Why Get a Credit Card in Your Own Name

Should you get a credit card in your own name? Some married couples choose to get just one credit card account, in the name of the spouse, while the other spouse is an authorized user. While this arrangement works for many couples, it is still a good idea to consider having at least one credit card account in your name. Why is this important?

Credit Cards and Credit Historywhy get your own credit card

To understand the significance of having your own account, let’s talk about your personal credit history. Each one must make his/her own credit history. How? This is done by acquiring different types of credit in order to show your capability of managing debt and repayment. Creditors or lenders report your activities to the three major consumer credit bureaus.

Each credit bureau does its own independent reporting which is why it’s important to order all your three reports if you want to check your personal credit history and credit score. It is also essential to choose a credit card issuer that reports to the three major credit bureaus.

Credit Cards and Couples

What happens when a couple shares only one account? If the credit card is in the name of the husband or the wife, the activities reported will only reflect on one spouse’s credit history. Even though the other spouse is an authorized user and uses the account regularly, the activities will not be reflected on his or her credit report. Obviously, only one person benefits from the account with regards to building credit.

Therefore, while being an “authorized user” is not really a bad idea, acquiring a personal credit card account is recommended for the purpose of credit building. Take note that being an “authorized user” is far different from a joint credit card account. If a couple chooses to open a joint credit card account, both of their credit activities will be reflected with their credit reports.

As owners of a joint credit card account, both of you have the responsibility to pay for the charges or debts incurred using the credit card. If you are an “authorized user”, you can use the account for transactions but you are not accountable to pay for the charges. Only the primary owner of the account has the responsibility for repayment.

Credit Cards and Students

Even students are advised to apply for a credit card in their own name as soon as they are ready for the responsibilities associated with being a card holder. The most important reason is so they can establish an early credit history for themselves. An early credit history will be most beneficial when student graduates from college and enters the corporate world.

So while parents can declare a child as an “authorized user” of a credit card account, the account cannot be used for establishing and building credit history. Meanwhile, when a student uses a credit card in his/her own name, he/she will be able to build good credit as long as the account is handled in a responsible way.

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Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

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NHBS Inc © 2022

NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

Privacy Policy Terms of Use

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