Why Separate Credit Cards?
If you are divorcing in Nashville, TN and beyond, you need to understand if you are the primary card holder or just the authorized user for any credit cards you are currently using. You can obtain this information by calling the credit card company directly (their phone number is on the back of the credit card) or from your credit report. You can obtain a free credit report once a year by visiting www.annualcreditreport.com. Why is this information important? Because if you and your ex-spouse remain as authorizer users for the credit card, you will be liable for any charges your ex-spouse makes on the card post divorce (if they don't pay the bill). By the time you realize that your ex-spouse is not paying their bill, their lack of prompt payment has already potentially lowered your credit score. A lower credit score can negatively affect your ability to get financing to purchase a new home post-divorce or refinance a mortgage. A lower credit score can also disqualify you for the best interest rates and terms for a mortgage.
If you and your spouse are both listed as joint users of a credit card, you'll want to either have your name or your spouse's name removed from the card. You don't always have to close the credit card account. In fact, closing accounts can actually lower your credit score in some instances. Call your credit card company to determine if you can have your spouse removed from the card or will need to close the account. If you must close the account, ask how this will impact your credit score. It may be necessary for you inquire about raising the credit limit on one of your other credit cards to negate the impact of closing a credit card account.
During a divorce, you need to self-educate about your credit score and a myriad of other financial issues to ensure you get a financially smart divorce.