Whether we like to admit it or not, the long-term success of a relationship can often hinge on issues of money – of which credit cards inevitably play a role. It’s a fact that’s not lost on Canadians, as 89% of respondents to an online Ratehub.ca survey agreed with the statement “it’s important to discuss credit card spending with your significant other.”
The survey, which polled over 1,000 Canadians who are either married, dating or in a long-term relationship, sheds some light on Canadians’ views and opinions about credit cards as it relates to their significant other. Here were some key findings:
- Close to 1 in 4 Canadians (23%) in a relationship are not aware of their significant other’s credit card spending
- Almost half (46%) of Canadians would consider major credit card debt a deal breaker on the first date
- A majority of Canadians (55%) don’t know their partner’s credit score
- 43% of Canadians have a joint credit card with their significant other
- 49% of Canadians said they only have basic knowledge of how credit cards work, yet 61% believe they’re more knowledgeable than their partner
- 86% of Canadians in a relationship said they have never lied to their partner about credit card spending and 89% said they would trust their significant other with their credit card
- 74% of Canadians are more open to speaking about finances with their significant other than their parents, siblings, or friends
Talking (specifics) about credit cards with your partner
Our survey found there’s some dichotomy between people’s views and their actions concerning credit cards.
While an overwhelming majority of Canadians (89%) agree it’s important to discuss credit card spending with a significant other, close to 1 in 4 said they are unaware of their partner’s credit card spending while over 1 in 2 admitted they have no knowledge of their partner’s credit score.
Credit card spending and credit scores can have profound impacts on the financial wellbeing of both people in a relationship – particularly if there are plans to open up a joint bank account or mortgage – and are important points of discussion that shouldn’t be overlooked.
Credit card spending can provide insight into a person’s overall purchasing habits, and can also shed light on whether someone spends more than they can afford and how regularly they carry a monthly balance. A credit score, on the other hand, is a measure of a person’s financial standing and can impact the likelihood of getting successfully approved for everything from rental applications and mortgages to car loans, as well as what the odds are of securing a favourable interest rate.
The bottom line:
It’s critical that couples committed in long-term relationships don’t only discuss generalities but delve into the specifics of their relationship with credit.
By having regular, non-judgemental heart-to-heart discussions about credit card spending and financial goals, couples can take a supportive and proactive approach to addressing money issues, and avoid reactive or emotional confrontations. Waiting for financial problems to arise can lead to emotional arguments, rather than supportive resolutions. As a tip, try to schedule regular “dates” with your partner to discuss credit card spending and come prepared with paperwork, including last month’s bill statements and recent credit reports.
Credit card debt can hurt your dating odds
Credit card debt doesn’t only hurt your bottom line, but can also have negative effects on your dating life.
According to our online survey, almost half of Canadians (46%) said that if it was revealed their partner suffered from major credit card debt during a first date, a second date would be off the table.
The social stigma of credit card debt and its negative effects on one’s dating life isn’t unique to Canada, as a separate survey found that 77% of Americans view credit card debt as unattractive.
The bottom line:
While credit card debt can be daunting, there are many things people can do to squash it. Arguably, the most important step is to create a stringent but realistic budget that can be followed over the long-term. Monitoring daily spending to cut out routine unnecessary purchases can also be an effective strategy to accrue saving over time. Remember, solving credit card debt is a marathon not a sprint.
Sticking to cash instead of plastic for purchases is also a recommended course of action. In instances when using a credit card is a necessity, opt for a low interest credit card to save on fees if you do end up carrying a balance. Consolidating credit card debt on a balance transfer credit card with a lower interest rate can also help make monthly payments more manageable.
When it comes to credit card debt in a relationship, it’s vital that couples avoid judgement or assign blame and instead work as a team to crush debt once and for all. Even if finances are managed separately, tackle the debt repayment plan together through simple strategies such as stocking up on groceries for at-home dinner dates and entering a pact not to buy each other Valentine’s Day gifts.
With the power of two – joint credit cards
The ability to join forces and rack up rewards as part of a single credit card account is a strategy many couples use. Our survey found 43% of Canadians have a joint credit card with their partner.
There are a number of pros to using a single credit card account. For one, if you’re racking up travel points, you’ll be able to accrue points faster for the same loyalty program and streamline the redemption process. In cases where one person in the relationship doesn’t meet the income requirement for a specific card but the other does, opening a single account can also help make it possible for both to gain access to the card.
With all that being said, there are a number of considerations couples should take note of when joining credit cards. First, couples must decide on whether they would like to have a full-fledged joint account (where both partners apply for and have control over the account, sharing responsibility over payments) or add an authorized user (when the account is under the control and responsibility of one person and the other only has permission to use the card for purchases).
The bottom line:
Before couples jump ahead and start using a single credit card, it’s critical both people in a relationship discuss whether a joint card is right for them. Setting up a budget and spending expectations are also key, because without a plan in place, having both partners use the same credit card can lead to money-related arguments and issues managing monthly bills. The good news is that according to our survey, 86% of Canadians in relationships said they’ve never lied to their partner about credit card spending and 89% would trust their partner to use their card – both positive statistics that if answered differently, would be a warning sign that most Canadians should avoid opening a joint credit card.
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For more information about survey findings or to set up a media interview please email Tara Bolger ([email protected]).