8/1/2012 5:38 PM ET|
Your spouse's credit card secret
After a reader pays off a $25,000 bill run up by her husband, she wonders if canceling the cards will hurt his credit score. But there's a bigger problem here.
Q: My husband just informed me that he has been hiding $25,000 of debt from me. We have been married two years. I knew he had debt when we were dating. It was approximately $15,000. We put a plan together, he worked two jobs, and it was paid down. Or so I was told. In reality, the debt shrank to approximately $3,000 and eventually ballooned back up to $25,000. He has been at the $25,000 debt level for one or two years, as he has just paid the minimums.
I have now paid off all of the debt with a lump sum of cash from my checking account. My question pertains to his credit score. He has agreed to not have a credit card again but is concerned about his credit score. The debt was spread over six cards, and I would like to cancel all of them. The last card was opened around 2010. Are there any adverse consequences to closing all of the cards? Any advice you can provide would be greatly appreciated.
A: Your husband spent $25,000, hid the bills and after he confessed, he let you pay it all off with money from your checking account. And the biggest thing you two seem to be worried about now is whether his credit score will take a hit if his cards are closed? I'm arching my eyebrow.
If I were in your situation, I would be more concerned about trust issues in my marriage. You seem to be in the mode of he breaks it, you fix it. He promises to be good; you figuratively take away the car keys. But he is an adult, and there's only so much you can do to keep him from spending money. Whether you close all six of his cards or not, who's to stop him from opening six more next month? Unless you build up financial trust in your marriage, you're headed for trouble.
The good news is that building trust in your marriage is possible; it's been done by many couples who have been through similar situations. For that to happen, however, both of you have to be willing to do two things: 1) start working as a team and 2) practice financial transparency.
Working as a team means you both pull your weight. You don't have to make the same incomes or even both contribute monetarily, but you should have common goals and both be working toward them. A win for one of you should be a win for both.
You can learn to be on the same team by studying personal finance books together or taking a personal finance class. It can even be fun to work on finances as a project together. Not everyone is going to feel that way, but at least you can have a new sense of purpose as a couple.
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Practicing financial transparency builds trust. If one of you is intercepting the mail for any reason other than a surprise present, that trust level goes down.
Transparency does not mean one marriage partner dominates and controls the other. That doesn't work, because people who can't spend anything without getting yelled at eventually rebel. This is where a budget, agreed to by both of you, actually gives you freedom. You agree ahead of time that X amount of money is for groceries and X amount is "walking around" money you don't have to account for at all. Some people have a given amount, say $100, they can spend without consulting their partner. That gives each person enough freedom, without suggesting it's OK to buy a motorcycle on the way home.
To answer your question about whether closing six cards will hurt your husband's credit. Yes, closing all six of the cards at once will lower his available credit and cause his score to go down. Closing them all may not really help anyway, because he can just open new ones. I suggest closing all but two or three of the credit card accounts, just to simplify things. I recommend keeping his oldest accounts open and closing some or all of the newer cards. Then, make sure both of you see the card statements every month. Resist the urge to complain about small items or the statements might go "missing" next month.
Staying out of debt is more important than worrying about a few credit score points you might lose by canceling excess credit cards. Sure, you'll want to keep a couple of cards. But if you take care of your finances first, for the most part, your credit score will take care of itself.
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I will catch heat for this but....
Who in this day and age doesnt protect themselves financially? I get all the love factors but love and finances never mix. With all the statistics (divorce because of infidelity or finances) who would not make any amendments for this kind of behavior! can we say "pre-nup"...
Im not married but as mom says "The person you marry is never the person you divorce"
I would not marry someone who had 15K in credit card debt (thats just irresponsible). Acceptable to me are student loans, mortgage, and car note. These are things that are normal in everyday middle income life. I also would scrutinize my partners finances before saying "I do" as I would hope he would mine. Finances are no joke people...women/men's lives are ruined everyday because of it whether married or not.
My great grandmother (now passed) was born in the early 1900's and her words to me were "get your own and keep your own" that and "a woman can run faster with her skirt up than a man can with his pants down"...LOL.
My advice to this woman is none other than what I would do: RUN to a lawyer and ask for a separation agreement. These can be done so that each party in a marriage is responsible for thier own debt. I would have never paid off his cards with MY money. I also would never put my name on a credit card with someone else..even my husband. Then while separated, demand that he make improvements in his finances showing proof periodically and if no improvement after a year, ask for a divorce. In the mean time get yourself together financially and be ready to divorce. I would also have a prenuptial agreement in place as well.
I would say financial infidelity is worse than an affair. I can recover emotionally but losing money because of someone else is a big no no!
