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Background

My wife is in grad school and has no income. I have a high paying job and all bills are paid from my income from shared bank accounts. We both have high credit scores (> 750) though I think mine is slightly higher. I have 2 credit cards: One that I've had since high school that is unused and I keep open just for the credit history and the other I use daily. She has one card that's rarely used and she's had it for years.

Question

There is a significantly better card for our day to day purchases that we want to get. Neither of us are planning to close any current card accounts. Does it matter who applies for this new card as long as we both have high credit scores? We use each other's cards all the time.

I was thinking she would be better to get it since it would balance the number of cards between us but I don't think it matters that much.

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  • 1-2 cards is a "thin file" for credit score purposes, so be prepared for a dip as the new account hits your credit reports. If you care about optimizing your credit scores, both of you might consider getting to 3+ accounts. – ceejayoz Mar 12 at 0:53
  • @ceejayoz I'm not following your comment. If the "file" is currently thin and needs more accounts, why would adding more accounts lower the score? – TTT Mar 13 at 17:35
  • @TTT For the same reasons a new employee may temporarily lower productivity, but enhance it in the long run. If you have 10 credit cards that've been around for a decade, a new card will only drop the average age down to 9 years. If you only have one, the new card would drop average age from 10 to 5. A thicker file is more resilient to new accounts as a result. – ceejayoz Mar 13 at 17:43
  • @ceejayoz gotcha. I agree the AAoA will become lower. In my experience though, going from 1 CC to 2 typically raises the score, even if one of the CCs has been around for a while. The reason is although the inquiry and AAoA change lowers the score, increasing the denominator of utilization percentage increases the score overall. You're right though, in this case, wife's single card is rarely used and old, so I agree in this case. I'll update my answer to reflect your point. – TTT Mar 13 at 17:52
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It doesn't matter who gets the card. However, the credit limit is oftentimes based on your income. You alone would likely qualify for a higher limit than your wife alone would. Some credit cards allow you to include your household income in the profile, and in that case, your wife would have the option of including your income to get a higher credit limit. In that case it really doesn't matter who gets it.

If you're curious about the affect on your credit scores, the person who has the card in their name will see a slight temporary dip (2-6 months) due to the credit inquiry and reduction in the average age of accounts (AAoA), but once the card reports within 60 days, usually you'll see a credit increase due to the lower overall utilization percentage (assuming your total CC monthly spend doesn't also increase along with it). In general though, you're both doing fine with credit and I wouldn't really think twice about the minor changes in your score. Get the card that makes the most sense for your family.

As ceejayoz astutely pointed out in a comment: my disclaimer in the previous paragraph "assuming your total CC monthly spend doesn't also increase along with it" would not be true if your wife gets the card. She would be going from 0% utilization to something greater than that, and her AAoA would certainly drop. It's possible in her case that her credit score would drop noticeably more than yours would because of adding the new card, at least in the short term. I personally wouldn't let that discourage you though. In the long run taking that minor dip now is actually better for future credit.

Side notes that I always recommend for anyone who has credit cards:

  1. Set up alerts such that you get notified for every purchase made on all of your cards (e.g. text/email/mobile app/etc). This way you won't forget about moving any automatic payments over, some of which may only charge annually. Another advantage of this is if any of your card numbers is ever compromised, you'll find out instantly.
  2. Set up all of your CCs to auto pay (at least) the minimum each month. Still always pay in full, but if you ever forgot to make a payment, you might have to pay interest for a month, but at least you won't have a late payment which could adversely affect your credit for many years.

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