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3 joint credit card myths

joint credit card myths

Good morning loves.  Today we are chit chatting about love and credit cards.  I have a friend named Julie who just got engaged. Yep another 30 something year old woman is getting engaged and it’s not me.  As I sat across from her at lunch at our favourite Japanese restaurant she told me all about how her husband-to-be asked for her hand in marriage in a botanical garden.

They spent the day walking hand in hand through romantic gardens, Julie loves flowers. They stopped to grab some cold lemonade when her fiancé dropped his money while he was paying for their drinks.  As he got up instead of having change in his hand he had a diamond ring.  I swear that’s what happened…I couldn’t make this up if I tried.

What to do about joint credit cards when you get married

After I listened to Julie talk about what a surprise her engagement was and how excited she is to get married her tone suddenly changed.  Her face lost the smile and she asked “Now what do I do about money?”

This is a common conversation among my circle of friends.  As a financial planner I am the one my friends turn to for financial advice.  However I rarely give my opinion because I don’t like to mix family and friends with money.  But that doesn’t stop them from asking.  All I can do is tell them the pros and cons of joint credit cards and let them make their own conclusions.

Don’t get fooled by these 3 joint credit card myths:

1. Only one person is responsible for the debt.  When it comes to joint credit cards many people think only the primary cardholder is responsible for repaying the debt.  This is not true.  A joint credit card means that each person is individually responsible to repay the debt in full.  Some people also think that each person is only responsible to repay half of the outstanding balance, once again this is not true.  At any time the credit card company can ask either credit card holder to repay the balance owing in full.

2. You don’t need to manage it together.  This couldn’t be further from the truth.  Joint credit cards have credit limits and it’s important to manage your spending wisely so each person in a couple is aware of what purchases are being charged on the credit card.  This helps avoid overspending and makes sure the monthly payments are manageable.  Could you think of anything more awful than having your credit card declined because your spouse is overspending? How embarrassing.

3. All purchases have to be used by both people. I know some couples who only use their joint credit cards to buy things that are used by both people in the couple.  But this doesn’t have to be the case. As long as both people understand they are responsible for the debt and you manage the spending together to make sure you can afford to pay off the balance each month it shouldn’t matter who is spending what on the joint credit card.  The key to merging your finances is to be open and honest about your spending.

 

Photo by Flickr

How to get freebies from your credit card

Amex

Good morning Loves.  Let me ask you a quick question, what is your biggest expense each month?  For most of us it’s probably our mortgage payment or rent.   Or maybe it’s your car payment or your grocery bill.  Either way they are all big expenses.  Now think about if you could get some of that money back every month, wouldn’t that be great!  Well you can with cashback credit cards.

I have had my share of financial troubles in the past, from over spending to living on credit and accepting way more credit card offers in the mail than I could afford to pay off.  I try to avoid all those bad habits now that I have my financial life in order.  However, the one habit that I still believe in today is getting as much bang for my buck as I can.  This used to include signing up for credit cards just to get free gifts and transferring my accounts to a new bank just to get the service charges waived for three months.

Changing your financial life to get a free gift or service is just a gimmick and it can end up costing you a lot more money in the long run.  Now I still get bang for my buck but I do it wisely and consistently with cashback credit cards.

3 reasons I love my cash back credit card

You are rewarded for all your purchases. Sure it’s great to get a free tablet when you open a new credit card or get a free toaster when you transfer your bank account.  However those gifts only reward you for a one time action.  Cashback credit cards allow you to earn rewards on all your purchases.

Some cashback cards even give you more  cashback on certain purchases such as groceries and gas purchases. It’s a great way to get cash back on some (or all) of your everyday expenses.

You earn rewards consistently.  Cashback rewards are not just a onetime item that you get at sign up or upon approval.  With a cashback rewards card you get rewards consistently every day, all day with every single purchase.

In my opinion this is a way better financial advantage than just getting a toaster one time.  I didn’t know it back then but now I know getting rewards consistently over time is a better financial benefit than getting a onetime reward.  That’s one thing I have learned over the years of paying for my financial mistakes…always think long term when it comes to your money.

Cashback is only one of the rewards.  Many credit providers such as American Express, Visa and MasterCard offer cashback rewards along with other perks such as travel insurance.  American Express in particular is known for their excellent travel rewards and loyal member services.

