topic Re: Merging Credit Cards in Credit Cards

Merging Credit Cards

Anonymous — Tue, 13 May 2014 19:52:48 GMT

Hello all. I am new to these forums.

I am getting married soon and my fiance and I are have a disagreement when it come to credit. We both have excellent credit scores and we are both very carefull on how we spend our money. We both have a Discover. She is insisting that once we are married I cancel my Discover card and become a joint holder on hers. I am hesitant to do so because my Discover has a higher limit (paid off every month) and I don't want my credit score to drop because I close the card. She says we only need one Discover and it will be better for my score because she has a 10 year history where I only have 2. She does not want to become a joint user on my card because she is afraid that her score will drop because she will have too much available credit with both of our cards.

Here is my question:

Should I close my card and join hers or should we both just keep our seperate cards?

Thank you very much for any and all help.

Re: Merging Credit Cards

MrCollector — Tue, 13 May 2014 19:55:48 GMT

@Anonymous wrote:
Hello all. I am new to these forums.

I am getting married soon and my fiance and I are have a disagreement when it come to credit. We both have excellent credit scores and we are both very carefull on how we spend our money. We both have a Discover. She is insisting that once we are married I cancel my Discover card and become a joint holder on hers. I am hesitant to do so because my Discover has a higher limit (paid off every month) and I don't want my credit score to drop because I close the card. She says we only need one Discover and it will be better for my score because she has a 10 year history where I only have 2. She does not want to become a joint user on my card because she is afraid that her score will drop because she will have too much available credit with both of our cards.

Here is my question:

Should I close my card and join hers or should we both just keep our seperate cards?

Thank you very much for any and all help.

1. Keep both of your cards and become AU on each other's account. They will both report on both of your CRs and your scores will go up.

2. Scores never drop with more available credit.

3. If you only want to use one card, use one. That doens't mean you have to close the other.

Re: Merging Credit Cards

DevotionToU — Tue, 13 May 2014 19:58:20 GMT

I don't think there is such a thing as "too much credit" as long as a person (or couple) is responsible with it. If your utilization is fine, there is no real reason to close one of the cards. If you do carry balances, closing a card would be worse for your score, because your % would rise, which could lower the score. Closing a card would not hurt your score unless it increased your overall utilization.

Re: Merging Credit Cards

Anonymous — Tue, 13 May 2014 19:58:44 GMT

Thank you very much for your quick reply.

Re: Merging Credit Cards

Anonymous — Tue, 13 May 2014 20:00:23 GMT

Re: Merging Credit Cards

Anonymous — Tue, 13 May 2014 20:02:07 GMT

I'm not sure if closing one of the cards would increase our overall utilization because we pay expenses with our cards. We spread them out over our cards and then pay them off every month. If we close one card then we will have to put more on another card. we never carry a balance. Is this what you mean by utilization?

Re: Merging Credit Cards

DevotionToU — Tue, 13 May 2014 20:19:45 GMT

Yes, utilization is the amount of balances you carry (that get reported to the CRAs) relative to your total amount of credit available. If you PIF, you don't really have to worry about it.

Re: Merging Credit Cards

Creditaddict — Tue, 13 May 2014 20:25:24 GMT

Since jointly you might run into some categories that between the 2 of you would spend more than $1500 in the quarter so I would keep both so that when that is going to happen you can maximize having $3k in that quarter to earn the 5% back on plus if you become joint on hers you will no longer receive your free TU fico you do now, only the primary gets the fico score.

Re: Merging Credit Cards

Anonymous — Tue, 13 May 2014 20:42:11 GMT

I'm not quite sure I understand the scenario you are proposing. How is $3k on one card better or worse that $1.5K on two? Thank you for the information on the credit score though. I had not realized that.

Re: Merging Credit Cards

09Lexie — Tue, 13 May 2014 20:46:43 GMT

@Anonymous wrote:
I'm not quite sure I understand the scenario you are proposing. How is $3k on one card better or worse that $1.5K on two? Thank you for the information on the credit score though. I had not realized that.

Welcome to the forum. I notice that you might not know how to respond to posts by using our quote feature.

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Re: Merging Credit Cards

Anonymous — Tue, 13 May 2014 21:03:46 GMT

You may want to look at the forum relationships and money

http://ficoforums.myfico.com/t5/Relationships-and-Money/bd-p/DivorceCredit

very useful info there although I am not sure why the link has DicorceCredit in the name

Re: Merging Credit Cards

Ghoshida — Tue, 13 May 2014 21:05:11 GMT

@Anonymous wrote:
I'm not sure if closing one of the cards would increase our overall utilization because we pay expenses with our cards. We spread them out over our cards and then pay them off every month. If we close one card then we will have to put more on another card. we never carry a balance. Is this what you mean by utilization?

