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Secret cards

imageHiding credit card debt

By Adrienne Gibbs

Sharon always had a hidden stash of money in the closet, something for a rainy day. Then she took things a step further by getting a credit card that her husband knew nothing about. This way, she could purchase clothes online without telling her hubby.

She kept up her subterfuge by being the first one home from work and shredding the bills before he saw them. When paperless billing became available, she opened a Gmail account and had the bills sent there.

Sharon is not alone. There are no hard statistics detailing how many men and women either stash cash in the closet or hide credit card debt from a spouse (or hide such debt from their parents.) But anecdotal evidence and interviews with financial planners suggest that the problem is widespread. A 2008 USA Today/Gallup poll of 1,025 adults recently found that hiding bank accounts and credit cards from your spouse is a huge no-no, with 55 percent saying it is a “major” violation and 9 percent saying it is grounds for divorce. Money magazine in 2005 found that 71 percent of 1,001 women and men with incomes above $50,000 had money secrets.

“I don’t know why I do it,” says Sharon, 35, a Washington, D.C.-area lawyer who did not want to give her last name for fear of being identified by her husband, who is also a lawyer. “I just feel like I need something for me. And I don’t want him questioning what I’m doing or what I’m buying. He doesn’t understand that I like what I like.”

Why they do it
“It’s an emptiness that’s missing between two people in a relationship or emptiness from childhood,” says Bonnie Eaker Weil, a New York relationship therapist often tapped as a guest expert for the Oprah show and author of the newly released book “Financial Infidelity.” She believes that overspending, as well as hiding debt, is indicative of a power struggle in a relationship. Additionally, the act of shopping or spending releases a pleasure drug into the brain, says Weil, who dedicates a chapter of her book to the hidden debt issue. This rush of adrenaline feels good and is difficult to fill with anything else.

“You’re trying to fill up your emptiness by shopping until you drop, or as a man, you do it by betting on the Super Bowl or betting on golf,” she says. This has led some 40 percent of committed couples to lie to each other about money issues ranging from overspending to hidden credit card debt and some 82 percent to hide purchases from each other, says Weil.

The big reveal
Financial advisers and credit counselors say they frequently counsel couples on hidden credit issues. Usually the hidden debt is revealed after the couple finalizes their financial plan and one of them leaves the room to visit the restroom or get a drink of water. Meanwhile, the other has a chance to talk privately with the financial counselor or planner.

“We often get people who call up and will say, ‘Can anybody find out about this?’, and we think they’re worried about their creditors, but they’re worried about their spouse finding out,” says Sandy Shore, a senior counselor with Novadebt, a company that provides financial planning assistance. “Sometimes they’re just overspending. Sometimes it’s a case where when you do a budget with them you find the budget is too short. And more often than not, it’s the woman calling.” Many of the women who call, Shore says, are using credit cards to supplement their household incomes. This happens when a family is living above their means, she says. “She wasn’t spending on luxuries or things like that,” says Shore of a former client. “A lot of items are not covered in the basic budget.” Don’t ask, don’t tell
Then there are people like Brady, 45, of Dallas, who does not want his last name used for fear of his wife finding out his secret spending habits. He doesn’t exactly hide credit cards from his wife, but he doesn’t tell her and she doesn’t ask. Now he’s trying to figure out how to pay for the couple’s mortgage while also paying off a few $500 tickets to Cowboys games — all without discussing the budget shortfall with his wife.

This need for secrecy is usually taught — inadvertently or by example — by a parent or encouraged by a past experience, says Weil. For example, many mothers tell their daughters to keep an account or money on the side. Or a guy who is the victim of a nasty divorce may keep a private post office box so that wife No. 2 can’t figure out how much he earns. Such secrecy can damage a relationship when at least one partner believes that complete trust is necessary to the relationship. Also, current financial times — from the rise in gas prices to the mortgage crisis — may lead people to make unsound decisions while under duress.

“We have trouble dealing with money conflicts due to stress levels that wreak havoc on our chemicals in our brains, causing it to go into overdrive and it affects the brain’s clarity, judgment and decisions,” says Weil. “People lack the skills to deal with the hot-button topics and these emotional stresses affect your decisions and cause damaging behaviors like excessive drinking and drugs. People are feeling very stressed out and instead of having an affair, they’re doing financial infidelity.”

Uncovering hidden debt
Secret debt is often found through accidental ways. Sometimes a spouse is unable to get home first and check the mail, or one of them might forget to sign out of a private e-mail account on the computer. The best way to check for hidden debt is to check out each other’s credit report on an annual basis, say financial planners. The credit report will detail exactly what you both owe. Alternatively, both spouses should be equally involved in paying for the household expenses, says Novadebt counselor Shore.

“It’s a lack of communication between the spouses,” she says. “Sometimes one person has their head in the sand and is not really paying attention to the issue and sometimes the credit cards are only in one person’s name and sometimes they’re in both. A lot of people don’t check, they don’t look.”


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