Don't co-sign on that dotted line just yet!

By Lauren Wellbank
September 24, 2020
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Wedding Budget, Bride and Groom Figurines on Money
Credit: JGI/Jamie Grill

As you begin to plan your life together, you and your fiancé will start merging many of your previously separate things together: your homes, your possessions, and your finances. That latter point can be the most tricky. Some couples choose to keep their finances entirely separate, others choose to share one account while each maintaining their own, and others still decide to forge ahead with only shared accounts. While there's no one right answer—you'll need to have an open discussion about what will work for your relationship—you may be wondering about the merits of starting the transition to shared accounts early. That begs the question: Is it ever a bad idea to take out a joint credit card with someone before you two are legally married? According to Lauren Anastasio, a certified financial planner with SoFi, as long as your both on the same page there can be benefits.

What's Yours Is Mine

"Combining any assets, even sharing an apartment with someone before you're married, can have potential financial consequences," Anastasio explains. "However, when you're doing this with someone you plan to spend the rest of your life with, the benefits often outweigh the consequences but it's important to be aware of any potential financial risk." Joint credit cards will show up on each of your credit reports, so any activity your partner makes on them will show up for you as well. "This means, if you find that your partner is a little too carefree with his or her spending, you will be equally responsible for any debt accumulated."

Additionally, Anastasio advices, any delinquencies will show up on both of your credit reports, which can bring your individual credit score down. She recommends making sure to track your charges and stay organized to pay your balance on time.  

Have the "Money Talk"

"When you talk about money with a significant other—and I mean really talk about it—you end up discussing much more than just dollars and cents," she explains. "Having a meaningful discussion about money means sharing your biggest dreams and deepest fears, and that can be terrifying. But as you start to get serious with someone, talking about money isn't just a logistical reality, it's a critical next step." Anastasio says if you approach the conversation correctly, it may even bring the two of you closer as a couple, and lead to a better understanding of how the two of you can work together financially as a team to achieve your goals. However, the first step should be finding out and sharing your credit score, as well as everything you know about your credit history.

Talk About your Card 

For a joint credit card, Anastasio recommends deciding in advance what the card will be used to pay for, and how you'll each handle the payments. "For example, will the card be used exclusively for joint expenses or can you both use it for personal spending as well? When the bill comes, how will the balance be divvied up and who is responsible for making sure payments are sent on time?" Addressing these basic expectations at the outset will avoid potential headaches and arguments later down the line.

Benefits

There are benefits to having a joint card with your future spouse. It can be a good introduction to combing your finances, simplify how you manage your money, and give you both valuable insights as to how you'll work together in the future. Plus, it doesn't have to be a permanent decision. "If you find that your financial management style as a couple works best when your finances are separate, the card can always be canceled."

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