How NOT to Use Credit Cards: Couples Edition

Do not let credit cards use you to destroy your wealth.

You have the power to use credit cards to build your wealth.

Credit cards can strain or cause arguments in a relationship. As a matter of fact, couples who disagree about financial matters are twice as likely to divorce as those on the same page about their finances. Not being on the same page about financial risks is the strongest predictor of divorce.

Managing money as a couple is as much an art as a science. The only perfect playbook is the playbook that works perfectly for you.

Couples who combine their finances need to discuss how they will work together to manage their credit cards, depending on how they have combined their money. Some couples combine their finances; others do the same but have individual accounts for fun money.

To help couples, I created a free mini-course on budgeting that includes a customizable budget sheet.  It includes linked video clips with tips to help couples build budgets together.

10 Ways Couples Should NOT Use Credit Cards (and what to do instead)

1. Committing Financial Infidelity

A poll from the National Endowment for Financial Education® (NEFE®), analyzing financial infidelity among U.S. adults, finds that among those who report having ever combined finances in a relationship, two in five (43 percent) confess to having ever committed some act of financial deception. When asked for reasons why they had committed a financial deception:

• 34% feared disapproval by a partner/spouse in a relationship where discussions of finances had already occurred

• 33% were embarrassed or fearful about their finances

• 27% feared disapproval by a partner/spouse in a relationship where discussions about finances had not yet occurred.

Be open with one another about any past credit card debt and how you feel about using credit cards now.

Be honest about the credit card behavior by your partner that you appreciate and the behavior that adds stress to your relationship and personal finances.

Waiting to talk until something contentious arises, such as receiving an unexpected bill or uncovering financial infidelity, will likely lead to a fight.

Schedule a money date instead. A time you and your partner can have a conversation about money, free of distractions and in a setting that is more comfortable to have tough conversations.

Work together to decide who should manage your credit cards. Be clear about responsibilities to prevent misunderstandings that lead to late payments or high balances.

2. Misjudging Who Should Use Credit Cards

Personal finance is more personal than finance. Credit cards can serve as a tool for wealth building or a weapon to destroy it. Folks who are unable to use credit cards responsibly should not have one. Full stop.

Drazen Prelec is a pioneer in the field of neuroeconomics. He is a professor in the MIT Sloan School of Management, holding appointments in the Department of Economics and in the Department of Brain and Cognitive Sciences at MIT.

Prelec and his team conducted an experiment in which they organized a silent auction for tickets to sold-out Celtics basketball games. They told half the bidders they could pay only in cash, and the other half they could pay only by credit card.

They found that, on average, credit card buyers bid more than twice as much as cash buyers. His findings are similar to past studies, which found that people spend, on average, up to 19% more using credit cards than cash.

42 percent of U.S. adults currently have credit card debt. U.S. adults with a net worth of $100K to $199K hold the most credit card debt, and the most common reason cited is day-to-day expenses. If not careful, credit cards can become the preferred tool for frivolous spending.

Determine who is best suited to use credit cards. This is an easy decision if both partners can manage credit cards well, but that is not always the case.

An authorized user can make purchases using your credit card. Authorized users typically have a copy of the card in their name tied to your account. The authorized user is not legally responsible.

Authorized users can improve or build their credit scores by being added to the accounts of a primary account holder with strong account history. Once added to the account, its entire history will appear on your credit reports if the card issuer reports authorized-user activity.

Conversely, the authorized user's credit score can be damaged if the primary cardholder misses a payment or has a high utilization rate.

However, authorized users can remove themselves from the account at any point. When this happens, the account is removed from the authorized user's credit reports, so there's no lingering negative impact.

A joint account holder is considered a primary borrower on the account. Unlike authorized users, joint account holders undergo a credit check when applying for the account.

Both account holders are equally responsible for any debt incurred using the card. And joint account holders can't remove negative information from their credit report as authorized users can. Even after closing the account, negative items will remain on the credit reports of both joint account holders for seven years.

In summary, it is far simpler for couples to have their own accounts and add each other as authorized users. Only add your spouse as an authorized user if you can trust them to use your credit card responsibly.

Listen to Senior Director of Public Education and Advocacy for Experian Rod Griffin explain the differences between the two in more detail on our Modern Husbands Podcast.

3. Destroying Your Credit Score Using Credit Cards

Here are three ways you destroy your credit score with a credit card:

1. Maxing out your credit card

2. Carrying high balances

3. Missing a payment

Most financial experts recommend keeping credit utilization below 30% to maintain a healthy credit score, and this is absolute nonsense.

Rod Griffin, Experian Director of Public Education, has shared with me numerous times that folks should aim to keep their credit utilization to as close to 0% as possible.

I can’t recall the last time my utilization rate exceeded 2%, which was clearly a factor in earning my perfect FICO 8 credit score.

FICO shared the results of its study on the traits of folks across credit score ranges. Those with a FICO 9 credit score between 800 and 850 averaged a total revolving utilization rate (i.e., credit cards) of 4%. 95% have never been delinquent, and of those who have, it’s been an average of 46 months since then.

Here are a few simple ways to soar your credit scores:

1. Pay credit card balances in full every day.

2. Ensure at least one partner assumes full responsibility for using credit cards to build credit scores.

3. Increase credit limits without changing spending habits.

Your financial life in a spreadsheet, automatically updated daily. Build your budget, now.

Related: Losing Our Perfect Credit Scores After Making a Responsible Financial Decision

4. Paying Credit Card Fees and Interest

According to the CFPB, late fees account for 99 percent of penalty fees and over half of the credit card market’s total consumer fees. Fees paid range, but as you can see, the trend of who pays fees and how much is clear: the average deep subprime account is charged $138 in late fees, compared to $11 for the average superprime account.

