Disputing, removing joint-account holder causes headaches

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The Credit Guy columnist Todd Ossenfort
Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly "The Credit Guy" column, answering reader questions about credit counseling and debt issues.

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Question for the CreditCards.com expert

Dear Credit Guy,
What is the best way of disputing when a credit card company claims the account is held as a "joint account" instead of an "individual account"? This creditor is not willing to remove an authorized user because the account is "joint." -- Chris

Answer for the CreditCards.com expert

Dear Chris,
The first thing you can do is ask the creditor to send you a copy of your original contract or try to dig up your own copy. This may prove to be a difficult and futile exercise, but I recommend you give it a try. If that doesn't work, next dispute the account with all three credit bureaus (Experian, Equifax, and TransUnion). The credit bureaus will then have 30 days to investigate and respond. If the creditor cannot prove to the bureau that the account is a joint credit card account -- rather than an individual account with an authorized user, as you say -- the bureau cannot report it as a joint account. Of course, if the credit bureau does receive adequate proof from the creditor that the account is joint, the account will remain listed as such.

Just for clarification: A joint credit card account is where both parties are responsible for payment on the account. Both parties must have signed an application for an account to be jointly held. An authorized user on an account can use the card freely but is not responsible for payment on the account. In this case, only one party would have signed the application for credit.

Unfortunately, the creditor may have it right: The account may indeed be joint, which means you would have no luck with your credit bureau dispute. If so, the only way to assure that you get what you want is to close the account immediately after transferring any balance that you may be carrying to a new credit card. Under most circumstances, a creditor is not going to allow a financially responsible person to be removed from an account. You know the old saying, "Two are better than one"? From a creditor's perspective, that definitely applies for responsible parties on a credit account, especially in today's tougher economy. It's easier to collect debts if you can legally hold two people responsible for all of it, which jointly held credit cards allow.

Keep in mind the following things that may cause your credit score to dip temporarily if you decide to close the account:

  • If the account is among your oldest credit accounts.
  • If the card that you transfer the balance to has a lower credit limit than your previous account, causing your credit-available-to-credit-used ratio to rise.
  • If the account is your only open credit card account.

Should you try to get yourself removed from the account because you believe you should be listed an as authorized user, the fact that you are listed as a joint owner is partly in your favor. The upside is that as an owner, you can close the account and assure that no additional charges are incurred. However, the downside is that if the other person on the "joint" account is not paying, you could end up being responsible for all the charges on the account, which you may or may not have signed up for originally.

Whether you are the actual owner and want to remove someone you believe is an authorized user or are the reluctant "joint" owner who should be an authorized user, I recommend that you close the account. To protect your credit score, assure that any remaining balance on the account is transferred to an account in your name only or the other person's name only. Should the other person on the account be unwilling to transfer the balance if the account is not yours, you may have to make payments on the account and chalk it up to a hard-learned financial lesson.

Take care of your credit!

See related: Cardholders' mistakes can bring down authorized users' credit score, Authorized users aren't liable for card debt, Credit card authorized users, join account holders differ

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Updated: 03-24-2019