Seven Cardinal Rules of Sharing a Credit Card

Before we dive in, let’s unpick the different ways you might “share” a credit card. There are salient differences between taking out a joint credit card and simply adding someone as an authorised user. Understanding the pros and cons might help you decide what's best for you.

With a joint credit card, both account holders are equally responsible for repaying any debts and charges incurred on the credit card. Upon application, both users must submit their personal and financial information, and both will be assessed individually by the bank and credit bureau to determine whether or not they are eligible. If one person is knocked back, the entire application will be denied. So it’s a good idea to check your credit standing before applying for any kind of credit product. 

Joint credit card products are actually quite rare in Australia. Only a handful of financial institutions offer them. A more common approach is adding an authorised user to an existing card.

If you want to reap the benefits of sharing a credit card – for example, only paying one set of annual fees and streamlining your shared finances with a partner – adding them as an authorised user to an existing card may be your best bet. Only one person needs to be assessed by the bank and credit bureau on application. Once you’ve been approved, you can add your partner as an authorised user. They will be issued with their own card with their name on it. 

An important distinction is that only the primary cardholder (the person who first took out the credit card) is responsible for repaying the card. You may have your own arrangement to split the bill at the end of the month, but if things go pear-shaped, it’s important to understand that the responsibility falls with the initial applicant.

In most cases, a credit card is shared between two partners, but you might consider adding your children to your account so they have access to funds in case of an emergency.

Know your responsibilities

Before you share a credit card with someone, it’s important to outline what you’re going to use the card for and how you’ll divide the costs. Many couples use shared credit cards to pay for groceries, petrol and other expenses they incur together. However, they make personal purchases with their own funds. Make this distinction upfront to avoid an awkward conversation down the track. 

Pay your bill on time

If you want to avoid paying interest on your credit card, you need to pay the balance by the due date on your bill. It’s a good idea to work out how much each cardholder will contribute towards the monthly bill as soon as it arrives so you can transfer the correct amount of funds into the account. 

Don’t get carried away

It’s SO easy to say, “just chuck it on the credit card,” but just because you have access to a few thousand dollars doesn’t mean you need to spend it. Don’t let the seductive glow of your max card limit trick you into overspending. 

Be aware of annual and ongoing fees

Annual fees can really sting. It’s a good idea to keep track of when those fees are coming up so you can budget for them accordingly. You may also need to pay an annual fee if you’re part of a rewards program. Chat with your partner about how you’ll split those fees in advance.

Keep an eye on the balance

With two people using the same card, you run the risk of racking up debt twice as fast. Make a habit of checking your balance regularly so you can avoid going over your budget. Apps and online banking make this super easy – most even send a notification to your phone when a purchase is made so you can stay on top of your spending.

Be prepared for total transparency

If you have a secret habit of buying a 12 pack of McNuggets on the way home from work every day, the person you’re sharing a credit card with is going to know about it. Your credit card statements will reveal all. If you’re not comfortable with your partner being privy to all of your spending habits, perhaps it’s best to keep things separate.

Have an exit plan

It’s not fun to think about, but if your relationship breaks down, it’s hard to make a clean break when you’re entangled in debt. With a joint credit card, you’ll both need to pay the balance in full in order to close the card. If you go down the authorised user route, the secondary cardholder can be removed at any time, however, they are under no legal obligation to pay any debt they incurred – that responsibility falls to the primary cardholder. So, you’ll simply have to trust that your ex will cough up whatever cash they owe.