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 wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.
Dear To Her Credit,
My husband has two credit cards, with U.S. Bank and Alaska Airlines. I want him to remove me from those two cards so that I can apply on my own for a loan and can consolidate all my debts. Is that possible? Hope you can help me. — Kelsey
When married couples start removing each other from accounts and talking about “your debts” and “my debts,” it’s often a sign that they are planning to pursue separate lives. I hope that’s not the case for you, but if it is, I strongly urge you to close all joint accounts immediately. That means today. I get too many letters from people stuck with joint credit card debt. This problem is a lot easier to prevent than it is to fix later.
If you are only an authorized user on your husband’s cards, it’s easy to get off the accounts. You or your husband can call or write to the credit card company and ask them to remove your name. In most cases, it’s effective immediately or within 24 hours.
If you and your husband are joint account holders, regardless of who is the primary cardholder, it’s not so simple. With a joint account, the bank is relying on the earning power and good credit history of both of you to pay off the debt. They’re doubly protected because if one of you doesn’t pay, the other one is stuck with the whole bill. If you applied for the card together, as long as the account is open, you’ll both be liable for the balance. The best solution is to close the accounts.
If you are a joint holder, you have the right to close the account so no further charges can be made on it. If it has a balance, you and your husband can pay it off as quickly as possible or transfer the balance to other cards.
Scott Powers, a financial adviser in California, says, “As for debt consolidation, she can apply for a loan or credit under her own name using just her credit score and income.” In fact, if you have a better track record of paying your bills than your husband does, you may have an easier time getting credit without him than with him.
“In some cases, you can use household income (husband and wife) while keeping the application in one name, which is helpful if the applicant doesn’t have much in the way of personal income,” says Powers. “This is a trick I have had clients use pre-divorce. It really depends on what the application asks for, household income versus personal income.” A 2011 change in federal regulations requires card issuers to consider only individual income, not household income, in making lending decisions — but a CreditCards.com survey showed lenders vary widely in how they enforce the individual income mandate.
Before you try to get credit, take a look at your credit history. You can get a free, annual copy of your credit report at AnnualCreditReport.com. This is what a potential lender sees when the considering you for a loan. Your credit history is yours alone — there’s no such thing as joint credit history.
If you have significant debt and you’re not sure how to proceed, I recommend finding a nonprofit agency affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. They can look at your total financial picture, show you your options and help you make the best decisions on how to get rid of your debt and take better control of your financial life from now on.
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