Understanding different types of credit accounts (especially the ones that are opened during a marriage) can help you sneak a peep into the possible pros and cons. There are two types of credit accounts:
The following table will help you understand the difference between them.
|Individual Credit accounts||Joint credit accounts|
|Factors considered while applying||Credit history, income and assets of the individual person are taken into consideration by the creditors.||While opening a joint account the financial information, including the assets, credit history and income of both the account holders are taken into consideration by the creditors.|
|When is such account advisable?||If the concerned person can open an account in his/her own name and presents a strong case to a creditor for loan or credit card.||If the concerned individual does not present a strong case to a creditor then an application that combines the financial resources of two people may present a stronger case.|
|Are Authorized users permitted?||Yes||Yes|
|Are authorized users responsible to pay off the debts?||Only the individual person concerned is liable to pay off the debts. The authorized users can not be held responsible for any outstanding balances.||Users of a joint account are legally responsible for any outstanding balances. In case of marriage both spouses are responsible. The authorized users can not be held responsible for any outstanding balances.|
|Responsibility with marriage/ divorce||Whether married or single, the individual is responsible for paying off the debt on this account.||In case of joint accounts both the partners even if they are divorced are responsible for paying off the debts.|