Learn how to manage a joint credit card account with another person.
You can share a credit card with another person in two ways. You can either added the person as a joint account user or you can make the person an authorised user on the credit card. Whenever you make a personal joint account user on any account what you and the joint account is available for the debt. It is that if one person does not make the payment towards the credit card debt and other person also shares equal responsibility to make the payment. An authorised user is just a person who can use a credit card and is not legally responsible for making payments on the credit card.
You can get a joint credit card account with your spouse, partner or even a few children to simplify certain situations where yourself or have other person build up credit history. Says important that whenever you share a credit card that other person you lay down some ground rules about how expenses and payments are to be managed this especially true when you have a few children as an authorised user on your credit card. Before you a few points and steps that you can follow in order to manage the credit card joint leader of a person.
Decide Maximum Amount That Can Be Charged on the Credit Card
Since more than one person is going to be using a credit card it is helpful to qualify how much you want your credit card to be charged every month. Ideally the credit utilisation on each credit card should not be more than 30% of the total credit limit. This means that if you have a credit card with a limit of $1000 you should not be charging it for more than $300. In farming the core holder of the credit card of this will help you maintain the credit utilisation that you want.
Set the Threshold Limit Beyond Which The Person Needs to Take Your Approval To Charge the Credit Card
Since another person is going to be using your credit card is a good idea to set a limit of the expense that can be made on the credit card at one time. Set a threshold limit about which the person has to take approval from the primary credit cardholder before making a purchase. This will avoid unpleasant surprises when the Bill comes at the end of the month.
Make It a Point to Inform Each Other Whenever You Make a Charge on a Credit Card
You should also make the rules of informing each other whenever charges are made on the credit card. That way each of you stays aware of how much the credit card has been charged up in a particular month and can avoid the risk of maxing out your credit card.
Check the Existing Balance before You Make An Additional Transaction
You can make it compulsory for your child or your spouse to check the balance before and the charge the credit card to make sure that at no point you maxing out the credit card or going over the balance limits that has been pre-decided by you.
Decide Who Is Going to Pay the Bill on the Joint Credit Card
For two people who a joint account holder’s credit account it is a good idea to decide who is going to pay the credit card Bill. The two people may decide to share the Bill or split the bill according to the expense made by each other individually. Even when you and a few children as an authorised user even though they are not legally bound to pay the credit card Bill you may want to inculcates the habits of learning responsibility of credit by helping them pay for what they have purchased.
Get a Good Understanding of How a Joint Credit Card Account Works
It is important understand that whenever two people are joint account holders of the single credit card, the credit card account is reported on the credit history or both the people. Which means that the record of positive and repayment will benefit the credit score of both the people whereas any late payments or negative information that is reported to the credit bureau about the credit card account could affect the credit rating of both the people. Whenever there is a joint account both the parties are equally liable and responsible for the debt.
Make Sure That You Know and Understand the Person Who You Are Going to Share the Credit Card with
Before you make the decision of sharing your credit card with some one by making them a joint account user or authorized user you should know the kind of person you are sharing your account with. If the person you are planning to share your account with is close to you but has very different spending habits than yours then it may result in problems in personal relationship. If you are a conservative Spender and the person you share your credit card account with is a thrifty Spender, then most likely the arrangement of joint account is not going to work out.