Ask Liz Weston

Get smart with your money

Credit Cards

Q&A: Co-owned credit cards are great … if you can find them.

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Dear Liz: Recently you recommended that both spouses have a credit card on which they are the primary account holder. Another option is for the spouse to apply to be a co-owner of their current credit cards. This worked for me when my husband passed away five years ago. The bank canceled his access, but left mine intact.

Answer: Few credit card issuers offer joint accounts these days. Most are set up so one person is the primary account holder, with the option of adding other people as authorized users. That’s why it’s important to make sure each spouse is the primary account holder on at least one card because the authorized user’s access will probably end when the primary account holder dies.

Q&A: Til death do your credit part?

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Dear Liz: My wife and I have credit cards where I am designated as the primary account holder. What happens to my wife’s access to the account should I pass? Should she now apply for credit cards where she is the primary holder?

Answer: Credit card companies typically close accounts when they learn of the primary cardholder’s death. (It’s usually the executor’s job to inform creditors of the death, but card issuers also learn of deaths from the Social Security Administration.)

So it makes sense for both spouses to have at least one or two cards where they are the primary account holder. If you die first and all the cards are in your name, she might have to scramble to get replacements.

This week’s money news

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This week’s top story: Smart Money Podcast on unlocking financial opportunities for women. In other news: How the next generation will use credit cards, weekly mortgage rates decline, following the rate of inflation, and grocery prices tick back up in lates inflation report.

Smart Money Podcast: Unlock Financial Opportunities for Women: Jean Chatzky on Investing, Negotiating, and More
Learn about salary negotiation and investing strategies and how they can be especially helpful for women facing unique personal finance challenges.

How the Next Generation Will Use Credit Cards
The classic wallet will be as outdated tomorrow as typewriters are today.

Weekly Mortgage Rates Decline, Following the Rate of Inflation
Mortgage rates fell in the week ending July 11, with fixed rates seeing their largest week-over-week drop since May.

Grocery Prices Tick Back Up in Latest Inflation Report
Grocery prices are up 0.1% in June, according to the consumer price index.

Q&A: My kids grew up. Will their credit scores go down?

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Dear Liz: Many years ago I took out a credit card to pay for my two children’s college expenses. They were authorized users for miscellaneous expenses. They no longer use or even have access to the cards. Now they are both in stable, well-paying jobs. I would like to keep the card but remove the authorized users. How would this affect their credit scores? Or mine, for that matter?

Answer: You helped your kids establish good credit by adding them as authorized users. Removing them won’t affect your credit scores. The effect on their scores depends on how well they’ve managed credit on their own.

The impact should be minimal if they’ve continued to build credit by opening their own credit cards and paying those on time. Ideally, for credit-building purposes, they’ll also have a solid history paying an installment loan, such as a mortgage, student loan or auto loan.

If they haven’t used credit much and have a thin file — generally, fewer than five accounts showing on their credit reports — the damage might be more significant. If that’s the case, you may want to delay removing them as authorized users while they open other lines of credit. They should know that they don’t have to carry debt to have good credit: Just using credit cards lightly and paying the balances in full should do the job.

This week’s money news

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This week’s top story: Weekly mortgage rates dip, home price gains soften. In other news: New digital nomads on the block: families, why you should consider train travel in Europe, and 3 steps to take after transferring a balance to a new credit card.

Weekly Mortgage Rates Dip, Home Price Gains Soften
The drop brings the 30-year fixed rate to about where it was two weeks ago and slightly under May’s monthly average of 7.01%.

There Are New Digital Nomads on the Block: Families
As the cost of living rises in many places, full-time family travel can cost about the same as staying put.

Why You Should Consider Train Travel in Europe
You can easily travel through Europe by train because of its well-developed route network.

3 Steps to Take After Transferring a Balance to a New Credit Card
Moving the debt is just the first step. Have a game plan for paying down the balance before the interest-free period ends.

Q&A: Is getting old reason enough to cancel some credit cards?

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Dear Liz: Recently, someone asked if closing a credit card would be worth the hassle and you responded that there is no compelling reason to do so and in fact, it might hurt your credit scores. As an older person, I can think of two good reasons: theft and fraud. Many of us of a certain age no longer carry a mortgage or other debt. But, I am finding it harder to keep track of my finances. I would like to cancel three of my five credit cards for that reason.

Answer: You misquoted my response. What I actually wrote was, “If there’s no compelling reason to close a card, you might consider leaving the account open and using the card occasionally to prevent the issuer from closing it.”

Wanting to reduce your risk is reason enough to close a card account. All of us would be smart to consider simplifying our finances as we get older, says Carolyn McClanahan, a certified financial planner and physician in Jacksonville, Fla.

You also might think about who could help you manage your finances as the task gets more difficult. A legal document called a power of attorney allows you to name a trusted person to take over should you become incapacitated. You can familiarize this person with your finances and consider giving them online access to your accounts so they can help you spot fraud, theft or missed due dates. Involving them now, when you can help guide them, is generally better than waiting for a crisis and hoping they can figure everything out on their own.