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Credit Card Tips

 

Join Credit Card Applications and Co-Signers

Sometimes it's difficult to obtain a credit card on your own due to a poor or limited credit history. Even when bruised credit isn't a concern, spouses often want to enter into a joint credit card account. Parents of college-age students sometimes sign up for a credit card with their kids, either as a joint applicant or a co-signer. There are many reasons why people want to share the responsibility for a credit card account. Here's a quick overview of joint credit card applications and co-signers.

Joint Applications

Just as the name suggests, these are credit card applications that are completed by more than one person. The applicants will be jointly responsible for the account. This is common among spouses and business partners; each account holder will be issued a card with their name on it. Timely payments will be reflected on both parties' credit reports, as will any late payments or defaults.

During the application process, both potential card holders will be asked to supply their personal details so that a credit check can be made. Income details will be requested and verified. If one applicant doesn't qualify, they can be added later as an authorized user rather than a primary card holder.

If an authorized card holder is added to an existing account, they will also get their own credit card with their name on it. However, they'll only be eligible for good and bad credit items that result after their addition to the account.

What's a Co-Signer?

A co-signer is a lot like a joint applicant. They help someone obtain a credit card by agreeing to be legally responsible for the debt if the primary card holder defaults. Co-signers are usually parents or relatives helping family members establish or repair their credit histories.

If someone asks you to become a co-signer, you need to make sure that you trust in their ability to manage the debt they incur. If that can't, that debt falls into your lap. Defaulted items that you co-signed for will reflect poorly on your credit score. At the very least, make sure that you're financially sound enough to pay off the debt if necessary.

Joint credit card accounts can be very helpful. Just remember that when you agree to sign your name to an account, you're agreeing to share the burden of the debt that comes from that account. If you don't want your credit score to suffer, only co-sign for people you trust implicitly.