When you have poor or no credit history, applying for a credit card with a cosigner may sound like a good idea. It can help give you access to credit card options you otherwise wouldn’t have.
But having a cosigner is a big responsibility because if you don’t pay your balance on time, your cosigner will be liable. Also, note that not every bank accepts cosigners to begin with.
What is a credit card cosigner?
A credit card cosigner is a person who guarantees they will pay the credit card debt if the primary cardholder fails to do so.
Cosigner vs. authorized user
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:
|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.
|Bank of America|
Should I apply for a credit card with a cosigner?
Applying for a credit card with a cosigner makes sense if you:
- Have little or no credit history. This way, the cosigner guarantees the credit card debt will be paid.
- Have a poor credit score. This lifts the weight from the primary cardholder, but if you’re a cosigner, make sure you know what you’re getting into.
- Low income. Having low income can sometimes be enough for the card provider to decline your credit card application. Alternatively, having your back covered by a cosigner could get you the card you want.
But before you decide to apply with a cosigner, consider the benefits and drawbacks.
- You can apply for credit cards with poor or no credit.
- You can have a backup if you can’t pay off your debt.
- Not all credit card providers accept cosigners.
- You can harm your relationship with your cosigner if you don’t pay your balance on time.
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.