Marriage, finances & credit cards

[neatokimmo]

Hm.. I'll have to ask my husband about this one. He should know, or can ask around the office since he works in the federal money laundering division under the Patriot Act. He's in training today.

There are so many pieces to the PA, I'd be interested in knowing which bit caused it. I was guessing money laundering or fraud (kinda sorta the same thing anyway).

 

[neatokimmo]

I'm getting married next September (so yes, we have a year to plan/figure this out but I'm a planner ). DF and I are planning on combining our finances. We have pretty similar ideas about money and know eachothers spending habits so I'm not too worried about that (although I'm not naiive enough to think the whole thing will be totally conflict-free).

We both have a good number of credit cards- two of which we both have the same card. His credit is low and mine is high so my limits are higher than his. When we get married we'll likely make those joint cards- so the question is, do we cancel his and put him on mine (since my limit is higher)? Or will cancelling the cards make his credit lower? Or will it even matter since his credit is already low and this is a good opportunity to clean up our card collection? Or the other option is to keep his open and just cut up the cards.

I'd like to clean up our little collection since we both have a few that we use fairly frequently (me 6 and him 3). If I add him to mine, that will increase his available credit so would it even matter if we closed his with smaller limits?

[note: we use a lot of different ones bc of the rewards we get or that they're store cards- all are paid in full every month and there is never a balance on them. Also two of my 6 cards are my mom's that I don't personally charge on, and one is a store card that can't be used elsewhere. One is a costco card that I have so I don't have to use cash/debit at costco.]

Any advice from the credit experts?

Oh and congrats on getting married, seemed to skip over that important piece!

 

[tlbwriter]

Canceling his cards *will* lower his credit rating. I'd hold onto them, or at least his 2 oldest cards, and continue to use them and pay them off occasionally. Keeping those accounts open, active, and on time will help him quite a bit.

 

[hambirg]

OP, if you will both be working, the best solution is to keep your current checking account, and he keeps his. You can open a JOINT account for the purposes of paying bills and spending of everyday items (groceries, etc.) You and your DH will decide how much each will put into the account (to be FAIR, you should contribute 50% of your income, and he should contribute 50% of his income). This account will serve for all "joint" expenses. And, when you go to apply for a loan or something, it will be useful to have a joint checking account.

This.

There is a reason people give this kind of advice. It's not fun to think about the possible break up of a marriage while you are still planning your wedding. . .BUT considering the divorce rate, it is prudent. Unfortunately, it is a sad but true fact. People can get very ugly during a divorce, even after years of marriage. Remember that guy that bulldozed his own home? It's not uncommon for people to run up credit cards or make a mad dash to the bank when things start to fall apart. I have a friend who had to pay off her ex husband's truck, because he bought a brand new one right before they separated, but they put the loan in her name because her credit was better. It irritated her beyond belief, but she had no choice really. They had a long drug out divorce and she had to continue to make the payments. She could have stopped and had the truck repossessed, but it would have hurt her credit and she needed to be able to have the house refinanced in order to keep it, so she was kind of stuck. Keep things separate.

 

[tlbwriter]

There is a reason people give this kind of advice. It's not fun to think about the possible break up of a marriage while you are still planning your wedding. . .BUT considering the divorce rate, it is prudent. Unfortunately, it is a sad but true fact. People can get very ugly during a divorce, even after years of marriage. Remember that guy that bulldozed his own home? It's not uncommon for people to run up credit cards or make a mad dash to the bank when things start to fall apart. I have a friend who had to pay off her ex husband's truck, because he bought a brand new one right before they separated, but they put the loan in her name because her credit was better. It irritated her beyond belief, but she had no choice really. They had a long drug out divorce and she had to continue to make the payments. She could have stopped and had the truck repossessed, but it would have hurt her credit and she needed to be able to have the house refinanced in order to keep it, so she was kind of stuck. Keep things separate.

And even if you're going to stay married for the rest of your lives, it's good to have YOUR money and HIS money. If you have a joint account for joint expenses, and then your own personal "play money" that you're allowed to use however you want, you don't have to get angry that he bought a new foot waxer while you were trying to save for a vacation, and he doesn't have to get angry that you spend so much money on basket weaving lessons. You can both have your own discretionary funds that don't impact the joint budget at all. Now, you may feel comfortable with $10 a month in play money, or you may feel comfortable with $1000. Just as long as it's an amount that you can freely allow the other to spend without thinking "why did you waste so much of our money on THAT?"

