Credit Cards That Allow Co-Signers

Young adults may find it more challenging to be approved for credit cards.

As a result of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, credit card companies can no longer offer credit cards to an underage consumer (under 21), unless he has a cosigner or can show proof he can independently pay the bill. Since the new credit card act, young adults may find it difficult locating credit cards that allow a cosigner or accommodate their need to prove financial ability to repay.

Reasons Banks Will Not Accept Cosigners

Credit card companies may not want the hassle of dealing with a joint account, because it may require further customer service and investigation if something goes wrong. For example, a parent may cosign for her child's credit card not realizing the child is making frivolous purchases forbidden by the agreement made before the parent cosigned. This may cause either the young adult or parent to choose not to pay the bill. Where the bill will be sent and by whom it will be paid are also concerns when dealing with joint accounts.

Authorized User Versus Cosigning

Many credit card companies allow authorized users on credit card accounts. An authorized user is someone who can legally use a credit card, but he is not financially liable for the debt. Only the person for whom the card was approved is responsible for the debt. When cosigning, both parties are responsible for the debt. There is no privacy for the parties making purchases when there is a cosigner. For example, any purchase the young adult makes can be seen by the cosigners on a statement, or they can call the company to obtain this information. An authorized user can't call to obtain information on the account.

Finding Cosigner Credit Cards

Because credit card issuers are aware of the new credit card act, credit cards companies that allow cosigning may solicit to college students on campus. You can visit your college bookstore or look for recruiters on campus who may be offering credit cards and inquire whether they require cosigners. You also can visit your local bank. Parents usually can transfer money into their child's joint or student account. As a result, the bank also may offer credit cards that can be cosigned.

Credit Card Issuers Allowing Cosigners

Bank of America allows cosigning after the account owner is initially qualified. For example, if a parent is approved and qualified for a Bank of America credit card, they can add an adult under 21 years of age to the account. Chase also offers joint accounts, but the option is not available on new account applications. The cosigners must be added after the account is approved. Discover determines whether a cosigner is acceptable on a case-by-case basis. Wells Fargo also allows cosigners, although that request must be added to the initial application. Citi and Capital One offer credit cards to young adults, as long as they can prove they can repay the loan.

References

• Bankrate: Credit Cards that accept Co-signers