Should one spouse take on full debt load?

By Sally Herigstad

To Her Credit

Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also writes regularly for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Steward Radio and other programs. See her website SallyHerigstad.com for more personal finance tips and free budgeting worksheets. Ask Sally a question, or read her previous answers in the To Her Credit archive

Dear To Her Credit,
My husband and I are both named on a credit card. I would like to transfer the balance to a lower interest card and cancel the old card. My credit is in excellent shape, but his credit is not. Can I open the new card and transfer the balance solely in my name?   -- Karen

Dear Karen,
Sure, you can open a new account, and as long as the bank approves you for the new card, it can be in your name only.

Whether you can take over joint debt and whether you should are two separate issues, however. It sounds like a great idea to  transfer a balance to a lower interest account and save lots of money in interest expense every month -- and it may be. But before you make that decision, answer these questions:

1. Are you OK with converting a joint debt into one only you are probably liable for? With your credit scores so far apart, either you're newlyweds or you've been keeping your finances separate to some degree. Now you're moving this debt over to your side, which may not matter to you -- or it may.

People can have bad credit histories due to circumstances beyond their control. Often, though, it's a combination of bad luck, lack of organization or planning, or overspending. Good credit histories, on the other hand, never happen by chance. To earn an excellent credit history like yours, you must do the opposite: Plan ahead, work hard and probably spend less than you make.

Now, you swoop in and take over the debt. You may still think of it as a joint debt, but it could feel like you rescued him. Only you know how the two of you stand, but I'd urge you to proceed with caution.

If you live in a community property state, you may both be liable for the debt anyway. In that case, it doesn't matter as much.

If the debt belonged to just your husband before you were married, I would not transfer it to an account just in my name. It just doesn't feel right.

2. What are the transfer fees and is promotional period long enough to pay off the debt? Can you pay off the balance before the introductory rate rises? CreditCards.com's balance transfer calculator can help you decide.

3. Do you have a pay-off plan? Are you and your husband  using a step-by-step plan to pay off the balance as soon as possible? Or is there a possibility the balance on the old card be run up again? The worst scenario would be to end up with two cards and two balances.

If you decide to transfer your joint debt to a new, lower interest card, make sure you stay in your bank's good graces so it never has a reason to raise your rate before you pay it off. The easiest way I've found to avoid any slip-ups is to have a small, automatic payment sent every month that covers the minimum. You'll want to pay more than that, of course, but this keeps you covered so you never have to worry about lost mail or late payments.

It's great that you and your husband and trying to find a way to start paying down your debt more quickly. Whether you transfer your debt or pay it off where it is, getting rid of consumer debt is always a great idea. Good luck, and take care of your credit!

See related: Paying off joint debt brought into a marriage

Gary Foreman, "New Frugal You"

Sally Herigstad, "To Her Credit"

Cathleen McCarthy, "Cashing In"

Jane McNamara, "Let's Talk Credit"

Elaine Pofeldt, "Your Business Credit"

Erica Sandberg, "Opening Credits"

Published: May 18, 2012

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