Credit score is not the elephant sitting in the middle of the room. Seriously consider separating your finances now. Entirely. If you have joint debt, either assume complete responsibility for it (mortgage) or pay it off (credit card) and slam the account closed and nail the door shut the minute you do. Separate future finances with a tall brick wall topped with razor wire. Don't open a joint account - at least one of you will have workable credit. You can still live a very lovely life together - the above statements sound like it, but money is not everything and he very well may contribute to the marriage where you lack sufficient skill. The advice of the writer seems to assume that he will have interest in financial reform - but my gut feeling is he will rinse and repeat as long as you bail. AND the sums will only get bigger. As long as he continues on this path, absent your bailout, he'll eventually not qualify to carry a credit card. Prepare to come to the realization you have a financial juvenile on your hands (again, you may be lacking severely in the skills he brings to the marriage and may become savvy enough to handle all household and your finances) and he'll need to hit bottom and may stay there - do not let him ruin you too. I only say you may become savvy enough otherwise you would not have focused on his credit score as the problem, of course it will go down - although, just asking about closing accounts along WITH outlining the rest of the issue could have been your way of illustrating a problem you know exists without actually asking for a resolution. At least you asked something. Do attempt the education route - there's nothing wrong with education. If he does reform, more power to you. If he does not, you are as protected as you can be and your stomach may be better able to weather financial stress. What a waste of $25,000. Extremely expensive lesson - screaming red flags are flapping.
I cant read the message boards because it so full of spam from peole trying to find a date. YIKES! There are some really desparate people out there.
I've been married for 22 years this month. Frankly, I think one of the keys to having a good marriage is to have separate finances. After 2 or 3 years of fighting about money we decided to separate all of the household bills - rent, utilities, insurance, etc - and have separate bank accounts from which we were responsible for paying our share, plus any of our own credit cards or loans. We are listed on each other's accounts, but I don't access his accounts and vise versa. We always based the bills on our individual incomes and we have always been honest and fair and responsible about it.
I guess that's really the problem with the situation in the story above. The dishonesty is the real issue. On what in the world did he spend $13K and she didn't notice the spending??? Lunches and golf with friends? Hookers? Gambling? Good grief! Find a healthy relationship, dear...
Look, there is no great mystery here. He is a user and she is an enabler with no spine. Sorry, to be blunt that's just how I see it.
I had one like that once. He got in a jam and I co-signed for a new truck. A couple months later, another jam and I paid off his credit cards. I finally got tired of it and re-po'd the truck--yes, there are some decent attorneys out there who have a sense of humor and will help you. Still have that truck, keep it as a spare vehicle. Nice to have a paid-off 3/4 ton diesel around when the weather is bad.
I hope she gets some self-esteem and finds a decent man. They are out there. You just have to look beyond the pretty packaging. Good luck and thanks for reading my opinion.
Screw Credit! As one who was once in for $30K on five credit cards I got eaten alive due to the clause the credit card companies added in the late 90s which said if you were late on any utility bill they had the right to raise your interest rate. Well apparently I was late on a phone bill one time and they all came at me with a penalty and raised my 8% to 24% all at once. I was consumed in only being able to make minimum balance due which was equal to my interest due. About $180 per month on each card. With no options I filed a Chapter 7 and have never owned another credit card since. Today my truck is paid off and I only deal in cash payments. The only card I have is a debit card which I keep the minimum amount in my checking account to pay my cable bill and my rent. Other than that it's all cash.
Gone are the days of thinking I needed toys to gain status among my friends. Gone also are the impressive three mountian bikes, two dirt bikes, four pairs of skies, lift kits for my trucks with mag wheels and countless weekend trips to tropical destinations all in the name of credit.
Get the credit monkey off your back! It's the closest one can get to feeling born again without religion..
I had to pay off a 10k "mistake" that my Wife made. She always promises the Moon and lies about her debt.She had no problems letting me hand over all my paychecks when I wanted her to pay the Bills cause I was always working and didnt want to bother with it.
Now I wan`t to have control of paying the Bills and have her give me her paycheck, and she absolutely won`t. And people wonder why I have no ambition and don`t care about making money anymore. it just feels like anything I make she will be blowing on late fees and all the other stupid ways she loses money.
Yeah, everyone wil say, then divorce her and move on...Not so easy when everything you ever worked for is tied up in House equity, and I am closing in on 50 years old with no Career to fall back on...Life is a Bitach and then you die....aint that the farking truth.
I figure if I am just scraping to get by now.
Why bother with it?
I do not want to imagine the hell a credit card could bring.
If you simply pay the minimum it will take years to pay off!
The credit card companies make a killing on people like that..
Many people are in debt because they are not using their card correctly.
I might say that I won't fall into that crowd..but I would have to experience it to truly know.
However, for now that is something I just don't want to do.
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