Credit card late fees Consumer Financial Protection Bureau I March 2022

According to Experian, the average credit card balance in 2019 was $6,194. And according to the April 2022 WalletHub study, the average credit card interest rate is 18.32% for new offers and 14.56% for existing accounts.

Credit card interest and fees add up to $120 billion per year. That said, as long as credit card balances are paid in full and on time, not one penny in interest will be paid. Interest applies to carried balances, and the video below illustrates this so well.

5. Choosing a Card Impulsively

Opening a new line of credit can modestly and temporarily reduce the credit score of someone with an established credit history, mainly because it reduces your overall average length of credit history.

Partners should consider how at least one can maintain an excellent credit score while getting the most favorable credit card terms.

Be patient and wait for the best signup bonus offer. If you both have excellent credit, consider double-dip signup bonuses.

6. Not Addressing Credit Card Debt

Whether couples enter a relationship with credit card debt or it accumulates while they're together, married folks should be laser-focused on eliminating it as quickly as possible. Here are three strategies to eliminate credit card debt.

1. The avalanche method first focuses on paying off the loans with the highest interest rates. Arrange each debt from the highest interest rate to the lowest. Make the minimum payments on all debts, but apply as much as possible to the loan with the highest interest rate first. After this is paid, apply the same amount to the account with the next-highest interest rate, and so on, until finished.

2. The snowball method prioritizes paying off the smallest balance loans first. Once that debt is paid, apply the money that was applied toward that payment to the next-smallest debt balance.

3. Consider transferring credit card balances to new cards with lengthy 0% intro APRs to avoid interest.

Watch this short illustration that explains how each method works in more detail. This illustration is available on our free customizable budget sheet for couples.

The Bankrate credit card payoff calculator is an excellent companion tool to work through this. The CFPB debt reduction worksheet is a handy resource for partners to stay on the same page.

7. Choosing the Wrong Credit Cards

Partners should take time to sit down together to review their spending habits and identify patterns that fit into credit card rewards categories. Most credit card search engines categorize cards as follows:

• Credit cards with low interest rates

• Credit cards for bad credit

• Best credit cards for travel

• Best credit cards for rewards

• Best credit cards for cashback

• Best credit cards for balance transfers

However, credit card rewards are often more specific. Gas, groceries, dining out, airfare, and pharmacy purchases are common rewards categories with varying percentages. Uncover where the most money is spent within those categories to determine what credit card is the best fit.

Credit card search engines do profit when a credit card is selected using their site. Here is an example disclosure:

CreditCards.com is an independent, advertising-supported comparison service. The offers that appear on this site are from companies from which CreditCards.com receives compensation. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within listing categories. Other factors, such as our own proprietary website rules and the likelihood of applicants' credit approval also impact how and where products appear on this site. CreditCards.com does not include the entire universe of available financial or credit offers.

CCDC has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.

Please note that Modern Husbands made the strategic decision not to partner or affiliate-market with credit card companies. The advice we provide will remain unbiased and focus on supporting the educational efforts of the Modern Husband community.

We do not intend to steer you away from using these services. I use them myself, and we want to ensure you understand how they generate revenue. Here are four widely used credit card search engines.

• Nerdwallet

• CreditCards.com

• Bankrate

• WalletHub

8. Closing the Wrong Credit Card

Your average length of credit history is generally around 15% of your credit score. Unless there is a clear advantage for closing an account, such as an annual fee, keep the oldest credit card account open and try to use it at least once a month. It doesn’t have to be a primary credit card.

If other cards offer more lucrative rewards, consider using the oldest cards for small automatic purchases, such as a Netflix subscription, and set up auto-pay.

One final note – don’t close an account without understanding what happens to any accumulated rewards!

9. Holding the Wrong Number of Credit Cards

The perfect number of credit cards is the one that's easiest for partners to manage responsibly, with rewards that best meet their financial goals and needs. According to Experian, the average number of credit cards per person in 2019 was 3.84, but that doesn’t necessarily work for you.

According to Rod Griffin, the Experian Director of Public Education:

“From a credit reporting and scoring standpoint, you only need one or two credit cards. Make sure to use them responsibly. If you make a purchase, pay it in full each month and keep your balances low. You don’t need to have a lot; just a couple are sufficient for building a strong credit history and good credit scores.”

10. Not Understanding Key Credit Card Terms

Reading the fine print is the opposite of fun, but it’s essential nonetheless. Most of what you need can be found in the Schumer Box, which is required by law to be provided to consumers. Below is an interactive Schumer Box. You can click underlined key terms to view an explanation of what they mean.

Below you can also find key terms folks should understand before opening a credit card account, pulled from the Consumer Financial Protection Bureau.

• Annual Percentage Rate (APR): To calculate the APR, the interest rate and fees are compared to the amount you borrow and calculated over a one-year period. This allows you to compare the costs of a credit card with those of a six-month installment loan. It is also why APRs are often different from simple interest rates.

• Balance transfer: A balance transfer lets you move an outstanding balance from one credit card to another, sometimes for a fee.

• Grace period: The period between the end of a billing cycle and the date your payment is due. During this time, you may not be charged interest as long as you pay your balance in full by the due date.

• Credit balance: An amount that the card issuer owes you.

Check out the Consumer Financial Protection Bureau Consumer Tools Credit Cards page for more unbiased information.

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Updated post: 6/26/26; Original post: 6/11/22