Is it bad to rely on your partner's credit cards?

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consultantjournal
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Is it bad to rely on your partner's credit cards?

Postby consultantjournal » Sat Apr 21, 2007 4:13 pm

Let's say you're a professional in your 30s. You've got a great credit rating. You've had credit cards for 15 years and you have a line of credit in your own name -- but you haven't put much of anything on your own cards since getting married. You share a mortgage with your partner. You also share a big line of credit, which has a balance of zero. Your partner has a credit card with an excellent set up. You have a card linked to that account, but it is NOT a joint credit account. The two of you throw everything on that card, since it has such great rewards, you can qualify for the highest reward amount and it's easier to just pay one bill. At the last time of re-mortgaging, your mortgage broker said the two of you have credit rating that would cause banks to fight over you (and this was true). Is there anything wrong with only ever using your partner's credit card? Note that you've still got your own credit card and LOC and that you're joint on an LOC and a mortgage. Is this bad for your credit?
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lostmind
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Postby lostmind » Sun Apr 22, 2007 11:22 am

I am watching this thread as my wife and I do the exact same thing.

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Postby JPeteQ » Sun Apr 22, 2007 12:35 pm

The only way I think this could hurt you is if your other card drops you for inactivity. It might be a good idea to make a small purchase every two or three months on your own card just to keep your bank from dropping you.

If you don't use your own credit card at all, even if your bank doesn't drop you, your credit report will eventually show no activity and anyone who pulls your credit won't be able to see your payment habits (if you're always on time etc.) That might hurt you eventually but it probably wouldn't be a huge drop. Plus you have the mortgage that shows up on your credit report as well as your partners, yes? So that could mitigate that circomstance.

Other than that, more power to you!!

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Postby consultantjournal » Sun Apr 22, 2007 1:53 pm

Hmmm...so if the card is just used occasionally, all would be good? That's what I would think, too. Anyone else?
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Postby nickel » Mon Apr 23, 2007 5:56 am

To be honest, I'm not sure about the distinction of joint account vs. linked card. If both of your names are associated with the account, then I would imagine that the card activity/history will report for both of you. Have you checked your credit reports to see if the card in question is listed for both of you?

We have two main cards. The first one I applied for in my name and ade my wife and authorized user with her own card. Later, we decided to add a card and we intentionally applied for it in my wife's name with me as an authorized user with my own card. As far as I can tell, both of them look the same on our credit reports. Not sure if they factor into our scores differently -- they've both been paid on time all the time, and our credit scores are nearly identical so it's difficult to say.

consultantjournal
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Postby consultantjournal » Mon Apr 23, 2007 12:27 pm

From what I understand, an authorized user gains no credit rating. However, I understand that some women have fought for recognition of their years as an authorized user on their husband's accounts. But that's case-by-case.

I will check our credit ratings to see what's going on. But I am pretty sure that, last time, the authorized user did not show up on the credit reports.
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Postby nickel » Mon Apr 23, 2007 1:04 pm

consultantjournal wrote:From what I understand, an authorized user gains no credit rating. However, I understand that some women have fought for recognition of their years as an authorized user on their husband's accounts. But that's case-by-case.

I will check our credit ratings to see what's going on. But I am pretty sure that, last time, the authorized user did not show up on the credit reports.


All I know is that the cards on which my wife and I are 'authorized users' (with our own cards) show up on both of our reports. As for how that is or isn't incorporated into our FICO scores, who knows? It's not like they publicize the equation.

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Postby consultantjournal » Mon Apr 23, 2007 6:31 pm

I just did a search. You guys are right -- at least that's how it works in the US. I should pull our reports to see whose credit is showing up where.
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Cap
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Postby Cap » Tue Apr 24, 2007 9:56 am

in the US, most authorizer users will have the card they're authorized to used show up on their report. it's sort of depends on the card issuer too. some reports, some don't. there is a list somewhere on the web but unfortunately I can't seem to find it. you generally can contact the issuer and ask if they report, and if not, will they be able to.

I wouldn't worry about charging a monthly amount to the inactive cards too much, just enough making some purchases every 6 month or so to keep the account open should be good enough. when reports are gathered from the reporting agencies, your card activity generally just shows a No Data/OK/On Time note for a specific month, regardless if you have actually made a purchase or not.

only when you have missed a payment over 30 days, 60 days, or 90 days will it be specified on that specific month. so otherwise, it's just an ok/on-time deal.

If you don't have any negatives from the past (late payment, collection etc.), I am fairly certain your credit is fairly high in terms of score and credit worthiness. your balances for your revolving accounts are low (or zero) and you seem to have a diverse mix of credit types (installment from the mortgage, the line of credit). I wouldn't be surprise if your credit is slightly better than hubby's due to the fact that both of you make purchases on his account! (thereby increasing month-to-month credit availability ratio)

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Postby consultantjournal » Tue Apr 24, 2007 9:35 pm

Or on my account, as the case may be. :)

But why would the authorized user have better credit? Isn't it better to show a balance, which indicates ability to manage credit, than to have zero?
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Postby emlombardo » Fri Apr 27, 2007 10:15 am

We have a similar setup but it is because my credit rating is much better and the cards in my name are very low interest (6.9% fixed). Actually, the interest doesn't really matter, we pa the balance during the grace period every month.

I can say that Chase reports her as being on the account even though she is not responsible for the account.

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Postby Cap » Fri May 04, 2007 4:21 pm

consultantjournal wrote:Or on my account, as the case may be. :)

But why would the authorized user have better credit? Isn't it better to show a balance, which indicates ability to manage credit, than to have zero?


terribly sorry for late response.

I suggested that an authorized user may have better credit because when you have large balance, you increase your available credit to credit limit ratio. if it gets large enough, you will get ding (slightly) for it.

to be clear, showing a balance and subsequently having it paid off does show ability to manage credit, but it all depends on "who" is viewing the report. in a score's perspective, if you have a high balance.. your credit score may get ding. if a lender's credit department is reviewing your report, they may see that you have had high balance in the past, but currently carry little or no balance (hence ability to manage and pay off credit).

lastly, there's a big difference between showing a high balance (and having it paid in full in the same month) than carrying a high balance. if you carry a high balance, your scores and credit in general will be affected. I come across this sometimes, so I'll make it clear: you don't need to carry a balance to build credit.

hope that clears it up a bit more? I think once you get a chance to pull a credit report, you'll see what I'm talking about.

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Postby consultantjournal » Sat May 05, 2007 2:06 pm

I wish credit reports would indicate that the user has a history of paying off the entire balance every month. One person racking up $3k in credit and carrying a balance is not the same as someone who pays it off. However, I guess the credit card companies would rather make some money off the interest! :)
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