Credit Cards With Co-Signers
A credit card is a form of loan, and like any loan, applicants must prove to the creditor that they are capable of repaying the loan before their applications are approved. Some people, especially those with limited or no credit history, need a co-signer to get a credit card. Each credit card issuer dictates when and how co-signers can be used in the terms of the credit agreement, so read these carefully before agreeing to be a co-signer.
Other People Are Reading
-
Co-Signers
-
Consumers who sign up for a credit card but don't otherwise qualify can use a co-signer to guarantee to the credit card issuer that the person will pay back any debt. A co-signer, sometimes known as a guarantor, is legally responsible for paying the debt if the debtor fails to, even if the co-signer never uses the credit card or doesn't agree to any of the purchases.
Joint Account
-
Co-signers on credit cards are essentially joint account holders. This means that both the applicant and the co-signer are individually responsible for the debt and entitled to use the credit card. Joint account holders are not the same as authorized users, however. An authorized user is allowed to use the card by the card holder but is not responsible for paying the debt. Authorized users, unlike co-signers, do not help a consumer's chances of getting a card.
-
Issuer Requirements
-
Card issuers do not have to allow applicants to use a co-signer. According to Leslie McFadden of Bankrate, some card issuers do not allow a co-signer under any situation. Others allow applicants to later add a joint account holder but do not allow co-signers on the initial card application, while others do allow co-signers. Whether a card issuer allows co-signers is up to the issuer and the terms of the credit agreement.
Required Co-Signers
-
No one is forced to apply for a loan, and no one can be forced to be a co-signer. However, in some situations, credit card applicants are not legally allowed to get credit cards unless they have co-signers. Under the Credit Card Accountability, Responsibility and Disclosure Act of 2009, people 21 and younger cannot receive a credit card unless they prove they have a steady income or have a co-signer with a steady income.
-
