If you live in Davidson and are considering whether or not to share a credit account, there a few things you should be aware of so that you can make an informed decision. As with many financial situations, there are both pluses and minuses involved. If you have had issues with money in the past, such as debt that went into collection or a bankruptcy, it is especially important that you understand the repercussions of having more than one person on a credit card account.
In order to determine whether or not it is a good idea to share a credit card with someone, it is first crucial to understand the difference between a joint account holder and an authorized user. According to Bankrate, if you and another person are joint account holders, you essentially share the account. This means that it is in both of your names and you are both equally responsible for repaying the debt. The use of the card and any payments will be reflected on both of your credit histories.
This can make sense if the other person is someone who you trust to be responsible, such as a spouse. But it also means that if the other account holder runs up a significant balance, you are responsible for that debt and your credit score may take a hit as a result.
On the other hand, an authorized user can use the credit account but has no obligation to be responsible for the bill. So, if you are trying to help someone gain access to credit and are willing to retain sole responsibility for the account, this could be a viable option. For example, if you had a child who is at college and you want him or her to be able make purchases but have the bill come to you, you could make them an authorized user. However, this will not necessarily help the other person establish a credit history unless you are certain that your credit card company reports authorized users to the main credit bureaus. This is provided as general information on this topic and should not be considered legal advice.