Couples and Credit Cards: Do You Know Your Honey's True Credit?

Posted on June 26, 2019 by Brandy Caulfield, One of Thousands of Money and Finance Coaches on Noomii.

When my husband and I started dating, he had no idea that I had credit card debt. He, fortunately, did not have any debt. In fairness to myself, I was working hard (i.e. doing tons of private tutoring on top of my day job) to pay off that debt. But as the years passed and we neared our wedding day, I somehow still had credit card debt! He still did not.

I was lucky in that my new husband wasn’t deterred by my then-spending habits. Although I know he wasn’t thrilled with it either. I say that I’m lucky because money problems are one of the biggest relationship crushers out there but we muddled through to that golden moment of debt-freeness.

Couples and credit cards can mix as long as both parties are willing to communicate. So, before you get too involved or even if you are already with your partner for the long haul, you should really ask yourself and your loved one these basic but somehow much overlooked questions about their credit card habits.

You, Your Partner, & Credit Card Ripple Effect

Do you know how many credit cards your partner has in his or her wallet? Is it one, two, ten…? Generally speaking, the more credit cards a person has, the higher of a balance they carry. (Not always though if they have them for very specific reasons such as travel hacking.) So, if your partner is carrying a balance on his or her credit card from month to month, they are most likely paying the interest fee, which is usually an insanely high percentage anywhere from 10 to 25% and up! Ouch.

Let me illustrate how much money your honey could be hemorrhaging out. Let’s say that s/he has $4000 in credit card debt (assuming this is all on just one card), the interest rate is 18%, and s/he is only making the minimum payment on the card every month, which is usually a minuscule amount in comparison. Let’s say the minimum payment on this card this month is $100. Here are some interesting calculations:

62 months or just over 5 years is the amount of time it will take him/her to pay off this credit card only making minimum payments

Making only the minimum payment until you pay off the card will result in your partner paying an extra $1423.14 in interest alone!

Not paying the balance in full every month really adds up in interest payments. Ask yourself, or better yet, ask your partner what they could do with $1423.14. Pay rent? Pay two rents? Live off of it for a month? Complete their emergency fund? Invest it? Use that money to make an extra small payment on their credit card bill every month!

Even though you may not be affected directly from your partner’s credit card debt, say you don’t actually help make payments on the card, you are probably still affected indirectly. I like to call this the ripple effect. Your partner is obviously having problems coming up with the money to make payments in full, so they may need money in other areas of their life. Does he or she ask you to pay when you go out for meals or drinks every time? Does he or she ask you to buy them clothes or trips or whatever? Perhaps they are even asking you to make payments directly to their card? Their money avoidance, will eventually cost you money, too.

Your Partner’s Pay-off Plan

All of this said, there is a solution. First, sit your honey down and explain that you worried about their spending habits because it is starting to affect you, too. You should let them know your concern about your future together, financial and otherwise, so-much-so that you want to work together to get him/her out of credit card debt as soon as possible. Then tell them that you are full of support and a little tough love which will help you crush the debt together.

Now comes the part where you really WOW them because you already have a plan in place. Help your better half write down the amount owed on each card. Depending on how many cards, interest rates, and how high of balances they have, I would suggest one of two steps for them to take:

If there are a lot of cards with high interest rates, consolidate all of the cards to one with 0% or a low percentage interest rate, if possible. This will save some money overall. Plus, it will be a morale booster if there is only one bill to pay instead of five, for instance.

If it is not worth consolidating the cards, then I would explain the ‘snowball’ payment method. This is also a morale booster in that your partner will begin to see results fairly soon.

After they pay off each card, your partner should then consider closing some of the accounts depending on their individual situation. Yes, this will ding their credit score, but not for long and definitely not forever. It will just take a little time to build the credit back up.

So, let’s recap our plan:

Have a chat with honey bunny about doing away with credit card debt

Help partner come up with a method to pay off cards by either consolidating cards to a 0% to low-interest rate card and/or start snowballing

After each card is paid off, consider closing the account

Celebrate your partner’s (and indirectly your) new debt-free lifestyle

Start saving an emergency fund (okay, I had to add this one last step. Always plan ahead for your financial future!)

Couples & Credit Cards

Regarding your credit card information. Make sure you truly trust your partner before you hand over passwords, credit card numbers, etc. I know someone who allowed his then partner access to all of this personal information and they went wild. Racked up huge bills from spending. It was not pretty. Of course there will come a time when you will feel comfortable with sharing your information, but until then, be careful.

Final Thoughts

Having both partners in a relationship that are debt-free makes that union so much stronger. You feel like you can conquer the world together. The freedom you get from not owing money can only be felt firsthand an it’s a rush! I know you and your loved one will find that freedom sooner rather than later.

To your financial success!
Brandy

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Sources
Bankrate.com