Hi James,

When you say you pay off, do you mean you pay off even before the statement is generated, or after the statement is generated but before the due date? If it's the former then the utilization won't matter, if it's the latter then closing one card will increase your utilization.

With respect to 1.5K vs 3K, I think what the poster meant was it is better to have 2 cards just in case, for example in 1st quarter you want to spend more than 1.5K at restaurants. Then having the second card means you can charge the rest onto the second card and still earn 5% bonus cash back.

Yes, I would also advice against closing the card altogether.

Re: Merging Credit Cards

bch238 — Tue, 13 May 2014 21:49:03 GMT

Keep your separate cards. I cannot think of any rational basis to do otherwise, unless your fiance wants to keep tabs on how much and what you buy. I'm not judging, just sayin'. Been married 24 years. My wife and I have separate credit cards, except for The Home Depot. It's worked out.

Re: Merging Credit Cards

takeshi74 — Wed, 14 May 2014 00:21:47 GMT

@Anonymous wrote:
Should I close my card and join hers or should we both just keep our seperate cards?

What's the biggest priority here and do you both agree (if you're getting married you need to get used to being part of the marriage) on that? If consolidating and simplifying matter more then it would make sense. If scoring matters most then it really doesn't make much sense. Are there other relevant concerns that you or she has with regard to this topic?

@Anonymous wrote:
She is insisting that once we are married I cancel my Discover card and become a joint holder on hers. I am hesitant to do so because my Discover has a higher limit (paid off every month) and I don't want my credit score to drop because I close the card. She says we only need one Discover and it will be better for my score because she has a 10 year history where I only have 2.

Verify first that Discover will convert a card to joint. Most creditors will not and if you have to app for a new joint card you'll definitely take hits to AAoA and from the inquiry.

@Anonymous wrote:
She does not want to become a joint user on my card because she is afraid that her score will drop because she will have too much available credit with both of our cards.

She might want to look at:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

More available credit generally means lower utilization. Utilization is the 30% slice in the link above.

A given creditor may look at her avaialble credit and if they deem that she has enough or too much based on their own criteria then they might not be willing to extend more but more available credit will not drop her score.

@Anonymous wrote:
I'm not sure if closing one of the cards would increase our overall utilization because we pay expenses with our cards. We spread them out over our cards and then pay them off every month. If we close one card then we will have to put more on another card. we never carry a balance. Is this what you mean by utilization?

The math for utilization is very easy:

balance(s) / limit(s)

Calculate before and after to determine impact.

Though keep in mind that reported utilization is what matters for scoring purposes -- not carried balances which are an entirely separate matter. One can pay in full (not carry balances) and still have reported utilization. As indicated above, unless you're paying your balances off just prior to statement end to ensure that 0 balances report then you probably have reported utilization (i.e. if your statements have statement balances other than 0). You can also look at your reports or use a CMS to verify. Credit Karma will let you look at your reported utilization with TransUnion at no cost.

Re: Merging Credit Cards

SunriseEarth — Wed, 14 May 2014 00:13:02 GMT

@Anonymous wrote:
Hello all. I am new to these forums.

I am getting married soon and my fiance and I are have a disagreement when it come to credit. We both have excellent credit scores and we are both very carefull on how we spend our money. We both have a Discover. She is insisting that once we are married I cancel my Discover card and become a joint holder on hers. I am hesitant to do so because my Discover has a higher limit (paid off every month) and I don't want my credit score to drop because I close the card. She says we only need one Discover and it will be better for my score because she has a 10 year history where I only have 2. She does not want to become a joint user on my card because she is afraid that her score will drop because she will have too much available credit with both of our cards.

Here is my question:

Should I close my card and join hers or should we both just keep our seperate cards?

Thank you very much for any and all help.

I vote for keeping the separate cards open and in use.

Re: Merging Credit Cards

Anonymous — Wed, 14 May 2014 00:18:24 GMT

There is no reason why you cant be an AU on her card but i highly suggest you keep some of your own credit that is only YOURS. I remember how cutesy it all was when we first got married and we wanted to have joint EVERYTHING, and it was a huge mistake when married (example: you cant secretly buy gifts for her or yourself) and it was a huge mistake when we got divorced ( example: she maxed out the card by pulling cash and i had no extra money for attorney).

Trust me, its healthy to keep a little of your old life after the marriage for many, many reasons. Next she will cancel your friends.

Re: Merging Credit Cards

Anonymous — Wed, 14 May 2014 15:30:18 GMT

Thank you very much for all of your input. I had a discussion with her last night and it seems we are finally on the same page.

Again, Thank you all.