Alleviating a Significant Other's Debt With a Balance Transfer Card

Estimated read time: 5 minutes

For richer or poorer is part of our wedding vows. We all know which we prefer, but you're a team now. If one partner has debt, it affects both of you. Debt can prevent you from reaching shared goals and cause a lot of stress in a relationship. There is a way to help, though.

A balance transfer credit card can be a useful tool when a couple is trying to pay off credit card debt. If you and your partner are struggling with credit card debt, there is a way out.

When to Use a Balance Transfer Card

If you have credit card debt and your credit score is good enough to be approved for a balance transfer card, you should take advantage. The reason it seems your balance never gets any smaller even though you make a payment every month is because of the high-interest rate on most credit cards.

But what if your credit score isn't good enough to qualify for a balance transfer card? Does your partner have a credit score that would allow them to be approved? If so, can they transfer your balance to the balance transfer card?

In most cases, yes. Credit card issuers allow a customer to transfer a balance from a card not their own. Because your credit score takes a small, temporary hit when you apply for a new credit card, if you're not sure if a card allows it, call up and ask before applying.

You might think to keep all finances separate is the answer, but even in that situation, the debt of one partner affects both. It can hamper shared goals like buying a home, starting a family, or starting a business.

How to Transfer a Balance With a Credit Card

Your first order of business is to find the best balance transfer card you can. There are three things you want to look for when you're in the market for a balance transfer card:

Must offer 0% APR period for balance transfers
0% APR period must be at least 12 months
Must have a reasonable balance transfer fee, 2% or less is ideal

Once you find the right balance transfer card, the person with the better credit score can apply. If approved, the rest of the process generally happens automatically. You fill out the information for the card you want the balance transferred from including the account information and the amount you want to transfer.

Once that is complete, the issuer of the balance transfer card takes care of the rest. The holder of the card you're transferring the balance from typically does not have to contact the card issuer.

Depending on the credit limit on the balance transfer card and the balance on the old credit card, you may not be able to transfer the entire amount. If you can transfer the entire balance, this does not mean the card is closed.

You can close the card once it has no balancing remaining, but keep in mind closing any credit card hurts your credit score. A much better strategy is to put a small, recurring expense on the card, like your gym membership, set it up for auto-pay, and then cut up the card.

If a card goes too long with no activity, the issuer may close it. Even one monthly charge on the card will keep the account open.

Why and How to Rid Someone Else of Debt

Issues over money are among the leading causes of fights between couples, and it's no secret why. Money is stressful when dealing with only your own. Throw someone else and their finances into the mix, and the stress can increase exponentially.

When two people are dealing with credit card debt it can be especially contentious. Student loan debt and medical debt we can understand, but credit card debt is often (but not always) a result of irresponsible spending. When one partner is a spender and one a saver, the saver can feel especially resentful that their partner is in this situation.

You might think to keep all finances separate is the answer, but even in that situation, the debt of one partner affects both. It can hamper shared goals like buying a home, starting a family, or starting a business.

It's easy to see why one partner would want to help the other to rid themselves of debt, and a balance transfer card can do that.

When the balance is transferred, the amount is not accruing interest for the introductory 0% APR period. That's why we advised you to find the longest introductory period possible. During this period, every penny you pay towards this debt goes to the principal because there is no interest.

Being able to pay down the principal without being charged interest is the magic formula that makes a balance transfer card such a great tool for alleviating a significant other's debt. Over time, the amount we pay in interest can far exceed the amount we actually charged on a card.

The two of you must do everything you can to pay off the entire balance before the introductory period ends. That means finding extra money by cutting expenses and using any "surprise" money you get from things like holidays, bonuses, and your tax refund. Do not under any circumstances make any additional charges on the balance transfer card until the entire balance is paid. That defeats the purpose of getting a balance transfer card.

When the introductory period ends, any remaining balance left on the card will be subject to the new APR which could be higher than the rate on the old card. Do whatever you have to in order to pay the balance off before the new APR kicks in.

Should You Do It?

Alleviating a significant other's debt with a balance transfer card is a great personal finance strategy, provided you follow a few guidelines. We do not recommend doing this for anyone you are not in a legally binding relationship with (i.e. married to).

Yes, some people consider a marriage certificate "just a piece of paper," but it comes with certain obligations, some of them financial. If you do this for someone you're not married to, they can split at any time, and you will have little to no recourse to recoup your money.

If your partner got into credit card debt due to something like medical expenses, fair enough. Medical care is essential and expensive, but if they simply bought things they couldn't afford, that's different. If that's the case, consider agreeing to do the balance transfer for them on the condition that they cut up the old card, and do not make them an authorized user on the new card.

Used well, a balance transfer card can be a huge step on your path to being debt free as a couple and allow the two of you to work toward your shared financial goals.