Sharing a credit card account strengthens bonds, but encourages snooping
A whopping 86 million adults in the U.S. have shared a credit card account with another person, with varying relationship results, according to a new CreditCards.com survey.
Sharing a credit card account by having a joint account or adding another person as an authorized user can strengthen a bond between two people. It can also, however, encourage the primary cardholder to snoop on the other person’s spending habits.
The national telephone survey of 1,522 adult cardholders showed about 17 million people, or 20 percent, have used online or printed account statements to check the spending of an authorized user or a joint account holder. Spying on spending was more likely among people who shared accounts with adult children and kids under 18.
Meanwhile, 17 percent said sharing a credit card account made them feel closer to the other person – proof that teaming up on finances can be a trust builder.
“If you share a credit card with someone you love and trust and you know has your back – and there’s enough money to pay the credit card – then I can understand why it would bring people closer,” said Maggie Baker, financial therapy specialist and author of the book “Crazy About Money.” “It’s kind of a symbol of, \u2018We’re together.’”
Here’s what the study found about sharing credit card accounts:
- Sharing with a significant other is most common. People are most likely to share credit card accounts with their spouses or partners. Forty-eight percent of cardholders said they have shared with a spouse or partner, compared to 10 percent who shared with adult children, 5 percent who shared with children under 18 and 4 percent who shared with anyone else.
- It’s a family affair. The people who shared with a spouse or partner were more likely to have shared with a child of any age than someone outside their immediate family. Conversely, those who shared with people outside their immediate family were less likely to have shared with a spouse or partner, and highly unlikely to have shared with a child.
- It can create tension between parents and children. Seven percent said they canceled a shared credit card account because it caused conflict in their relationship, and 12 percent said they argued with the other person because of a shared card. Both responses were more likely among parents who shared with kids.
- It can give you the upper hand. Ten percent said they felt more in control of a relationship from sharing a credit card account.
- Snooping and arguments over shared credit are both down since 2008, when we asked the same set of questions in a poll. Arguments over shared credit cards have decreased from 19 percent in 2008 to 12 percent now. Additionally, 12 percent said they used paper statements and 16 percent used online statements to check up on the other person’s spending in this year’s survey, compared to 20 percent (print) and 15 percent (online) in 2008.
The scientific survey of 2,000 consumers, including 1,522 cardholders, was conducted via landline and cellphone Oct. 20-23 and Nov. 3-6, 2016. See survey methodology.
For better or worse
Sharing a credit card account is an intimate situation, for better or for worse. Two people trust one another to spend responsibly, lest their future borrowing power suffer damage that’s hard to repair. Whether it’s a net positive or a negative depends entirely on the situation, the nature of the relationship and the people involved.
It’s no surprise that credit card sharing is most common in couples. After all, maintaining a budget is one of the key pillars of a functioning household. Money, however, is a common cause of relationship stress. A February 2015 survey by SunTrust found that among couples who said they have relationship stress, finances was the top reason.
Sharing a credit card can either be a bonding experience or a one-way ticket to couples’ counseling, depending on how the account is used and managed. Baker, a practicing psychologist who specializes in relationship and money behavior issues, noted that many couples include one “spender” and one “saver.” Card sharing can allow the thrifty partner to take charge of the couple’s finances – but that sense of control must be treated carefully. Constantly checking up on a spouse or partner’s spending can make the other person feel uncomfortable.
“It’s a good thing, except if the spender’ person doesn’t like it and feels controlled,” Baker said. “That’s going to create tension in the relationship.”
The key to preventing fights triggered by controlling behavior or runaway credit card spending is to communicate with one another upfront about how the account will be used. Baker said that when couples fail to talk to one another about spending, it tends to create resentment – and more debt.
If you share a credit card with someone you love and trust and you know has your back … then I can understand why it would bring people closer.
|\u2014 Maggie Baker|
Financial therapy specialist
“That can come out in their money behavior,” she said. “I don’t like it that my husband keeps checking on me, so I’ll give him something really big to check on.’ And then it just increases the spending.”
A healthy amount of transparency, however, can build trust that enhances the bond between spouses and partners, said psychotherapist Mary Pender Greene. “One of the major things couples struggle with is hiding things related to money – whether it’s hiding the money itself or hiding the expenses that a person might incur,” she said. “When a couple can share honestly about that, it strengthens the relationship.”
Teaching tool or tension trap?
In the CreditCards.com poll, relationship tension over card sharing was most common among parents and children. Not all kids have the discipline to spend wisely – particularly if they’re under 18 – but a credit card can be an effective tool to teach children how to manage a budget.
“One of the developmental steps for teenagers is to learn to experience the psychology of their own self-efficacy,” Baker said. “They are an independent agent, and they have to learn to manage their own affairs.”
As with couples, parents and children can argue over credit if they don’t communicate with one another about spending. Greene said effective credit card sharing is a matter of letting the child know what the limits are based on the family’s resources.
“As an adult, if you have a credit card, you know what your income is and what disposable income you have. But a child doesn’t have that,” Greene said. “You need to be clear with them about much is available for them per month.”
Baker advocates allowing teenagers to have their own credit cards that they can pay off with their own money – and perhaps with matching funds provided by the parent. This can instill a sense of independence and privacy.
“I think, especially with teenage kids, they need to learn how to handle their own money, but they don’t like somebody watching what they do,” she said.
What to know about sharing credit card accounts
Sharing a credit card account has implications beyond any impact to a personal relationship. Here are some important things to keep in mind before you open a joint account or add another person as an authorized user.
- Joint account holders are equally responsible for payments. According to Michaela Harper, director of community education at Credit Advisors Foundation, each person on a joint account is responsible for repaying the full balance – not just what that person charged to the account. “If you have a joint account, you have to be fully prepared to pay the balance should something happen to the other person,” Harper said. “As long as they have a card, and it’s within the limits, they can take a cash advance for the full amount and walk away.”
- Think twice before sharing with a nonfamily member. Harper strongly advises against sharing credit with a nonrelative – particularly a joint account. “I cannot think of a situation outside of a relative, domestic partner or spouse where you would want to have joint credit,” she said.
- Divorce decrees are not binding on creditors. If a married couple gets divorced and has credit card debt, the card issuer can pursue repayment from either party, no matter what the court says. “That is a very common situation we run into – where someone will say, Well, the judge said in a decree that she had to pay the Visa, or he had to pay the American Express,’” Harper said. “It doesn’t work that way. It’s totally up to the creditor from whom they choose to collect.”
- “Authorized user” is the way to go – especially with kids. An authorized user is not obligated to pay a credit card balance, but the primary cardholder can set limits. “If I were to have a child go off to college, and I added them as an authorized user on my account, I can put on any billing cycle a limit on the amount they can charge,” Harper said. “If it’s an authorized user and they abuse the card, I can call and say I want that card canceled.”
Sharing a credit card account can have its advantages and its pitfalls. Ideally, family relationships are better equipped to handle the potential hazards of shared credit – and they stand to benefit more when debt is used wisely.
CreditCards.com commissioned Princeton Survey Research Associates International to obtain telephone interviews with 2,000 adults living in the continental United States. Interviews were conducted by landline and cellphone in English and Spanish by Issues & Answers from Oct. 20-23 and Nov. 3-6, 2016. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error is plus or minus 2.7 percentage points.
See related: Think you’re a joint account holder? Think again, Co-signer, joint account holder, guarantor: know the differences, 2008 survey: Snooping, arguments go along with joint credit