Many know that merging money with a romantic partner or relative is not a choice to be taken lightly, and that there are risks of combining credit cards, for example, in that your credit score — crucial for financial independence — could become vulnerable to your partner’s debt, spending and payment habits.
But for people in abusive relationships, the financial control that one partner exerts can compound problems faced by victims — and further remove their agency as they seek to escape. A cardholder’s partner might use their credit cards without consent, or they might force the cardholder to add them to their account. That could mean soaring debt and a sinking credit score, making it hard to take control by finding a new place to live.
“Coerced debt is prevalent among women who’ve experienced domestic violence,” said Angela Littwin, a professor at University of Texas at Austin’s law school who specializes in bankruptcy and consumer protection. “It’s one tool abusers can use to control their victim and make it difficult for them to leave the relationship.”
Let’s say a woman’s credit score takes a hit because her partner racked up debt on her card, for example: That “will interfere with her ability to get a job, find an apartment and to turn on the lights in that apartment,” Littwin said. Landlords, utility companies and some employers check credit reports.
To make matters worse, shifting trends in and rules around how credit cards can be shared by partners means it can be particularly confusing for financial abuse victims trying to protect themselves. Here’s what to know:
There are two ways to add a second person to a credit card account
You’ve basically got two options when it comes to putting more than one name on a credit card account: Open a joint account or add an authorized user.
The latter option has become more common in recent years, as many cardholders are no longer offering joint accounts. But both choices come with big risks — including the potential for financial abuse, a serious form of domestic violence in which an abuser uses money to control a victim.
Many people think they have a joint account with their spouse or partner, but they actually don’t. You can only be a joint account holder if you both open an account together at the same time. If you want to add your partner later on — say after you get married — authorized user status would be your only option.
Even if you want to apply for a joint account together and are willing to submit a co-application, you may have a hard time finding a card that will allow joint owners. Only a few major card issuers currently allow joint accounts, while most only allow a primary account holder and authorized users.
Why opening a joint account versus adding an authorized user matters
It’s important to understand the difference between the two kinds of shared accounts. “With a joint account, both people on the account are responsible for the debt accrued on the card — and responsible for paying it off each month,” Kimberly Palmer, credit cards expert at NerdWallet said in an email interview. “Authorized users, on the other hand, are not responsible for the debts accrued, even though they have the ability to use the card. They also are not able to make changes to the card, like increasing the credit limit.”
This is where things get problematic in an abusive relationship in which an abuser charges massive amounts to the primary account holder’s card: “If that person runs up $1,000 in charges on the card and doesn’t pay it off, [the victim] will likely be stuck with the bill,” industry analyst Matt Schulz said in an email interview.
The primary account holder faces the biggest risks because the authorized user doesn’t have any obligations to actually pay for what they charge to the card. Authorized users can even charge legal fees on a credit card during divorce and stick the primary cardholder with the bill, Brian McNamara, a divorce lawyer in Kingwood, Texas, said in an email interview.
While a divorce court could rule that shared funds must be used to pay off the debt balance, the debt would still be tied to the primary cardholder’s name, and failure to pay would still only reflect on the primary cardholder’s credit.
Authorized users are at risk, too
The biggest risk to being added as an authorized user, on the other hand, is that you’re not building an independent credit history. While most card issuers report a card’s history on the credit report of an authorized user, not all do. So if you don’t have another card in your own name, you may wind up with no credit history at all if you are removed as an authorized user by your partner.
Even if your status as an authorized user does get reported to credit reporting agencies, “being an authorized user doesn’t have as strong an impact as other behaviors, such as having a credit card in your own name that you are responsible for paying each month,” Palmer said.
That could make it harder to get your own card after a divorce or separation if your ex cuts you off from their account. And not having access to credit can be a contributing factor to someone feeling trapped in the relationship or returning after leaving.
As many as seven out of eight women will return to an abusive partner after leaving, and many do so because of financial pressures, according to US News & World Report. Though many statistics focus on women who experience domestic abuse, people of any gender with partners of any gender can experience these same patterns of financial abuse and domestic violence.
This is how to protect yourself from financial abuse of your credit cards
The number one factor to keep in mind when you are adding an authorized user is whether you trust them not to run up a huge bill on your credit card.
That may be easier said than done if you are already trapped in a financially abusive relationship, however. “To avoid it is hard, because people don’t intentionally get into abusive relationships that involve coercive control,” Littman said.
If you are able to exert control, it’s important to use equal caution before agreeing to add yourself as an authorized user on someone else’s account. One step that can help is to make sure you have at least one credit card in your name only. “It may not seem necessary when times are good, but when things head south, good credit can be a lifesaver,” Littman said.
If you are the victim of financial abuse or domestic violence from a partner, you can get help on repairing your credit and obtaining housing through a local domestic violence coalition, Littman advised.