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Your spouse's credit card secret
8/1/2012 5:38 PM ET|By Sally Herigstad,
After a reader pays off a $25,000 bill run up by her husband, she wonders if canceling the cards will hurt his credit score. But there's a bigger problem here.
Q: My husband just informed me that he has been hiding $25,000 of debt from me. We have been married two years. I knew he had debt when we were dating. It was approximately $15,000. We put a plan together, he worked two jobs, and it was paid down. Or so I was told. In reality, the debt shrank to approximately $3,000 and eventually ballooned back up to $25,000. He has been at the $25,000 debt level for one or two years, as he has just paid the minimums.

I have now paid off all of the debt with a lump sum of cash from my checking account. My question pertains to his credit score. He has agreed to not have a credit card again but is concerned about his credit score. The debt was spread over six cards, and I would like to cancel all of them. The last card was opened around 2010. Are there any adverse consequences to closing all of the cards? Any advice you can provide would be greatly appreciated.

A: Your husband spent $25,000, hid the bills and after he confessed, he let you pay it all off with money from your checking account. And the biggest thing you two seem to be worried about now is whether his credit score will take a hit if his cards are closed? I'm arching my eyebrow.

If I were in your situation, I would be more concerned about trust issues in my marriage. You seem to be in the mode of he breaks it, you fix it. He promises to be good; you figuratively take away the car keys. But he is an adult, and there's only so much you can do to keep him from spending money. Whether you close all six of his cards or not, who's to stop him from opening six more next month? Unless you build up financial trust in your marriage, you're headed for trouble.

The good news is that building trust in your marriage is possible; it's been done by many couples who have been through similar situations. For that to happen, however, both of you have to be willing to do two things: 1) start working as a team and 2) practice financial transparency.

Working as a team means you both pull your weight. You don't have to make the same incomes or even both contribute monetarily, but you should have common goals and both be working toward them. A win for one of you should be a win for both.

You can learn to be on the same team by studying personal finance books together or taking a personal finance class. It can even be fun to work on finances as a project together. Not everyone is going to feel that way, but at least you can have a new sense of purpose as a couple.

Practicing financial transparency builds trust. If one of you is intercepting the mail for any reason other than a surprise present, that trust level goes down.

Transparency does not mean one marriage partner dominates and controls the other. That doesn't work, because people who can't spend anything without getting yelled at eventually rebel. This is where a budget, agreed to by both of you, actually gives you freedom. You agree ahead of time that X amount of money is for groceries and X amount is "walking around" money you don't have to account for at all. Some people have a given amount, say $100, they can spend without consulting their partner. That gives each person enough freedom, without suggesting it's OK to buy a motorcycle on the way home.

To answer your question about whether closing six cards will hurt your husband's credit. Yes, closing all six of the cards at once will lower his available credit and cause his score to go down. Closing them all may not really help anyway, because he can just open new ones. I suggest closing all but two or three of the credit card accounts, just to simplify things. I recommend keeping his oldest accounts open and closing some or all of the newer cards. Then, make sure both of you see the card statements every month. Resist the urge to complain about small items or the statements might go "missing" next month.

Staying out of debt is more important than worrying about a few credit score points you might lose by canceling excess credit cards. Sure, you'll want to keep a couple of cards. But if you take care of your finances first, for the most part, your credit score will take care of itself.

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