If you are a military spouse, it may seem a lot simpler to just keep the family’s financial business in the active duty service member’s name. But, by doing this, you are missing out on some of the benefits by having and managing your own credit, separate from your spouse’s.
And while many couples do choose to combine their finances when they marry and that might even be a good thing, many financial experts agree that it is essential that military spouses keep their finances at least a little separate- their credit.
Regardless of whether you keep your money entirely divided or mix everything together into joint accounts, it is still really important that both partners establish their own credit histories and maintain good credit scores.
This is because having your own credit and credit histories affects your daily lives more than you think. From renting a house, getting insurance, getting a new job, and even setting up utilities. Additionally, there are also some special reasons why having your own credit can be even more beneficial for military members and their spouses.
Security Against Fraud
You might not think it, but credit fraud is actually pretty common. One lost wallet or stolen Social Security number can affect the entire family’s finances- especially if all their accounts are joint. By having a separate credit, and credit accounts, the family can continue to function even if one partner had their accounts compromised, which often leads to the closure of their accounts.
As mentioned before, there are reasons why having separate credit and credit accounts can be more important to military families. Here are some examples:
Military personnel, especially those who are living far away from home, do not always have the option to go to a driver’s license agency in person in the event it is lost or stolen. A separate credit account will let the military victim of a lost or stolen license order a new driver’s license from their home state without having to wait for new credit cards to arrive.
Usually, military families live overseas. and this fact can be extremely challenging if you use U.S. credit cards when you are living in a foreign country. In some cases, credit card accounts are frozen if used overseas due to the simple fact that the credit card issuer suspects fraudulent activity. Having separate credit can help when you are living abroad when your spouse’s accounts get frozen.
Combatting fraud and identity theft is hard enough as it is, and add the complexity of getting Deployed, you have a recipe for disaster. If you are somewhere with very limited communications, it could take months to fix instances of fraud or identity theft. Fortunately, life will go on at home if your spouse has their own credit.
More Credit Card Benefits
Did you know that many credit cards with amazing travel rewards and benefits waive their annual fees for military members, as well as their spouses? Well, they do! For instance, the Chase Sapphire Reserve and the American Express Platinum Card, which both have a $550 annual fee, exempt military members and their spouses.
Meaning, by having your own credit, separate from your military-member spouse, you can receive double the credit card benefits by each having the same credit card. And having separate accounts means you can qualify for twice as many rewards, such as Uber rides, airline credits, hotel upgrades, and other benefits.
Military families know just how important it is to be prepared for anything, and that includes the possibility that one partner will be injured, become ill, suddenly pass away, or even that the couple will separate or divorce. In all these situations, both partners will find life, especially finance-related, less complicated if they have maintained their separate credit.
While we do not wish this on anyone, It is sad and frustrating when one partner suddenly needs to function on their own but does not have the credit history to support the things they need, such as a loan or credit card.
And yes, while Joint and authorized user accounts may help you build a credit file, if the primary account holder dies, you may no longer be allowed to use the account. Furthermore, If you get divorced, you or your ex-spouse may request that you be removed from the account, and it will no longer factor into your credit history.
That is why it is important that you establish your own credit. This is because individual accounts will be reported to your credit profile for as long as they are open, and for several years after if you decide, for some reason or otherwise, to close them.
The Bottom Line
Military spouses are often unemployed or underemployed at a much higher rate than their civilian counterparts. However, being unemployed or underemployed does not and will not affect your ability to apply for credit. Meaning, there is absolutely no reason why you cannot and should not establish your own credit.
If you are a military spouse and you have neglected your credit for a while, you may find that it is not in the best of shapes. Obtaining credit largely hinges on the quality of your credit profile as well as your credit score. Let us help you breathe new life into your credit. Call us at 888-799-7267 to schedule a Free Consultation.
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