Pros and Cons of a Joint Account

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Pros and Cons of a Joint Account

When considering the pros and cons of a joint account, much comes down to how much you want to be financially connected to your partner.

And this can mean, to be quite cold and ruthless about it, can you trust your partner with firstly, sums of money and secondly, do you trust your partner's financial background?

In the good old days, most people opened a joint bank account when they got married. Wages would be then pooled and daily expenses, as well as household expenses, could be catered for from that one account. Nowadays, it's all seemingly a lot more complicated.

Lets look at the pros of a joint bank account first. One of the most often quoted reasons for partners to have a shared account is convenience. One account should mean less paperwork, easier to maintain and keep track off, easier from which to borrow money (more money to leverage than individual accounts), higher interest payments, build up joint loyalty with bank; and, easier to keep secure.

All in all, the joint account has a lot going for it and many people go down this route. And for some, the joint account is often just a way of creating an account from which 'shared' expenses, such as mortgage payments and bills, are paid for in a collective manner; otherwise couples would have to make 'half' payments from the respective accounts to maintain the bills.

There are flaws in this arrangement however and the cons do mount up. One of the main problems is trust. Partners rarely come together in relationships on equal terms. Usually one side of the relationship has more money, or say one is better at saving, whereas the other side might have very little money, or be addicted to spending money. And these flashpoints tend to be more common in more mature people coming together for the first time. Creating an account with someone you barely know, or indeed, don't know much about their background, can be a risk business. Credit agencies are no longer expected to draw links between people by virtue of just their name, or say their address, but they are allowed to draw links between people with a joint financial arrangement, such as a bank account.

So, one person with a blemish free credit history might join up with someone with not such a blemish free record, and hey presto, both will become tarnished with the brush from the riskier party.

This is why most experts urge caution when thinking about creating a joint bank account. They advise to make sure that they are thoroughly aware of the background of the person they wish to create a financial relationship with, in case there are a few skeletons in the proverbial cupboard. It may sound cruel, but unfortunately it's a fact of life.