Credit Card Basics

What Is a Credit Card Cosigner and Should You Use One?

A credit card cosigner may help you get approved for a credit card, assist you with building credit, and allow you to take advantage of the many benefits of credit card usage by signing on to the credit card application, and becoming responsible for the debt if you fail to pay.

Getting a credit card cosigner can help a credit card applicant with no credit or weak credit to obtain a credit card because you're able to leverage the cosigner's good credit scores and solid payment history.

What Is a Credit Card Cosigner?

Getting a credit card is all about proving to the credit card company that you're a solid credit risk, and that chances are good you'll pay your credit card debt.

If you can't prove to a credit card company that you have high enough credit scores and a long or strong enough payment history, adding a credit card cosigner who does have strong credit scores and stable repayment history can help you get a credit card.

A credit card cosigning scenario has two parties involved in using the credit card and repaying any card debt:

  • The primary credit card holder. The primary credit card owner has the same privileges and obligations as most credit card consumers, including paying the credit card debt. If the credit card holder can't repay the debt, the payment obligation shifts to the credit card cosigner (just like when there's a cosigner on a loan).
  • The cosigner. A credit card cosigner takes the same responsibility as with any other kind of debt. If the primary cardholder does not pay the credit card debt, the credit card cosigner is responsible for repaying it.

Who Allows Credit Card Cosigners?

Potential cardholders and credit card cosigners should understand that not every credit card provider allows you to have a credit card cosigner.

Here's a short list of credit card providers that do—and do not—allow credit card cosigners:

Credit Card Providers That Do Allow Credit Card Cosigners

  • Bank of America
  • U.S. Bank
  • Wells Fargo

Credit Card Providers That Don't Allow Credit Card Cosigners

  • American Express
  • Barclaycard
  • Capital One
  • Chase
  • Citi
  • Discover

Before attempting to apply for a credit card with a cosigner, check with the card provider and make sure cosigners are allowed. Also make sure that both the primary cardholder and the credit card cosigner are both notified of important card information, like credit limit movements, interest rate changes, and any impactful fees and penalties both parties should know about.

Risks of Credit Card Cosigning

Before you consider cosigning on a credit card for a family member, significant other or friend, it's important to consider all the responsibilities of being a cosigner. Having a credit card cosigner on board is a shared responsibility.

For the credit card applicant partnering with a cosigner, the main responsibility is to make payments on time, make at least the minimum payments, and to not overspend to keep from incurring extra credit card debt they can't afford to repay.

For the credit card cosigner, the main task is to take responsibility for the credit cardholder's spending. Any bills that aren't paid by the credit card recipient are redirected to the cosigner, who is contractually obligated to pay off any credit card debt. If the credit card debt is unpaid or is paid late, both the credit card holder and cosigner's credit scores could drop.

Additionally, the damage done by not paying the bill and having the credit card debt turned over to the credit card cosigner could fray personal ties between the two parties.

Conversely, a primary credit card user in a cosigning arrangement shouldn't expect their credit score to rise significantly if credit card payments are paid on time.

Credit Card Cosigner vs. Authorized User

It's also helpful to understand the difference between a credit card cosigner and an authorized user, as there are key differences and the two are often confused:

  • A Credit Card Cosigner. A credit card cosigner guarantees he or she will pay a credit card bill if an authorized user on the same card account doesn't pay the bill. Credit card cosigners don't actually receive a physical credit card, don't get a bill (unless the authorized user doesn't pay the credit card debt) and don't have access to the credit card account.
  • An Authorized User. A primary credit card holder can add an authorized user to his or her credit card account. The authorized user then has the ability to use the card to make purchases, receive monthly bills, but is not ultimately responsible for the card payment (that burden falls on the primary credit card holder, or a cosigner if the primary user fails to pay.) Authorized users may see a moderate uptick in their credit scores assuming primary user pay bills reliably and on time.

3 Reasons You May Need a Credit Card Cosigner

There are multiple reasons why you might require a credit card cosigner. Common reasons for a credit card cosigner include the following:

1. The Credit Card Applicant Has Little or No Payment History

Having no credit history is a major roadblock to getting approved for a credit. Credit card companies generally require a credit card applicant to show some proof of their ability to pay their credit card debt. If that proof isn't available, the consumer attempting to get a credit card may need to seek alternative options to build credit with a credit card.

2. The Credit Card Applicant Has Weak Credit Scores

When a credit card applicant has a low credit score (most credit card issuers consider a FICO® Score of 669 or below as fair or very poor credit score), a credit card company deems the card applicant a higher credit risk, and would likely reject the credit card application.

With a credit card cosigner who has strong credit scores (a FICO® Score of 700 or above is considered a solid credit score), the chances of getting approved for a credit card using a cosigner is vastly improved.

3. Low Income

If the credit card application doesn't have a strong, regular income, a credit card company may consider that applicant a risk to pay their credit card debt, and reject the credit card application. A credit card cosigner with a strong credit history and a proven stable and strong regular income can change that equation and help a credit card applicant get approved for a credit card.

What If You Can't Find a Credit Card Cosigner?

If for any reason, you can't get a credit card cosigner, you may want to take these steps to improve your odds of getting credit:

  • Obtain a secured credit card. A secured credit card is easier to get than a traditional credit card, primarily because it requires an up-front deposit to be made into the card's payment account up to a specified spending amount, ensuring any debt incurred using a secured credit card is paid. A secured credit card can help build credit for the cardholder while providing at least some of the benefits and privileges of a traditional credit card.
  • Be an authorized credit card user. If you can't get approved for a credit card and can't obtain a qualified cosigner, ask a trusted credit card holder (usually a parent or other, older family member) if you can be an authorized credit card user. As an authorized credit card user, you have permission to use the credit card, but you're not responsible for any of debt incurred. The downside is you can have your name removed from the credit card by the primary cardholder at any time.

One Last Tip on Having a Credit Card Cosigner

Once your credit scores improve and you're in better financial health, you can contact your credit card provider and ask that the credit card cosigner be removed from the credit card account. If the monthly bills have been paid on time, the chances are good that the card company will allow the cosigner to be removed from the account and the primary cardholder's name will be the only one remaining on the credit card account.

If you've done your homework, shopped around for the right credit card that allows a cosigner, and paid all your credit cards bills on time, your chances of getting a traditional credit card that doesn't require a cosigner are greatly improved.

After that, it's only a matter of time before you have your own credit card, can work towards healthy credit scores, and you've had a great learning experience as a credit card user under your belt.