Balance Transfers with Joint Primary Cardholder’s Guide
Posted February 23rd, 2010 and last modified December 28th, 2011
Know the limitations of making a balance transfer if you are a joint primary cardholder.
As everyone probably knows, a balance transfer involves moving your credit card debt from one card (or account) to another. There might be various reasons you would want to do this – maybe you have found a card that charges fewer fees, offers lower interest rates, or you might decide to combine several cards into one easy to handle account. Most cards and most providers allow you to conduct balance transfers with little hassle, and a good transfer deal can save you a lot of money.
However, credit unions and banks do have certain rules when it comes to the balance transfer game, and a little while ago one of our readers contacted us with a fairly common problem. He wrote to us –
“I want to balance transfer my wife’s card to a joint account that I am the primary income earner for but we both want to have access to the card. I was wondering what is the best structure would be to do it with?”
Okay, so what we have to try to do is to combine a single-cardholder account in with an account held primarily in another person’s name. Now, a balance transfer between two jointly held accounts (held by the same parties) is fine, as is a transfer between two single cardholder accounts if they are held in the same name. The problem here is that your wife is not a primary cardholder in your joint account (she simply has access to the account), and your name does not appear on her card.
How to balance transfer to a joint primary card holder with a wife and husband
The answer to this question is as follows: You can only do a balance transfer from a “joint primary” card to a “joint primary” card or a primary card to a primary card.
What is possible
In other words you cannot do a balance transfer from a single primary card holder to a joint primary card. You can also not do a balance transfer from a primary and secondary card holder to a joint primary holder.
What is not possible
Here is a simple 3-step solution:
- Have your wife contact her credit card provider obtain a “joint cardholder” application form.
- Use this form to apply to the company/ bank to have your name added to her account as a joint cardholder
- Once completed, her credit account will effectively be a joint-account where you share the debt. You can now easily apply for a balance transfer to any account which is held in your name.
Don’t forget to close the old account after you have completed your transfer. Once closed it cannot be targeted by criminals, and you won’t unnecessary mail from the company.
A word on joint-primary cardholder accounts and single-primary cardholders with additional users
Since we have mentioned both joint-primary cardholders, and primary cardholder accounts where there is an additional user attached, this is a good time to discuss the differences between the two types of accounts.
The Joint-primary cardholder account: If two people (say a husband and wife) apply for credit together, they may be granted a joint account where both are primary cardholders. Being primary card holders they will both have full access to the account, and can do things like alter credit limits, or freeze or even close the account. Joint primary accounts can generally only be obtained by couples if both parties are employed and have a good credit score – the bank or company needs to be sure that both can potentially repay their half of a debt. Both will have equal responsibilities to pay off the account balance, regardless of who bought what. This can sometimes lead to conflict in relationships, if one person spends a lot more than the other. However, in the event of a divorce or separation, a joint account can be closed and both parties must repay half the debt each.
As long as you and your partner trust one another to spend carefully, a joint account can be great. It’s less paperwork (only one bill) and these accounts often offer lower interest rates and generally more attractive terms.
Primary cardholder account with additional users: This is a common alternative to a joint account, and works well if only one member of a couple qualifies for credit. Usually the single primary cardholder is the only one who can alter credit limits and perform other account maintenance, while the additional cardholder simply receives a card to use for purchases. This can be a perfectly good arrangement if money is spent wisely, however, it is very important to understand that ultimately only one person will be held accountable for outstanding debt – the primary cardholder. In the event of a separation there is no legal recourse for recovering costs from a supplementary or additional card holder. Maybe you have heard a story about a messy divorce, during which credit cards were deliberately maxed-out with frivolous and expensive items? This was probably how it happened – a primary cardholder with additional authorised users, hence the common separation advice of freezing or closing any such accounts.
While a primary-with-additional cards account can work very well, it does require a high degree of trust. Choose your accounts carefully, and if in doubt, reduce your credit limit to minimise the potential damage. For some of the leading balance transfer credit cards in market, check out our Balance Transfer category.
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