How to Assess Your Credit Card Needs After Divorce
Use the divorce to your best advantage by being mindful of your own money and what you and your ex jointly spent. Now that you’ll be managing finances for one, your budget may shift depending on your current lifestyle and what changes you choose to make. If you shared a joint credit card account, you’ll have to decide if one of you is willing to keep it open or close it altogether.
If there is debt involved in either people, it’s best to seek a financial advisor that can also guide you on how to best maintain a sustainable living and good credit.
Of all the things that need your attention after a separation or divorce, credit cards are probably low on your list. But making the right moves early on can set you up for a smooth return to managing credit as a single person.
In a recent survey by the Experian credit reporting firm, 50% of divorced people surveyed said their former spouse ran up credit card debts on joint accounts, and 59% said finances played a role in their divorce.
To get started on the road to financial recovery, you need to get a handle on the accounts you have and evaluate your credit card needs.
Don’t worry — we’ll walk you through the process.
How many accounts do you have?
Even if financial infidelity — dishonesty in the handling of joint money — was not a factor in the breakup, it’s still a good idea to be aware of all the credit card accounts with your name on them. You can request a credit report from each of the three credit reporting agencies once a year for free. You can also sign up to get a free credit score from NerdWallet.
Go over those reports carefully. They’ll show a complete list of your credit cards and loans, along with each account’s status. The account balances shown on the credit report may be a little out of date. To get current balances, you may need to log in to the online accounts or call the credit card issuers.
Once you know what’s there, work with your ex to figure out who will be responsible for which accounts.
Who keeps the existing credit cards?
The impulse may be to close all the shared credit card accounts and start from scratch, but consider the implications before cutting up the plastic.
The average age of your credit card accounts is part of how your credit scores are calculated. Older accounts, especially if they’re in good standing, are valuable for boosting the average age of accounts.
So consider removing one person from each account and letting the other keep it open. The easiest way to do this is for the primary account holder to keep the account and revoke the other person’s authorized user status. Even if it’s a joint account, the issuer may still be willing to remove one of the account holders.