In this new series, we hope to offer advice to couples moving in together for the first time.
Today, our topic is whether you should get a credit card together. We’ll outline some of the pros and cons so you can make an informed decision before deciding whether to take the plunge with your other half or not.
Allows you to spread the cost
If you’re moving into an unfurnished property and haven’t lived together before, you might need to buy some essential items of furniture, such as a sofa, bed or table and/or electricals like a washing machine, hoover and microwave. If you don’t enough cash to pay for everything in one go then a credit card might seem can be a useful way of spreading the cost over a number of months.
If you can get a credit card with a 0% introductory period for purchases then this can be very cost effective – provided that you are able to clear the balance within the offer period. Otherwise you are going to pay interest for the period that it takes you to clear your balance – and if you only pay the minimum payment each month this can take years (and the interest may be more than the original amount you borrowed).
When you go shopping (with or without a credit card) you should have a clear budget in mind and try to stick to it. It can be tempting to upgrade when you’re paying on plastic but you need to remember that it will take you longer to pay back (and cost you more in interest).
If you pay for items costing between £100 and £30,000 on your credit card you could benefit from the protection offered by Section 75 of the Consumer Credit Act. This means that, for example, if the sofa company were to go bust before the suite you’ve ordered is delivered you can put a claim for a refund in with your credit card company. Click here for more details >
Handy for emergencies
Many couples budget carefully to ensure that they live between their means – and may even be saving up for a deposit too – so they don’t make regular use of credit. But it can still be useful to have a credit card in your wallet for emergencies. For example, if the car fails its MOT and needs some serious work, or if your washing machine goes kaput a credit card can help absorb the shock and mean you can fund the replacement straight away.
But would you have the will power to just use a credit card for emergencies? This is something you would have to ask yourself, and if you or your partner has struggled with debt in the past you may be reluctant to get a credit card. If it any doubt, it is often best to say no.
When it comes to credit cards there is no such thing as a joint credit card account. Credit card accounts can only be held by one individual but you can add additional cardholders.
This means that if you apply for a credit card in your name with your partner as an additional cardholder he or she would get a card that they could use but, ultimately, you would be responsible for repaying that money. If everything is going swimmingly in your relationship you may feel that this wouldn’t be a problem, however, you should consider what would happen if you broke up and he or she refused to pay back the money. Would you be able to cope with the repayments? Or would it put you in financial difficulty?
We hope this blog has given you food for thought and that if you do decide to get a credit card, you are more aware of the pros, cons and risks involved.