There are several ways to transfer responsibility for a credit card balance from one person to another. While someone could certainly pay your credit card debt on your behalf with a bank account, transferring ownership of the debt itself is more complicated. In order to address the mechanics of transferring a credit card balance to your partner, we should first address some fundamentals of a traditional credit card balance transfer.
What Is A Credit Card Balance Transfer and How Does it Work?
A credit card balance transfer means moving debt from one credit card to a new balance transfer credit card, usually with better terms and a special introductory interest rate. Balance transfers most often come with an attractive 0% interest rate for a preset number of months.
This offer incentivizes borrowers to move debt from one lender to another.
The lender that offers you the new card and terms typically charge a balance transfer fee of 1% to 3% of the total balance. For example, if you transfer $10,000 in credit card debt to a new card with a 3% balance transfer fee, it will cost you $300 that will be added to your principal balance.
- Take advantage of a low or no credit card interest during the introductory period
- For a limited time, more of your monthly payment will go toward your principal balance
- Consolidate multiple lines of credit card debt into one monthly payment
- Qualify for better credit card terms that will save you money
- Pay down your credit card debt faster
If you want to transfer a balance you will have to apply for a special balance transfer card. Most lenders will not allow you to make a direct payment from one credit card to another, so there is no way to circumvent the balance transfer fee. However, the benefits of most balance transfer cards more than make up for the fee, provided you pay down as much of the debt as possible during the low or no interest introductory period and do not miss any payments.
The Credit Score Requirements
Balance Transfer offers are not available to borrowers with credit scores below 670.
Transferring Ownership Through a Balance Transfer
If you wanted to assume responsibility for someone else’s debt, you could have their debt transferred to your name by applying for a balance transfer card that moves the debt from the old card to a new one that you control. If the lender didn’t allow this, it may be possible to apply for a joint account. In this instance, you would apply for the balance transfer card together before moving the old credit card balance to the shared account.
Adding an Authorized User or Transferring Ownership to and from a Joint Account
If you want to give access to a line of credit to another person you can ask the lender to add them as an authorized user on the account. In this arrangement, the authorized user can use the credit card but the primary account holder is still legally responsible for paying the debt.
If you want to share responsibility for debt with someone else, you will need to get a joint account. You can apply for a balance transfer card together if you intend to share an existing line of credit. Both parties will need to meet the application requirements* for the Balance Transfer Card in order to be approved.
*In order for a creditor to add or remove someone from a joint account or as an authorized user, you must have approval from all parties involved.*
If You Live in A Community Property State
States with community property laws include:
- New Mexico
Under the law in these states, legally married couples could be jointly responsible for any new debt acquired during the marriage – even debt that is only held in one partner’s name. Therefore, creditors could put liens on joint assets, like a home, for delinquent debts in either partner’s name. Spouses are not responsible for debts acquired before the marriage unless they transfer the balance of a new card or get a debt consolidation loan.
Any type of debt consolidation or balance transfer that involved taking on new debt to cover old debt would cause the pre-marriage debt to become community property.
The Benefits of Transferring Credit Card Debt to Someone Else
People who have merged their finances, or intend to do so, usually begin with a game plan to pay down high-interest debts as quickly as possible. This can open doors to homeownership and other financial milestones like saving and planning for retirement.
For example, If one partner has ample credit card debt and a low credit score and the other partner has a high credit score and substantial income, transferring the debt to a more creditworthy partner could allow the debt to be transferred to a balance transfer credit with a great introductory offer.
Talk With Your Partner About Your Budget and Options
Depending on where you live, transferring your balance to your partner is doable, but might not be necessary if you look at other debt relief options. You’ll want to weigh the benefits carefully before you invest time applying for new cards. Anytime you consolidate debt or make significant changes to how it is managed you’ll want to make sure that you are operating within your budget which will require open and honest communication between you and your partner.
Talking with your partner about money may seem stressful at first, but once you are in the habit, it can strengthen your relationship and future together.