Secondary credit card user a nobody

Garry Marr, Financial Post

It was a bit of a shock to Brenda Harfield when she tried to order something on her Sears card and was told to get her husband, if she wanted to complete the transaction.

“I cut that card up and told them that everything that comes from them goes into the garbage,” says the Sydney, B.C., resident.

Her wrath was wrongly directed at the retailer but you can’t blame her. She handles all the paperwork in the household but the credit cards were in her husband’s name. Or at least they used to be.

She discovered like many woman do that being an authorized user on a card has its limitations. It’s not just a lack of access to the account for certain transactions, the account also doesn’t exist in terms of your credit history.

“Since all this happened I am the primary card holder on all of them” says. Ms. Harfied.

Smart move. My wife found this out the hard way when she applied for a card and was turned down. She came home fuming and blaming me. She immediately switched about half our credit cards to her name as the primary card holder, in an attempt to improve her credit rating.

It worked. TransUnion LLC — one of two companies providing credit ratings in Canada, the other being Equifax Inc. — agreed to let her check her rating for free after doing the same for me last month and she scored 783 out of 900, just below the 786 I received.

She also discovered the credit issuer considers her hyphenated married name an alias, but that’s another column.

“If you are a secondary credit user, that doesn’t give any credit data. If you are contractual borrower or a co-signer then you could get a credit report in your own name,” says Tom Reid, director of consumer solutions for

He says about half of the consumers that are checking on their credit report with the company are women. “You see more and more women trying to get access to credit and they want to understand more about it,” says Mr. Reid.

There are some serious risks for women who hand off responsibility for their credit to their husbands, says Robert McLister, editor of Canadian Mortgage Trends.

“If it’s a joint card, creditors will report that card’s repayment history to the credit bureaus for both co-applicants,” he says.

“Women who are joint cardholders sometimes relinquish payment responsibility to their husband, which can backfire if the husband doesn’t pay responsibly. We’ve seen cases where a wife separates from her husband but forgets to cancel her name off a joint account. The husband then racked up the card or missed payments, without the wife ever knowing. In those types of cases, the wife typically finds out after it’s too late and/or after the file has gone to collections.”

Certified financial planner Jeanette Brox said she recently met a client whose mother had never had a credit card until five years ago and then found herself in trouble when her husband landed in hospital.

“I think I heard about this in the dark ages but it’s hard to believe it exists,” says Mr. Brox.

She’s actually been dealing more with debt consolidation the last few years and one good thing about those spenders, they always make sure they have their own credit card in their own name.

“I have also seen a real determination of the woman to have her own card,” says Ms. Brox, adding she still has her share of clients where the man is listed as a primary card holder or the only person on the mortgage.

The ultimate irony might be where the woman is running the financial household but in her husband’s name. “The wives are usually the generals running things,” the financial planner says.

Ms. Brox adds, however, that’s not good enough when you consider the percentage of marriages that end in divorce. It really makes sense for women to establish their credit.

“I like to have the woman have her own name on things,” she says.

So do the credit rating agencies.

– from February 11, 2011 Financial Post

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