Credit card strategies to help couples maximize rewards and minimize hassle
When you start sharing finances with someone else, your approach to credit cards may need to be adjusted. Here are strategies to help you and your partner take advantage of the added value of a credit card while avoiding some common mistakes.
Unite, don’t unite
Among the couples I know who have pooled their financial lives, most of them appoint one person to be in charge of money management. This person performs day-to-day monetary tasks such as budgeting and paying bills, and is the primary user of credit cards and bank accounts. This can be as practical as a division of labor, but transferring your credit cards through one primary cardholder makes it impossible for you to have a second.
To maximize credit card rewards and benefits, I recommend that partners see themselves as separate financial institutions with common goals, rather than as a whole. Specifically, allow each of you to act as the primary cardholder on some accounts and add each other as authorized users when beneficial. This approach brings your finances together in a way that promotes synergy, not just efficiency, and has many benefits.
For starters, adding a second player increases the number of cards, benefits, and rewards available to you. Credit card issuers can limit the number of accounts and the total amount of credit they can lend to anyone, but two people can have more accounts and more total credit than one. Teamwork effectively raises these constraints, which means more collective opportunity.
Team credit cards also allow you to double your most lucrative rewards. For example, you can either apply when a particularly large sign-up bonus comes up or earn points and other rewards (such as companion plane tickets) to use on your upcoming trip.
Coordinate, do not duplicate
It might seem natural to get the same credit cards as your partner, believing that a card that’s right for one of you should be good for both of you, but your approaches to earning rewards don’t have to be the same. Instead, try to create a portfolio of cards between you with rewards and benefits that complement each other.
First, you and your partner may have different individual credit card needs, such as if one of you travels for work that involves frequent hotel stays. This can guarantee you will receive a card that offers elite hotel status, but such a card may not be useful in duplicate, since you will receive minimal additional benefit from both of you having status.
In general, you shouldn’t always target the same rewards, even if you plan on using them together. Just like diversifying your retirement portfolio, diversifying your rewards reduces your exposure to risk and volatility (namely, devaluing your loyalty program). It also gives you more ways to claim your bonus, including reward travel booking options, as any hotel or airline’s program is unlikely to meet your needs at every destination.
Distribute rewards fairly, not equally
If you are going to earn credit card rewards and benefits together, you should agree on how you will spend them. One simple solution is to use all of your points and miles together, whether you are investing a refund reward for shared expenses or redeeming airline miles and hotel points for a vacation together. Equal cleavage is simple and creates a sense of cooperation, but not always practical or fair.
In the end, the best way to share rewards is whichever way works for you as a couple. This could mean that each of you is using the rewards you earn regardless of how you see fit, or that you are using points and miles to ensure that each of you is contributing rewards of roughly comparable value, or that you are not paying attention to then you share the rewards because none of you care. There is no single correct answer.