Is Everyone on a Checking Account Responsible for All Transactions?
- When you open a joint account with a spouse or another person, you are both taking on a certain amount of responsibility. To do this, you must have faith in the other person, as both of you will be responsible. When one person on a joint checking account engages in a transaction, it affects the other account holder in the same way. This means that when you open an account with someone, you give her some power over your financial future.
- One way that another person's transactions could negatively affect you is in the area of insufficient funds charges. For example, if the other person on your account writes a check for more money than you have in your account, it could cause you to be charged an insufficient funds charge. This charge will be deducted from the future deposits of your account, regardless of who wrote the check that overdrew the account. Because of this, it is essential for both parties to work together to keep track of the actual account balance.
- When you have a joint checking account it also can make you partly responsible when she bounces a check. Besides the insufficient funds fees from the bank, the merchant the check was intended to pay may not accept checks from your account any longer. Even if you did not write the check, your name is on the account as a user. This means that if you try to write a check to this merchant in the future, your purchase may be denied.
- Before opening a joint account, consider the potential issues that could come with it. In addition to the added responsibility of the financial transactions, it can also lead to issues in the future. For instance, if you ever need to close the account for some reason, you will need to get the permission of both people on the account. It can also lead to issues when one person dies and creditors try to collect money from the estate.
