While opening a joint credit card is a simple process, closing one can be complicated, especially if there is an outstanding balance.
Closing a Joint Credit Card Account
Closing a joint credit card account can be difficult if the account still has a balance due. Some credit card issuers require the balance to be paid off before the account can be closed. The first step to closing a joint account is to contact your credit card issuer. They will guide you through the steps needed to close the joint credit card account, including whether the balance must be paid off before it can be closed. Even if your credit card issuer allows you to close the account with a balance, the balance will still have to be paid under the original terms. At least the minimum amount due must be paid each month.
Paying Off a Joint Credit Card Balance
With a joint credit card, both account holders are responsible for paying off the charges, even if only one person made them. This can become challenging if you are closing the card due to a breakup or divorce or because one of the account holders can no longer pay their part of the bill. The two of you have to agree on who’s responsible for the balance. This could mean one of three things:
Both of you decide to be jointly responsible.One person assumes all responsibility.One person pays the bill in full with the understanding that the other will repay them in an agreed-upon time frame.
Joint Credit Accounts and Credit History
A joint credit card affects both account holders’ credit histories. Any missed payments will have a negative effect on both cardholders’ credit scores. To protect your credit, you may have to make all the payments on the shared account if the other account holder is uncooperative.
Removing a Name From the Account
Unlike a credit card with an authorized user, you generally cannot simply remove one name from a joint credit card. Most issuers will require you to close the account. Some banks and credit unions will allow the removal of a joint cardholder, similar to the process for an authorized user. However, usually the account cannot be changed until the balance is paid off and the card is closed.
Limiting the Damage
If your credit card issuer requires you to pay off the balance before you can close it, ask the credit card issuer to remove the ability to make new purchases. Once neither cardholder can make purchases that the other person has to pay for, you can be rid of the balance and any joint debt obligation much sooner. Once the card has a zero balance, contact the credit card issuer to confirm the account is closed for good. Be sure to ask that the account not be reopened at either party’s request. It’s also a good idea to monitor your credit report to confirm the account is closed.
What Happens To Your Credit Score When You Close a Joint Account?
Closing a joint credit card won’t remove it from your credit report, but as long as the account is closed in good standing—the balance paid off with no late payments—closing it won’t affect your credit score significantly. Assuming you do not open another card to replace the one you close, your credit utilization ratio (the amount of available credit you have versus the amount you have used or spent) will be reduced. The number of card accounts will also shrink, and the overall age of your credit history may be affected. Generally these changes will only result in small changes to your score, and it should recover in time. If there are any negative items associated with the account, they will fall off your credit report after seven years. In the meantime, keeping up with your payments and minimizing the amount of debt you take on will help protect your credit score.
