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 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. |