 

[ICF]

And even if you're going to stay married for the rest of your lives, it's good to have YOUR money and HIS money.

In your opinion....which is fine, but that doesn't mean it is the only way.

I'm in the your married and you should have mostly joint money (I can see the CC in your own name though) camp. We combine all money and income, which in MY opinion is how it should be. You're a married couple...not roommates.

What if one spouse works and the other doesn't....and they don't have "their own" money to spend?? Do they just get to watch the other person spend all the fun money...or do they have to get a weekly allowance from the working spouse?

 

[tlbwriter]

In your opinion....which is fine, but that doesn't mean it is the only way.

I'm in the your married and you should have mostly joint money (I can see the CC in your own name though) camp. We combine all money and income, which in MY opinion is how it should be. You're a married couple...not roommates.

You said MOSTLY joint money. Presumably that means some money is NOT joint money. So how is that different from what I said? Did you read where I said this could be as little as $10 a month? Do you really have a problem with your spouse putting $10 in his/her pocket and saying "I'm going to spend this on whatever I want?"

What if one spouse works and the other doesn't....and they don't have "their own" money to spend?? Do they just get to watch the other person spend all the fun money...or do they have to get a weekly allowance from the working spouse?

Yes, if one spouse doesn't work, they should still have their own discretionary funds. It's not an "allowance," any more than the money they spend on their food, clothing, and medical care is an "allowance." It's a budget item.

 

[KarenAylwood]

Thanks for all the replies!

To help yourself answer that question (and not necessarily to open up for discussion here!), ask why, if you both have pretty similar ideas about money, his credit is low and yours is high?

Did he have a catastrophic event beyond his control that ruined his credit, or are your shared values only a recent development, with a chance that he could backslide into old habits and drag your credit with him?

I knew you guys would pick up on this and thought about leaving it out He made a decision I never would have made (with influence from his parents) to buy a house he could *just* afford. Then from there a multitude of things happened (including losing his job and having to take one making way less- but he just got another one yesterday after 9 months of searching making 45% more! I'm so proud of him! ). He was advised to stop paying his mortage for a period of time so that's where the bad credit comes in. Every other bill has been paid in full and on time, and he's not a huge spender (I actually spend more than him). I'm not thrilled about the situation and it's not a decision I would have made but there's not much I can do about it now!

I guess I want to consolidate so we're not keeping track of like 7 different bills in a month. Since we have two that are the same I was thinking I could just put him on one of my cards. If I put him on as a joint user - couldn't I just as easily take him off? Like if we ended up getting divorced or on bad terms, I would think being the primary holder I could just cut him off it?

I could get on board with the idea of having a joint account and then separate ones, but doesn't that get confusing? Also I'm not talking about making everything joint- I have a good amount of money in savings and stocks that I plan on keeping in my name- but of course it will be "ours" if we need it for an emergency. Likely he'll be the bill paying person (being on time hasn't ever been my strong suit) and I'll likely be the "we need to save for x, y, z" person. We are already planning on having monthly talks about money and what we spent each month.

Both of my parents were divorced before they met eachother and ended up with a lot of debt from their previous marriages- I know I don't want to repeat their mistakes, but I would like to have SOME things joint. Afterall, we're getting married.

I hadn't thought about the longevity of his cards and it having a good effect on his credit- although I think he's only got the two that are old. His costco Amex is the new one, which I have an account of too (with the higher limit).

And that's really interesting about not being able to be on someone else's card. My mom just signed up for a Disney Visa and got me a card too. She wants me to charge some of the wedding expenses to it.

Oh and neatokimmo~ old "No Buy" buddy thanks!!!

 

[ICF]

You said MOSTLY joint money. Presumably that means some money is NOT joint money. So how is that different from what I said? Did you read where I said this could be as little as $10 a month? Do you really have a problem with your spouse putting $10 in his/her pocket and saying "I'm going to spend this on whatever I want?" .

The only exception to joint accounts that I would say is the CC option.

My wife and I spend what we need / want / can afford to spend. We're responsible adults who know how to manage money. If one of us wants to spend "$10" we wouldnt need to consult the other or take it from our "private" stash of money.

