There are a lot of jokes that start “A man walks into a bar…” This story, and it is no joke, starts “A woman walks into a store…” Lise, a friend of mine, recently received a rude shock. While paying for her purchase in a large department store, the clerk asked if she would like to apply for a store credit card, and save fifteen per cent on her purchase. Lise had heard this pitch before, but decided that fifteen per cent of today’s purchase added up to a worthwhile amount of money, so she said “Sure.” The clerk took down her particulars, typed them into the computer, stared at her screen for an uncomfortable length of time, and said “Uh, I’m sorry, your application has been declined. It’s probably just a computer glitch, but we won’t be able to do this for you today.”
Lise gave a mental shrug, as she had never really wanted a store credit card in any case, paid for her purchase, and went on her way. But as she drove home, a stray memory surfaced. This same thing had happened to her once before, about five years previously. She began to wonder if there was some problem with her credit history. She and her husband paid their bills on time. They had recently paid off their mortgage. She knew all this because she was the one who wrote the cheques from their joint account. She was a busy professional, with more freelance work than she could accept, a solvent, responsible taxpayer. What was going on?
She told me the story a few days later and asked me what I thought. By this time she was wondering, not if she had a bad credit rating, but if she had any credit rating at all. She had realized, she said, that while the credit card in her purse had her name on it, her husband was the primary card-holder. Where did this leave her?
Like all good storytellers, I am going to abandon my tale at this cliff-hanging moment of suspense. Our heroine Lise, never daunted, has now made an appointment to talk to her bank manager, and is putting in a request for her own credit report. A quick search of the internet has revealed that her status as an authorized user of the card…..just depends, mostly on the jurisdiction where you live. Sometimes authorized users can use the card but the card history has no effect on their credit rating. Sometimes it does affect their credit rating but they are not legally responsible for the debt. If they are what is called joint users, then they are equally responsible for paying off the debt, regardless of who made the purchase.
On many, many aspects of the subject of women and how they manage work and family commitments, I am a devoted fence sitter. Work part-time, work-full-time, stay at home, hire a nanny, find a day-care; I really believe that there are as many valid options as there are moms, and the important thing is to find the one that works for you and your family right now. Things will probably change next year, and that is okay too.
But as Oprah says, here is what I know for sure. I know for sure that you are always better off with one bank account of your own, no matter how small. You are always better off with a credit card of your own, no matter how low the limit. Use it and pay it off, on time, every month. Make sure you and your spouse each has a will, a power of attorney for health care and a power of attorney for financial and legal matters.
None of these things means that you are planning on leaving your husband. They do not mean you are planning to hide things from your husband. They do not mean you are scheming for his demise. They mean that each of you is a responsible grown-up, who may have to function without the other one at a moment’s notice. I know one woman whose husband died in a car accident when her twin babies were just weeks old. Two other women I know – two! – have husbands completely disabled by catastrophic strokes. They are not widows, but have entered a strange legal limbo. For all these women, legal and financial matters have eventually been straightened out, but the early weeks and months following tragedies like these are made much easier if you have your own money, your own credit and clear legal authority to act.
Your own financial identity, including a credit card and a sound credit rating, is a crucial factor in building your resilience to the challenges that life may throw your way. Suze Orman would tell you you also need a savings account with enough in it to cover several months of expenditures. She is not wrong - I just think you should get a credit card first, then start saving. Financial resilience is one more piece of the puzzle - along with the physical resilience that fitness and good eating habits give you, the emotional resilience that good friends and family give you , and the spiritual resilience that a clear sense of meaning gives you. We need them all.
When I got married, I had been on my own for many years, as had my husband, so we each had our own financial identity, and it seemed natural to maintain those identities, while simply adding a joint account to the mix. As Lise pointed out to me, she and her husband met early and built their adult lives together, so everything was established in common. I just suggested to her that in the same way I added a joint account to my portfolio, she should add her own credit card to her portfolio. Not a big deal, but a wise strategy for financial resilience. And we all have things to learn. I am turning fifty in a few months, and, inspired by Lise, today is the first time I have ever checked my credit rating. Three weeks ago I bought my first car. I may become a grown-up yet. Zoom, zoom!