On top of cashback rewards your credit card may also offer travel insurance, baggage insurance, fight delay insurance.  It can also offer other types of travel benefits such as upgrades and access to airport lounges.  Of course the rewards offered depend on the type of credit card.  That’s why it’s important to read your service agreement or call your credit card provider to learn all about the rewards offered.

Photo from Flickr

 

 

Are you thinking about retirement?

Italy

Good morning Loves.  I don’t know what it is about this time of the year but I always re-evaluate my life.  Do you ever check yourself?  I do it every year during the summer time, in October around my birthday and of course in January when I start getting the winter blues. I like to plan everything in my life from money to vacations and for some reason retirement just never seems to make it onto the list.

Are you planning for retirement?

I save for retirement and I often use my employer’s retirement calculator to make sure I stay on track to retire at 61, yet I don’t consider retirement on my list of personal or financial goals.  Maybe I’m not focusing on retirement as a goal yet because there are several other things I want to do before age 61.

I want to go to Italy, I want to be on a game show – preferably The Price Is Right and I really want to learn how to speak Spanish.  I am saving for retirement, but I’m not really planning for it.

How much do you need to save?

I know as you read this you are probably thinking…WOW she’s going about this all wrong.  But I don’t think so.  I believe in enjoying your money.  I don’t want to retire with a bunch of money and not be able to enjoy it for health reasons – or any other reasons.

I believe in saving for what I want, but I don’t believe in scrimping on my life now in order to save for the future.  I save what I need to for retirement and not a penny more.  Of course I could retire earlier if I saved more now, but that would mean I would be missing out on things that I want to do now in my 30s and I’m just not willing to give that up.

What are you saving for?

Maybe your number one financial goal right now is retirement and maybe you are putting every single extra dollar you have towards your future.  That is a great financial goal, but think about what you are giving up in the short term.  Don’t get me wrong, I am all for planning for the future, I just don’t think retirement should be your only goal…at least it’s not for me.

The key to having multiple savings goals is to find a balance between the short and long term.  No one says we have to have only one goal, so why not set several goals to make you happy in the short term while saving for retirement at the same time.  You can maximize your employer retirement and savings plans and set up automated transfers from your checking account to your savings account.  This ensures your savings fit right into your budget.  If the money is transferred from your checking account to your savings account before you even wake up on pay day you won’t even know it’s gone.  If savings don’t infringe on your lifestyle you are more likely to stick with them.

What are your financial goals?

Photo from Flickr

How far would you go for a good deal?

Grocery store

I admittedly love a great deal just as much as the next girl, the question is how far would I go to save a few bucks?  I may not go out of my way to get a good deal, but I rarely pay full price for anything.  I think paying full price for anything from clothes to travel is a complete waste of money.  That’s why I use discount websites such as Priceline to book my hotels and I don’t shop unless there is a sale or I have a coupon.

I never pay full price

I hate paying full price for anything, it feels like personal defeat.  I love finding the items I need on sale, it’s a natural high.  If I need something and it’s not on sale (right now I am looking for self tanning cream) I will keep checking flyers and wait to buy the item when it’s on sale.  If the item is at a common place like a pharmacy I will stop in at other pharmacies on my way to check if my item is on sale, but I won’t actively search for it.  I figure it will eventually be on sale somewhere.

If I’m in the mood to shop I will visit my favourite stores and check the sale section to see if anything catches my eye.  I usually love a lot of items in the store but I rarely buy anything in the new collection because I don’t want to pay full price.  I have been waiting two months for a blazer to go on sale and as of now I am still waiting.

Did you get it from your parents?

I get my money saving habits from my parents. My mother buys clothes in mass quantities, but she always gets them at a really great price.  She will pick up a pair of shorts or a blouse if she likes them and if they are on sale.  She rarely tries clothes on in the store and therefore usually makes a trip back to the store the next day to return her items.  This is something I never do.  I always try on clothes in the store because I don’t want to make a second trip if I don’t have to.

My dad is similar to my mother in that he always looks for deals – ALWAYS.  However my dad is what you would call a bulk shopper.  If he finds a good deal he will buy every single item they have until the shelf is empty.  My dad shops not so much for clothes as he does food.  My dad goes grocery shopping two or three times a week because he just really loves going to the grocery store.  If my dad finds a good barbeque sauce for $0.99 he will buy 15 of them and give them out to family and friends.  That’s the type of shopper he is.

Photo from Flickr