When a couple gets married in Georgia, they will have to decide how they want to manage their finances now that they are married. Credit cards often factor into a couple’s financial plans, as they can be a useful tool for making purchases.
Individual v. joint credit accounts
A married person can have an individual credit account or choose to have a joint credit account with their spouse. You may also decide to have both individual and joint credit accounts.
- Individual: You may be married, but still want to make purchases without your spouse’s input. An individual credit account will be in your name alone and any debt accumulated in this account will be solely your responsibility. Your spouse can be named as an authorized user on an individual account, allowing them to use it, but a creditor must report the credit history to the credit bureau in both of your names (if you opened the account after June 1, 1977).
- Joint: As a married couple, you may find that you want to pay for many things together, such as the wedding itself, furniture, groceries, and other expenses. With a joint credit account, both you and your spouse will be responsible for paying your credit card bill.
What happens if you divorce?
Your marital status does not directly impact your credit score and will not be mentioned on your credit report. However, if you have a joint credit account, it will remain on both of your credit reports when you get divorced and you will both still be responsible for the timely payment of your bills. Even if your divorce decree assigns credit card debt to your ex, a non-payment or late payment from your ex can damage your credit.
Here are a few ways to protect your credit in a divorce:
- Closing joint credit cards or request creditor to convert joint accounts to individual accounts.
- Removing your ex from any individual accounts on which he or she is an authorized user.
- Transferring joint credit card debt to the spouse it is assigned to in the divorce decree before closing the joint card.
- Freezing your credit reports with Equifax, TransUnion and Experian.
- Include an indemnification clause in your divorce agreement to allow you to sue your ex if they refuse to pay a debt assigned to them in the divorce.
Protecting your credit in a divorce is essential to making sure your finances are secure moving forward.