An idea that will save both you and your partner in retirement 2

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For couples with a joint or shared credit card, it may be prudent to consider applying for a credit card for each of you prior to retirement.

If either you or your spouse were to pass away, then it makes sense to have the deceased’s credit card cancelled that were previously in joint names.

The problem may be, that when the bank cancels that card, if there is little income supporting you as an individual, then it may be difficult to apply for a new card in your own name rather than the previous joint names.

If you are currently holding a jointly named credit card, it may be worthwhile to starting thinking about having a card in each person’s name, no matter your age.

Below are some key points that may be disadvantages to holding a jointly named credit card:

Both people are legally responsible for making the payments. That means the credit card issuer can take legal action against you for charges you might not have made. You could even be sued and have your income garnished.

Credit card disagreements could cause relationship problems. In a 2008 poll conducted for, 19% of respondents who shared a credit card said they had arguments with the other person about the account. Seven percent said they’d cancelled a shared credit card because it caused relationship problems.

Breakups or divorce make it hard to manage the credit card. No matter what a divorce decree says, the credit card issuer holds you to the original credit card agreement. So if your ex-spouse isn’t paying his or her share of the credit card bills, your credit can still be affected. It’s even harder to manage the credit card bill if you sever ties with someone you were married to or even a friend or family member.

One person could use the credit card to hurt the other. It sounds childish, but it happens, often after a breakup. One cardholder could go on a revenge spending splurge, leaving the other cardholder with the bill. If the revenge-seeker already has bad credit, she (or he) has nothing to lose from a maxed out credit card or a few more late payments.

Should You Share a Credit Card?

It’s wiser to keep separate credit cards. Before you make the decision to get a joint credit card, evaluate your reasons for sharing a credit card. In the survey, only 9% of respondents said they felt closer to the person after sharing a credit card. Similarly, 9% said they felt more in control of the relationship.

Discuss the pros and cons of having a joint credit card. Make sure both people understand the effect a breakup could have on your credit history.

The Retirement Advice Centre is a Corporate Authorised Representative of Millennium3 Financial Services Pty Ltd ABN 61 094 529 987. Australian Financial Services Licensee Number 244252. Unit 7, 50 Borthwick Avenue Murarrie Qld 4172

The information contained in this document is general in nature and may not be relevant to your individual circumstances. You should refrain from doing anything in reliance on this information without first obtaining suitable professional advice. The views expressed in this publication are solely those of the author; they are not reflective or indicative of Millennium3 Financial Service’s position, and are not to be attributed to Millennium3. They cannot be reproduced in any form without the express written consent of the author.

David Reed

David Reed is a certified Retirement Coach and national award winning Retirement Adviser. He has a passion for the science of retirement that has enabled him to successfully guide clients to their ideal retirement since 2003. David has authored two books on retirement psychology and modern retirement planning techniques.

  1. We had two credit cards with different banks but both were joint in my name. My husband also had another one with a different bank for his business. When he retired we cancelled that card. Then I thought what if something happens to me and he does not have a card. Hence the banks x the four big ones – were approached along with our personal bank that had our super income deposited every month into our account, plus substantial investment funds. Only to be told because he was not earning a taxable income he could not get one. Even if we had % million in the bank he still could not get one. So after several hot under the collar tries with the four big banks plus other credit card suppliers we approached a local bank – Bendigo – to be successful without jumping through any hoops. Well done to Bendigo Bank. We were told by the others that we could not be seen to be able to pay back a debt seeing we did not have a taxable income and if I died and my husband kept using mine (which we pay in full every month – records would show that as well) he could be convicted for fraud!!
    So the moral of the story is to get a credit card before you retire in your name not a joint account only in one persons name. They can both have secondary card holders.

  2. We have always had separate accounts on the advice of an accountant friend 40 years ago. It is still good advice. We had one joint account to pay the mortgage and this required both signatures to withdraw .

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