We cannot stress enough to you that becoming a cosigner on someone else’s debt is a terrible idea. However, parents do it all the time for their older kids going to college and looking to take out student loans, buy their first car or take out a loan. One thing that many parents do not do, however, is cosign a credit card for their students. Why? Most credit card issuers do not allow you to take out a credit card application with a cosigner. However, it’s our opinion that if you are going to saddle your name to debt belonging to someone else, it’s someone with a credit card rather than a very expensive car loan or a life-changing student loan. It doesn’t matter if you are cosigning for someone who needs to build their credit or looking for someone to cosign for you so that you can rebuild your credit; it’s not a good idea.
That’s not going to stop you, though, so it might be beneficial for you to know precisely which credit card issuers do offer a credit card cosign option; many don’t and finding one that does is often a difficult task. If you are a parent looking to cosign a credit card application for a student, beware that many cards do not offer this option. It might be a more financially wise decision to simply add your student as an authorized user to your credit card account where you can monitor spending and be in charge of your own credit history. On that note, these are the few credit card companies happy to allow cosigners for credit cards.
- Bank of America
- Discover – what is interesting about this particular application is that Discover does this work for you. If you apply for a Discover card and the company makes the decision that you require a cosigner, they will alert you to this fact and allow you to amend your application to include a cosigner to your account.
- US Bank
- Wells Fargo
Cosigner vs. Authorized User
What is the difference? The difference is that an authorized user is someone who is added to another person’s account. For example, when either my husband or myself applies for a credit card, we add the other as an authorized user. We share all our expenses and have for the past 14 years of our relationships, so it only makes sense. He does not cosign my credit card applications, nor do I do the same for him.
A cosigner, on the other hand, is someone who is not in charge of the credit card. You don’t get one of your own. All you do as a cosigner is state on record that you will pay that debt if the person to whom the credit card is going does not do so for some reason. You take the hit if the card is not paid for each month, but you don’t get to use the card or benefit from it in any way.
It might seem that a cosigner is a great way for you to get a card and rebuild or build your credit, but it’s not a wise decision. Why? Because most all major credit card companies currently report authorized users to the credit bureaus, anyway, so you’re going to reap the benefits of this authorized user account no matter what. It is important to remember that as an authorized user, you are not responsible for payments so you are not going to get as much weight on your credit score with this card as you would one with a cosigner.
If you are being asked to cosign a credit card application, we get that you are hesitant and we respect that you are not looking forward to attaching your good name and credit to someone else’s issues. However, if you are someone looking for a cosigner on a credit card application, good luck; most people are unlikely willing to attach their name to someone else’s debt. In that case, there are some options for you to consider that might be a bit more lucrative and less stressful.
The first is a secured card. You can get a secured card from almost any major credit card company. There is no credit check involved. You simply put down a deposit onto a credit card account and that becomes your credit limit. You still have to pay the card each month, and the card company reports your account usage to the major credit bureaus. After a year or so with an account in good standing, you will find that most banks are willing to replace your secured card with an unsecured card so that you can have back your deposit and have a real credit card to your name again. It’s not a bad option since this card does report your activity to the credit bureau, allowing you to build or rebuild your credit when your account is in good standing.
If you cannot find someone to cosign a card application for you, you are not alone. It does help to remember that building and rebuilding credit takes not only time, but also patience. It does not take much effort or time to destroy a credit score, but it takes a long time to right your wrongs. It’s like trust; you are given trust when you are given a credit card. You break that trust by not doing what you say you will do (paying the card off and making your payments on time) and your bank no longer trusts you. They will not trust you again overnight; you have to work hard to gain their trust once again, which is why credit is such a fickle subject matter. Just do your best to keep your score as high as possible, do not spend money you do not have, and be responsible with your finances. It’s the best way to ensure you don’t need a cosigner for a credit card account.
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