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Joint Credit Account, Cosigning or Authorized User?

When a couple gets married, there are some important decisions you’ll need to make about your finances.  After you have a discussion about your finances and spending, you’ll need to decide what to do with your existing outstanding loans and credit card accounts, as well as any new credit accounts that you open when you are married.

There are several options available, each with its own pros and cons. You may choose to deal with credit accounts differently—it’s really up to you and your spouse.

Joint credit account
With a joint account, both spouses are listed on the credit account equally. While both of you are able to use the credit line, both of you are also liable for the charges. This is good if both of you want to make sure you continue to have history of paying bills on time, but can be bad if one of you is less financially responsible than the other.

Loan cosigner
A cosigner is considered legally obligated to pay off the debt if the primary account holder does not pay it. Although the cosigner’s credit can be hurt if the account isn’t paid on time, the cosigner doesn’t have the legal authority to make changes to the account. Cosigning for a loan can have serious consequences for the cosigner, so this is a situation you should avoid unless you completely trust the primary account owner. For married couples, it’s probably best to have a joint account rather than have one spouse cosign on the other’s loan.

Authorized user
An authorized user is listed on the account, can use any amount of credit up to the credit limit, and may have the account show up on his or her credit report, but is not liable for making any of the payments. While many family members often add their children or spouses with limited credit history to their accounts, it’s important to note that the primary holder is ultimately responsible for paying the account.

Once you decide how want to deal with your credit accounts, keep in mind that you can always use a different method for new accounts, for example if you purchase a home together. Always make sure you and your spouse communicate about your outstanding credit, regardless of whose name it’s in.