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Many husbands are often found joking about how handing over a joint credit card to their wives is a recipe for disaster. But that is an old school thought, as many modern financial wizards tell you. Sharing your credit card with the spouse has it perks. Read on to find out more!
When you get married, you get into an unwritten commitment of sorts to share everything including financial responsibilities. Applying for a joint credit card, is a great way to begin, as the credit activity will reflect on both your CIBIL reports and if you both have good financial habits will help you improve your CIBIL score. Here are five ways in which you stand to gain, if you get a joint credit card with your spouse.
Give your CIBIL score a boost
The activity on a joint credit card as we mentioned earlier reflects on the CIBIL report of both you and your spouse. This can be both a good and a bad thing. If you are financial conscious and pay off your outstanding balances in full each month and keep a hawk on the utilisation rate of the total credit and keep it under 30 per cent, your credit card can be used as great ammunition to garner a higher CIBIL score. But do bear in mind that it works the other way as well. If any of you proves to be a reckless spender and pile up credit card debt, it will end up wrecking both your CIBIL score as well as your marriage!
Be more accountable
Like we mentioned earlier, reckless spending on your credit card can cause your CIBIL score to nosedive. However if both you are using a joint credit card, it helps you keep a tab on your usage. If one of you has the tendency to go overboard, the other can assume responsibility of acting as a stopper. Don't let money matters escalate into a fight, but help each other to become more financially responsible.
Faster loan processing at lower rates
If you have been following write ups on CIBIL and their impact, you already know by now that having a good CIBIL score puts you in a vantage position when you are out seeking a home loan or a vehicle loan. A higher CIBIL score gives you greater power to negotiate with the bank and arrive at a better rate of interest. You may also get other perks such as the processing fee being waived off or better terms for servicing the loan. Most of all, your loan application may be processed really fast, as the due diligence for the bank is cut down drastically, as a high CIBIL score is a measure of your financial health and credit habits and gives the bank the immediate confidence to lend.
Better money management
If you are a financially conscientious couple and split all your expenses from groceries to entertainment, using your credit card is a great way to manage your expenses. When the credit card statement arrives, you will have a full record who has spent what and you can simply use your credit card to pay off your share.
Earn more reward points
In a bid to attract customers, credit card issuers have many attractive reward programmes on offer. When both of you are using the same credit account through a joint card, you have a chance to garner reward points faster and reap the benefits of freebies. If you choose a good card you can either get a chance to earn cashbacks on almost every purchase or you can accumulate your reward points and redeem them for cheaper airline tickets or hotel stays, when you and your spouse are planning a vacation.
Thus, a joint credit card can help you in a number of ways. Judicious use of your joint credit card wisely, will help you keep your CIBIL scores high and will open up doors easily, when you are in the need to access credit.
Illustration: Dominic Xavier/Rediff.com
The author is a credit expert with 10 years of experience in personal finance and consumer banking industry and another 7 years in credit bureau sector. Rajiv was instrumental in setting up India's first credit bureau, Credit Information Bureau (India) Limited (CIBIL). He has also worked with Citibank, Canara Bank, HDFC Bank, IDBI Bank and Experian in various capacities.
