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Credit Accounts

Different types of credit accounts

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:

  • Individual
  • Joint

The following table will help you understand the difference between them.

 Individual Credit accountsJoint credit accounts
Factors considered while applyingCredit 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?YesYes
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/ divorceWhether 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.