Starting a family is an exciting time. Though amidst the new joys, it’s important to decide how your family will function. In the following post, Top 10 Online Universities blog, a wide-spanning resource for navigating young adulthood, offers financial advice for young families embarking on the terrain of joint credit card accounts.
This is an example of financial education messaging for young adults in the United States. In what ways do you think it is relevant (or not) for people at the bottom of the pyramid in developing countries?
The post begins:
Sharing a credit card with your partner is a very big deal. What was once all yours to spend is now also theirs. But unlike co-signing a lease or sharing a cell phone family plan, credit card debt is undefined. Before you and your significant other apply for a joint credit card, please check out the following tips for managing a shared credit card.
1. Setting a spending limit
One of the best ways to manage a joint credit card is to set a spending limit individually and as a whole. Aside from your maximum balance, you and your partner need to agree on an amount you cannot exceed. As a rule of thumb, do not carry a balance that is more than 30% of your credit limit. A high balance will accrue more interest and may end up hurting your credit score. It’s best to choose a lower spending limit that is less than 30% of your credit limit.
2. Be truthful
Money is the No. 1 thing married couples argue about, so lying about your purchases or how much you spent on your joint credit card is probably not a smart move. It’s best to be truthful about your spending and share this information with your partner to not only avoid arguments but also give them a heads up that there is a change in the credit card balance. You’ll both be on the same page and won’t have to worry about any surprises on the bill.
Read the rest of the article on the Top 10 Online Universities blog.
Image credits: Top 10 Online Universities
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