidate his share of your active debt to one or two accounts in his name.
- Convert joint accounts into individual accounts. Let's say you both share a rewards credit card and a no-frills card. You can each pick the one that fits best, and remove the other spouse from each account. Depending on your banks' policies, they may enable you to keep the same account or allow you to open a similar account as an individual.
You can shore up your credit score with a credit card for fair credit: a no-frills or few-frills account with a lower credit limit than you're probably used to. Don't worry about the dollar amount. You're banking on your current credit score to just get the account opened. Banks will give you more purchasing power over time as you build a strong track record.
You'll use your new card just once a month, for a small purchase that you should pay off in full when your statement comes. Some great cards for this task may include a secured credit card from Bank of America or Wells Fargo. It may seem odd to pay up to $40 per year for a credit card you won't use very often, but solid maintenance of this account can help keep your credit score high enough to qualify for discounts on car insurance premiums, home loans, and other household bills.