Is having a joint credit card account a good idea?
In July 2019, approximately Rs.59 crore was transacted using credit cards through POS terminals across India. While this data reflects the fact that India is slowly becoming more credit savvy, the truth remains that debit cards still dominate the payment card market in India.
Consequently, to encourage more individuals to apply for a credit card, financial institutions and credit card providers are offering numerous features and benefits. For instance, one can apply for a joint credit card account with another applicant to share the expenses and earn lucrative benefits, such as accelerated RBL Credit Card reward points.
Nevertheless, opening a joint credit card account is an important financial decision. Accordingly, one should go through the pros and cons listed below to assess whether having a joint credit card account is a good idea or not.
Pros of Joint credit card account includes the following:
- Improve credit profile –
An applicant with a poor or no credit history can improve the same by applying for a joint credit card with another applicant who has a good credit history. They should therefore know how to use a credit card wisely to build up a favourable credit profile which will enable them to avail credit easily in the future.
- Reduces repayment burden
In a joint credit card account, both applicants are equally responsible for paying off the outstanding balance at the end of each month. Since both cardholders are responsible for paying the bill, it will reduce the repayment strain for both. Accordingly, as the repayment burden is less, they will be able to pay their bills on time and avoid accruing massive debts.
- More favourable terms and conditions
Applying jointly for a credit card is more likely to enable an individual with low credit score to qualify for better terms, such as low-interest rates and nominal fees.
- Avail more reward points
Both parties can use their joint credit card to conduct transactions, which means the spending amount becomes doubled. As a result, they can also earn more reward points compared to a credit card owned by a single individual. These reward points can be exchanged to earn cashbacks and discounts on purchases at merchant stores.
Credit cards such as Bajaj Finserv RBL Bank SuperCard also offer RBL credit card reward points as welcome bonuses and on reaching certain spending milestones. Furthermore, financial institutions and NBFCs such as Bajaj Finserv also provide pre-approved offers to existing customers which helps in speeding up the application procedure. Such offers can be availed on other financial products too, like business loans, personal loans etc. Applicants can check their pre-approved offers by entering some essential information like their name and contact details.
Now, let’s discuss the cons of joint credit card accounts.
- Late payment will impact the credit score of both
Both the Individuals who have jointly applied for an online credit card together will carry the responsibility of repaying the due amount. Consequently, late payment or defaults will negatively impact the credit score of both account holders.
- Can cause complications
Jointly applying for a credit card can also create complications between the two applicants. For instance, one applicant may decide to increase the credit limit, whereas the other may not want to.
Before they apply online for a credit card jointly, applicants should also know how to choose the right credit card for themself. To this end, they need to assess their spending needs first. For instance; applicants should decide whether they want to use the card to purchase high-end items or everyday things such as grocery, fuel etc.
Applicants also need to compare interest rates and other associated fees offered by credit card companies. They should also check benefits such as RBL credit card rewards offered by financial institutions. Furthermore, both individuals should calculate their repayment capability before applying for a joint credit card account.