Credit card debts are some of the worst financial products that shake marriages and leave long-lasting scars on many relationships. That is why each married couple should establish a practical plan on how they intend to use their credit card accounts. This article will walk you through the best credit card strategies for married couples that should be implemented at all times.
Credit card debts are some of the worst consumer debts
Based on a survey conducted by GoBankingRates, 30% of Americans have $1,001 to $5,000 in credit card debt, 15% have between $5,001 and $10,000 in credit card debt and around 6% have over $10,000 in credit card debt. Although these balances might not sound like a lot, credit card debts are some of the hardest consumer debts to pay off due to higher annual percentage rates(APRs) and compounding interests.
According to LendingTree, the average credit card APR in 2022 is 21.40%. In addition, credit card interests are compounded on a daily basis, according to Experian. Compounding interest means that the interest you pay on your balances gets added to your principal amount and the interest is recalculated based on that new balance. That is unless you aggressively pay off your balances, your credit card debts grow exponentially over time.
These two factors (higher APRs and compounding interests) make credit card debts some of the worst debts in the lending industry. In order to overcome challenges associated with credit cards, married couples must have credit card strategies they follow.
These credit card strategies should allow them to pay off existing credit card debts and prevent them from accumulating more debts. This article will go over some of the credit card tips for married couples.
Without further ado, let’s get started.
1. Pay off existing credit card debts before getting another credit card
Credit cards are some of the worst financial products for married couples. This is because some couples do not use credit cards responsibly which leads to an accumulation of excessive credit card debts. It is easy to accumulate credit card debts because of higher interest rates, compound interest, and easy access to funds.
What people do is just spend and spend until they have used all their credit limits. So, before applying for additional credit cards, make sure that all your current balances on each credit card you carry are fully paid. This is one of the best credit card strategies for married couples that some people ignore.
By paying off balances on each credit card, you get to lower your credit utilization and improve your credit scores. This credit card strategy for married couples also prevents couples from getting into credit card debts.
Related: 6 effective ways to pay off credit card debt
2. Be on the same page before applying for a new credit card
Just like any other financial decision, married couples should consult each other before applying for a new credit account. A big mistake many couples make is that one of them applies for a credit card without consulting with the other partner. Making such a decision leads to mistrust, conflicts in their relationship, and mismanagement of their funds.
One of the best credit card strategies for married couples is to make financial decisions together. Before you complete that credit card application, make sure that your partner is on the same page. This strategy will allow you to manage your finances together without conflicts or leaving the other partner in the dark.
Related: How to talk to your spouse about money in 2022
3. Trust each other
The lack of trust between partners leads to unnecessary conflicts and excessive spending. It is also possible that the lack of trust between married couples can prevent them from making necessary financial decisions.
For example, if one partner wants to lower their credit utilization by getting another credit card, the other partner should understand. This does not mean you should blindly agree with what your partner says. However, you should be given a chance to ask questions and get adequate answers. If you don’t understand the benefit of such an action, it is the responsibility of your partner to give you the answers you desire. Or maybe trust your partner on that particular decision. Having a conversation before making a financial decision is very important in every area of your relationship.
4. Respect your partner’s credit card advise
Just because you don’t understand, it does not mean your partner is wrong. Also, it does not give you the right to say no to a financial move that can help both of you.
No one knows everything. It is possible that your partner will know more than you do. In this case, you should always respect your partner’s credit card strategies if he/she knows more than you do. Being married means that you will live together, educate each other, and face all life challenges no matter what they are together. So, always value your partner’s opinion about credit cards and other financial decisions.
On the other hand, knowing more than your partner does not mean you should dismiss their opinions. Sometimes, the best financial choices are made from common sense. So, listen to your spouse and value all his/her opinions. If you have to compromise, please do so because that is what marriages are all about.
5. Do not borrow more than you can afford
A big financial mistake many married couples make is to rule each other into an unbearable amount of debt. Instead of giving each other advice, they just go with what the other one says. If for example, the wife says”let’s get more loans to buy expensive furniture”, the husband does not say no. He simply agrees with that decision without thinking. Later on, they realize they have accumulated too much debt that is difficult to pay off.
Being partners in life does not mean you have to agree to everything your partner says. If you do, then it will mean you are not living your own life. Instead, you will be living a life your partner wants. In addition, if you say yes to everything, you’ll end up pushing each other off the cliff without knowing it. That is why you should always say no when necessary.
Saying no, however, will not be enough in a healthy relationship. You should have facts and reasons that justify your reasoning. You can just say no without justification.
Related: 12 financial tips that will change your life and make you successful
6. Switch to CASH if you cannot manage your spending habits
Some married couples have excessive spending habits. So, they treat credit cards like free money. The reality is that credit cards are a form of revolving credit and they must be paid off with interest. The more you spend on your credit cards, the harder it is to pay off your balances. If you cannot pay your balances, you end up carrying them to the next payment cycle.
Any balance you carry over, you will pay compounding interest rates which will increase your credit card debts. This is one of the many reasons millions of people are struggling financially. According to Experian, 75% of credit card holders carry balances on their accounts, and the average credit card balance was $5,315 in 2020. This means that most people use their credit cards but do not pay them off in full.
If you struggling with credit card spending habits and you cannot hold yourself back, switch to cash. Cash might not help you build credit and get cashback bonuses and other perks that come with credit cards. But, you will not accumulate a lot of credit card debt when you are using cash. This is one of the best credit card tips for married couples you can start implementing with your spouse.
7. Have a joint account
One of the best credit card strategies for married couples is to have a joint account. A shared account makes it easy to track your account activities and hold each other accountable. For example, if you decided to not spend more than $50 on each credit card, it will be noticed if one of you is going over the limit. This strategy comes in handy when you are rebuilding your credit and increasing your credit scores.