We also respect each other enough to not go out and make a large purchase without discussing it with the other 1st to make sure it can be afforded at that time.

 

[Swimalie]

There are so many pieces to the PA, I'd be interested in knowing which bit caused it. I was guessing money laundering or fraud (kinda sorta the same thing anyway).

Not money laundering nor bank regulations. That's what my husband works in and I already asked him. It's not in the Patriot Act that his job in money laundering regulations falls under.

 

[tlbwriter]

The only exception to joint accounts that I would say is the CC option.

Discretionary funds doesn't mean they are not joint accounts. DH and I have two checking accounts, one "his" and one "mine," but they are both joint accounts.

My wife and I spend what we need / want / can afford to spend. We're responsible adults who know how to manage money. If one of us wants to spend "$10" we wouldnt need to consult the other or take it from our "private" stash of money.

So if you have your own discretionary funds you're not a responsible adult?

 

[ICF]

So if you have your own discretionary funds you're not a responsible adult?

yeah, that's what I said......

 

[bettymae1121]

All I can say is what works for us. DH hates anything to do with finances so I handle all the book keeping, from paying bills to do the taxes every spring. Both our paychecks are direct deposited into our joint bank account, excpet for $100 from each of DH's pay checks, that's his fun money which goes into a sperate debit card that's just his and he does what he wants with it. I could do the same but figure why bother, I handle the finances anyway, beside I don't want $200 a month to spend on just me.

Anyway, the bills get paid out of the joint account, including our joint credit card, which we use for gas, groceries, buying stuff at the hardware store, etc. DH could spend more than $200 if he wants to, that's just the amount he decided on. I don't care as long as I have enough to pay the bills.

The one thing I would say is not to put him on any of your accounts (or put yourself on his) until after you get married. Odds are of course that your relationship will be fine, but just on the off chance something goes wrong between now and then, it's just a better idea to keep it all seperate until things are official.

 

[Lucky4me]

My advice- Keep your own cards. Keep your own checking accounts, but co-sign on each others. (my name is on my checks, his are on his, but if we want, we can sign the others) Not that we even write checks anymore...
Split the bills accordingly. Also get power of attorney concerning all financial decisions. This recently came in handy for us when dh got sick and I needed to cash in some bonds that were in his name.
I like it this way. We both maintain our own credit rating, we each know what we need to pay every month and very rarely argue about finances.
If you are both the same with money, this will work. If one of you is careless or secretive, it won't.

 

[MrsPete]

I can only tell you what worked for us: When we got married twenty years ago, we combined everything. We never considered that there'd be any need to keep separate money, and no need has come up in our two decades as husband and wife.

Most importantly, we discussed budgets. We agreed on spending limits, and we both stuck to them. At times we've had NO spending money for ourselves, and at other times we've each been allowed a spending allowance. It's always worked because we agreed together on what we could afford, and we've both abided by our agreements. Now, after years of marriage, we don't really talk about budget anymore. We just know what's okay to spend and what's not okay to spend -- but you don't get to that point in weeks or months. I pay the bills because he doesn't like to see money going out (he's fine with me doing it, but he doesn't like to be the one in charge of that). He's in charge of investments because he likes to see the money build up.

The only time I really remember fussing over money was soon after we got married, he thought I was spending too much at the grocery store. I asked him to come shopping with me, and he saw that food was more expensive than he'd thought. He also realized that in his bachelor days he'd gone out to lunch every day, and we'd eaten out frequently while we lived in the city -- those things kept the grocery bill artificially low. Once we were married and moved to the country, we cooked every night. Once he saw the facts, we didn't fuss about that ever again. I really think lack of financial stress is one of the reasons our marriage is successful.

We combined our checking accounts into one. I closed my account, and we had his account re-configured into a join account.

Neither of us had a savings account when we married, but we opened one together when we were setting up the checking account. Years later we opened a second savings account. The original savings account is our emergency money, and the second one is our short-term savings, which we use for vacations, home improvement type purchases, cars, and other large-ticket items. We agree that we cannot withdraw from the short-term savings unless it's agreed upon by both of us and unless it's planned ahead. I highly recommend this two-savings account system.

Neither of us had a credit card at that point. Since then we've opened one account together, and we each have one separate card. His separate card is a work card, which he was required to get for business travel. I got my separate card because our primary card is a Discover (our favorite -- the best rewards!), but everyone doesn't accept Discover.

