Even though applying for a credit card with a cosigner can increase your likelihood of getting approved, many financial institutions in Canada don’t accept cosigned credit card applications. Instead, this option may be available on a case-by-case basis if you meet certain conditions. Or, banks might allow you to submit a joint credit card application, which isn’t the same thing.
Even if your bank allows cosigners, it’s still a big responsibility that you might not want to take on. If you don’t pay your balance on time, your cosigner will be liable. What’s worse, failing to meet your obligations can hurt both your credit scores.
If getting a cosigner isn’t an option, you have alternatives like getting a secured credit card or taking time to build up your credit before applying. Let’s walk through your options.
A credit card cosigner is a person who guarantees they will pay the credit card debt if the primary cardholder fails to do so.
The main difference between a cosigner and an authorized user is who pays the credit card debt if the primary cardholder defaults. Other differences include:
| Cosigner | Authorized user |
|---|---|
| Liable for the credit card debt | Not liable for the credit card debt |
| Doesn’t get a physical card | Gets a physical card |
| Doesn’t have credit card account access | Has credit card account access |
Most large credit card issuers don’t allow cosigners. Luckily, some do. Some financial institutions like Scotiabank allow cosigners to be added on to any credit card application, but the necessity of doing so is determined at the branch level by whichever bank representative is working with you on your application.
Other institutions like RBC allow any credit card to be jointly held if 2 people apply for a card together. This isn’t quite the same as cosigning a card application, given that both people would have regular access to the card. But it does allow 2 incomes and credit profiles to be considered when an application is being evaluated for approval.
Check with your bank or other financial institution to see what options are available for you.
Applying for a credit card with a cosigner makes sense if you:
But before you decide to apply with a cosigner, consider the benefits and drawbacks.
If you’re unable to find someone to cosign your credit card application, consider an alternative option like a secured credit card. These require some form of deposit or backing to guarantee the amount on the card. Deposits often start around $200 but can reach as high as $10,000. The benefit of this is that you can get approved for a card pretty easily (sometimes, without a credit check) and then build up a solid credit history until you’re able to apply for an unsecured card.
Perhaps the most obvious, albeit tedious, way of avoiding using a cosigner is by improving your credit score so that you can apply without one. A number of factors play into your credit score including the following:
Speak with a financial adviser and review the options below to find the right card for you.
If you can’t apply for a credit card because of poor or no credit score, applying for a credit card with a cosigner could be one option.
However, a better alternative to build your credit is to become an authorized user to someone else’s credit card account or to apply for a secured card and build your credit yourself.
It’s possible – and relatively easy – to get a credit card as a newcomer to Canada.
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