Joint credit cards are cards were there are two parties who are responsible for paying off a credit card. This is a relatively rare operation as even when there are joint transaction accounts or mortgages, many consumers who are married keep separate credit cards.
The way in which a joint credit card works is that the credit card is issued to both credit card holders and they are both liable for any debts that are built up on the card. The usual way in which the cards are made liable is under “joint and several liability”. Joint and several liability means that both the card holders are liable for the whole debt, so if one does not pay then the other holder is due to pay the whole debt, no matter which party built the debt up. Many people think that under a joint credit card then the credit card holders are only due for the debt that they incurred, or half of the total debt. This is not actually the case and they are due for the whole of the debt.
Many couples who are perfectly happy to have the same transaction account or the same mortgage account will often maintain separate credit card accounts. The main reason for this is that the credit cards can allow a person to bring up a significant amount of debt. While a mortgage is also debt, this is done before the loan is agreed to, rather than after as is the case with a credit card.
An alternative to joint credit cards are co signatory credit cards. These are credit cards that go under one name but are also backed by a second person, known as a co signatory. This co signatory has the right to see statements and has to agree to any rise in the credit limit on the card. These cards are often a useful way that parents of students can grant their children some independence while not having an inexperienced student drowning in debt. They can also be very popular with students who can “borrow” their parent’s credit card rating.
Another alternative is to have subsidiary cards. This is a card that is tied to another account, but often with its own credit limit. Unlike a joint credit card there are not two borrowers who are liable for this card, but a main card holder.