In your case, I'd suggest that after your marriage, you get rid of most of those cards. You have too many. Your rewards are too spread-out, and individually they'll never add up to much of anything. Consolidate down to 1-2 multi-use cards for the family.

He bought a house the week before we were married. We did that because on his salary alone he qualified for a special program, which reduced our interest rate. That first house was his alone, and when we bought our second house we put it in both our names.

We made each other primary beneficiaries of life insurance and other such things.

When we bought the house, we looked around and found out that my car insurance company would insure the house for the best price. So we bought a policy there, and when our individual car policies "came due", we rolled them all over into one car-and-home policy (cheaper to keep it all together).

We've never worried a bit about credit scores. We've avoided debt, we've saved, and we're in good shape.

 

[J3nn78]

I am of the camp that believes in everything being joint accounts. There is no MY money YOUR money. It is OUR money. We always consult each other in any major purchases or spending. I could not imagine having our money separate. Just seems so untrusting IMO. I am sure it works for some though.

 

[okeydokey]

My husband and I combined our cc into one account when we got married and opened up a joint checking and savings. For years we had the one credit card until he picked up another to use only for work travel. I don't see why we each need a few cards. One will do.

 

[riley2008]

[I, personally, disagree with the advice to keep ALL your banking separate when you get married. You are getting MARRIED after all, and you will be sharing everything else too. Sharing a bank account just makes sense. I honestly feel that couples who do not do so have *some* distrust with each other, or an inkling that their relationship might not last. To me, it seems sad to have separate accounts. It's like you are setting yourself up for the end of your marriage.

If you have misgivings about someone financially, then maybe getting married might not be the best idea. Analyze why his credit is bad. Make sure it's not something that can mess up your life...[/QUOTE]



My DH and I have been married for 15 years and we have NEVER had anything financially done jointly until this past year when we bought our house. (I owned our first one.) We have NEVER had any issues about money either. I'll be the first to suggest separate finances too.

We're not setting up each other for ending our marriage, but maybe we're just being financially savy so that we are prepared if something were to happen to one of us.

 

[Gigi22]

Our pre-nuptual agreement specifies how our finances work--we each have our own bank account that we each use to purchase things for ourselves, and one joint account from which household expenses are paid. The pre-nup. also discusses how we will handle raising children, and each spouse's contribution to the marriage finances during childraising.

 

[2disneyboys]

guess what... all three systems (all joint, or all seperate or some joint/some seperate) work equally well, have thier own pros AND thier own cons.. I"m aware of many happy and broken marriages using one of these 3 systems so obviously the system you choose does not guarantee a successful marriage or a doomed marriage. IMHO The keys to whatever financial management plan you are going to use is 1. Agreement to adhere to 'the plan" and 2. Clear, Open and Constant Communication about the plan

There are lots of arguments about why I do mine this way and you do yours that way and they do thiers that way, and thats why my way is the right way and if you don't do it this same exact way then you are .......... However, the reality is that you have to go with what feels comfortable to you and to him and to the "we" in your marriage. As long as you have very blunt and honest conversations, and work together to set something up, and then continue to review or discuss the plan on a regular basis the arguments you have won't be (always) focused around the money. Money is not something to talk about in vague terms. your definiation of I want to save some $ for xyz and his could very well be different even with the same end goals in mind...Clear communication is very important. A happy marriage is hard enough work without the added stress of financial disagreements. Our marriage is not perfect, and not always easy, but we are happy and going strong (only married 14 years so considered a new marriage to some, but sometimes I would say it's been a long 14 years and others, wow, those 14 years have flown by!) I could tell you what works for us, and even justify those choices, but they may not really work for your realtionship.

As far as the credit cards go, I agree with some of the previous posters the ding your/his credit will take would only be a temp change and would recover quickly assuming you kept with what appears (from what you have said) to be good credit choices. If you (or he, or both) are anticipating the need of a loan in the near future, I would take some time to research the effect of combining & or closing some or any of the cards before I did it. If you choose to keep things seperate, make sure you follow your state laws to ensure the "surviving" spouse can have access to the funds should something bad happen to one of you.

Oh yes, and CONGRATS Chosing to combine your lives I hope will be one of the best choices you make... as long as you remember that being together should always make you both stronger. Good Luck & Best Wishes