By T.J. Porter, WCI Contributor
Getting married is an exciting and stressful time. It brings many big changes, including new ideas on how you and your new spouse will handle your finances. One common question for newly married couples is how to handle credit cards and whether they can merge their credit card accounts after they say I do.
Here's everything you need to know to make the best decisions for your credit cards with your new family.
When You Get Married, Is Your Credit Score Merged with Your Spouse’s?
When you get married, the credit bureaus don’t pay too much attention to that fact. The credit bureaus won’t include that information in your credit report, and you and your spouse will still have separate credit histories and credit scores.
That means that if one of you has terrible credit and the other has great credit, you won’t experience any individual change in your ability to get new loans. However, if you apply for a joint loan in the future—a mortgage, perhaps—both your scores will come into play.
You also won’t immediately become responsible for your spouse’s debts, so their debt won’t show up on your credit score. However, some states have community property laws that may cause you to become responsible for some of your spouse’s individual debt after a divorce.
Handling a Name Change
The one thing that will change on your credit report when you get married is your name. If you or your spouse change last names, it’s important to let your lenders and credit card issuers know. Those lenders will report that new name to the credit bureaus, and the credit bureaus will update the name on your credit report. Your credit history won’t change, so don’t expect to use marriage and a name change as a get-out-of-jail-free card if you have bad credit.
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Can You Combine Credit Cards When You Get Married?
Yes, it’s possible to combine credit cards when you get married. But it might not be the easiest process, and some card issuers may not even allow you to do so. Those that do may force you to open a new credit card if you want to be joint account holders.
Combining credit cards with your spouse typically means becoming joint account holders or co-signers on the same credit card account. In this scenario, both you and your spouse share full responsibility for the activity on the card. That means that when either of you uses the card, you both have the responsibility to repay the debt. If you don’t, it will damage both of your credit scores. It will also be much more complicated to close the account if you wind up getting a divorce.
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How to Handle Credit Cards After You Get Married
A much easier method is to set your spouse as an authorized user on your credit cards and have them set you as an authorized user on their cards.
Authorized users get a card of their own to use to make charges. However, they don’t take on the responsibility for paying the credit card’s balance. Adding an authorized user is typically easy, taking just a few minutes and making it a much simpler process than becoming joint account holders. The drawback is that one person remains the primary accountholder and gets the benefit of adding the card’s payment history and other details to their credit file. Some card issuers will report details on the authorized user’s report, but that isn’t true for all card issuers.
Keep Your Old Credit Cards
Even if you choose to open a new joint credit card, it’s important to keep your old individual cards open.
The reason for this is that older credit cards can give your credit score a big boost. Your credit utilization (your credit card debt divided by your total credit limit) is one of the most important aspects of your credit score. Having an older card with a high credit limit will make it easier to keep your score high by keeping credit utilization low.
The average age of your credit accounts also plays a role in determining your credit score. Closing old cards can lower your average account age, dropping your score.
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Chances are you don't have the same credit cards as your spouse. List all of the credit cards either of you have, decide which ones you want to keep long-term, add the other person to those, and close the rest. Be sure to not just evaluate the terms and fees of the card but also the length of that particular account. Closing all the old cards is a great way to tank your credit score right before you need to get a mortgage or refinance student loans! Keeping too many cards is a great way to start missing payments and end up paying interest—not to mention waste a lot of your time.
What Is the Best Way to Combine Bank Accounts After You Get Married?
Every couple is different, so there’s no single answer for the best way to combine bank accounts and credit cards after getting married. Which strategy you use will depend on your relationship and personal preferences.
On one end of the spectrum, you can fully combine bank accounts. Go to your bank and convert your individual accounts to joint accounts with your spouse as a joint account holder. Alternatively, you might open a new joint account, transfer both of your balances to the new account, and close your old individual ones. On the other end of the spectrum, you can keep your finances almost entirely separate, maintaining individual accounts and splitting household expenses and bills as you see fit.
Some couples will go for a combination of these strategies, having joint accounts while each retaining individual accounts. This lets you handle joint expenses together while still having some private funds. This is the strategy my spouse and I use. One benefit is that you can use personal funds to buy surprise gifts without your spouse noticing an unusual charge in a joint account.
Most experienced, wealthy couples will tell you that they fully combined their finances shortly after marriage. Instead of “his assets” and “her debt,” they can start working together on “our assets” and “our debt.” That's very powerful. Consider yourself warned if you decide to attempt to manage completely separate finances.
The Bottom Line
Getting married means a lot of changes in your life, many of them related to your finances. If you’re choosing to merge your finances, the easiest path forward is likely to add each other as authorized users on each other’s credit cards.
Regardless of how you choose to manage your money together, remember that it’s important to work together and talk about your financial habits and priorities to make sure you’re on the same page and to reduce miscommunications that could eventually lead to marital strife.
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