Which Credit Cards Allow Co-Signers?

In the past, applying for a credit card with a co-signer — another person who agrees to share responsibility for charges made on the card — was a common way to increase your credit card approval odds. However, most major credit issuers have phased out this option, which means you can no longer use a credit card co-signer to build a positive credit history.

That said, a few credit cards, including the Apple Card*, allow you to create a joint credit account with another person. Joint accounts are just what they sound like: They’re co-owned by both individuals. Unlike co-signed accounts, where the co-signer has no power within the account but is simply the guarantor, joint accounts are co-owned by both individuals.

Here’s what you need to know about co-signers and joint credit cards and other options for people who want to build their credit quickly.

What credit cards allow a co-signer?

The major credit card issuers we contacted no longer allow co-signers. That list includes: 

• American Express
• Bank of America
• Capital One
• Chase
• Citi
• Discover
• Wells Fargo

You’re most likely to find a co-sign option with smaller credit unions or regional banks. However, some banks, like U.S. Bank, allow co-signers for personal loans.

What to know before you co-sign a credit card

It sounds like a nice thing to do. Just sign your name and a friend or relative will gain access to credit. However, being a co-signer is not that simple.

1. You are responsible for all charges made on the card

When you agree to co-sign for a credit card, you’re telling the credit card issuer, “If anything goes wrong, I’ll pay the balance. All of it. Plus interest and any penalty fees.”

Some can assume that co-signing a credit card is the same as serving as a reference. This isn’t the case. When you co-sign a credit card, you are taking co-ownership of the credit account — which makes you legally responsible for all charges on the card.

You (the person with good credit) promise to pay the entire bill because the lender doesn’t think the applicant is entirely up to the task. The lender has seen the applicant’s credit report and financial information and has determined that the person does not have the necessary credit to maintain the account on their own.

2. The extra debt could affect your ability to get new credit

Are you planning to buy a home or take out a loan for a large purchase? Lenders will look at your debt load before determining your eligibility and interest rate — including the co-signed account.

“That account will impact your score no differently than if you were the only person on that account,” says Barry Paperno, a credit scoring expert who has previously worked at FICO and Experian. As far as creditors and potential creditors are concerned, the account is yours.

Every consumer can only handle so much debt. If this card pushes you into the danger zone in the eyes of your creditors, you risk paying higher interest rates on your credit cards and any future loans — and your next credit card application might even be denied.

3. Your credit score could go down

Does being a co-signer affect your credit? Yes. It can lower your credit score and it might even cause long-term damage to your credit history.

Why? Two reasons.

1. Nearly all credit-scoring formulas base a percentage of your score on your current balances as compared to your available credit. This is called a credit utilization ratio. The less credit you use (experts recommend under 30%), the better. If your friend or relative uses a significant chunk of the available credit on a co-signed card, it could lower your score even if the account holder makes on-time payments every month.
2. If the account holder makes late payments or begins missing payments, their actions will also show up on your credit report. Since derogatory marks can remain on your credit report for as long as a decade, co-signing a credit card can be riskier than you realize.

4. The account holder could increase the credit limit without your consent

The Credit Card Accountability, Responsibility and Disclosure Act, or Credit CARD Act, mandates that while the account holder is younger than 21, the co-signer has to give written permission for any credit limit increases, says Chi Chi Wu, senior attorney with the National Consumer Law Center.

However, once the cardholder is past the age of 21, no federal law requires that the co-signer be notified of any credit line increases, she says.

Some people decide to co-sign a credit card when their child goes off to college, believing that they can just write a check for their child’s relatively small card bill if anything goes wrong. But if their child keeps the credit card account open past their 21st birthday and begins increasing the credit limit, the bill could end up being quite a bit more than their parents estimated.

5. If you want out, you might have to close the credit card

Do you want to be responsible for your friend or relative’s credit card bill for life? If not, you need an exit strategy.

Often, ending the co-signing arrangement requires closing the card account. Closing a credit card account has a few downsides, and closing a co-signed credit account adds one more wrinkle. Depending on the contract and your state laws, you may need the cardholder’s cooperation. It may not be as simple as telling the card issuer you want out.

Plus, any unpaid debts accumulated while the co-signed account was open are still your responsibility, even after the account is closed. Until they’re paid, they’re your bills, too.

Alternatives to finding a co-signer

Since most credit issuers no longer allow people to apply for credit cards with co-signers, you’ll need to look for alternative ways to access credit.

If you have bad credit or limited credit history and are unlikely to be eligible for one of the best credit cards, here are a few ways to build credit without a co-signer.

• Become an authorized user
  

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  One of the best ways to build credit quickly is by becoming an authorized user of another person’s credit card. When you become an authorized user, you receive authorization to make purchases on another person’s credit account. The account owner is responsible for all payments and any debt incurred.

  Most credit card issuers report authorized user accounts to the three major credit bureaus (Experian, Equifax and TransUnion). This means that becoming an authorized user is an easy way to piggyback on someone else’s good credit while building your credit score, especially if you’re a student or young person who isn’t old enough to open a credit card.

• Apply for a joint credit card
  

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  In some cases, you may be able to apply for a joint credit card. Joint credit cards are exactly what they sound like: a credit card issued jointly to two people (spouses, for example), both of whom have access to using the card, manage the account and are legally responsible for any debt incurred on the card.

  All activity on the card is reported in both cardholders’ credit reports, which means that if you both use your joint card responsibly, you could both receive a credit boost.

  Likewise, if one or both of the joint account holders handle the account poorly, your credit scores could dip. In that way, joint accounts are as dangerous as co-signed accounts, so consider entering this type of agreement carefully.

• Apply for a secured credit card
  

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  If you want to apply for a credit line without becoming an authorized user or looking for a joint credit card, consider applying for a secured credit card. These credit-building cards require a small security deposit that is usually equal to your initial line of credit, allowing you to prove that you can handle credit responsibly.

  Once you’ve demonstrated your ability to make on-time payments and manage your line of credit, most credit card issuers will return your security deposit and graduate you to an unsecured credit card.

• Consider credit cards for people with limited credit
  

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  Want more options? You might want to look at our lists of the best credit cards for people with bad credit and credit cards for people with no credit history.

  Many of these cards are secured credit cards, but these lists also include unsecured cards designed for people with fair credit, such as the Petal 1 Visa® Credit Card*.

The bottom line

Even though most major credit card issuers no longer allow credit cards with co-signers, there are still ways to build credit even if you have a low credit score or a limited credit history.

Consider becoming an authorized user, applying for a secured credit card or looking for a card designed to help people build credit. Once you have a line of credit, practice responsible credit habits to establish a positive credit history and build your credit score.

*The information about the Apple Card and Petal® 1 Visa® Credit Card has been collected independently by Bankrate. The card details have not been reviewed or approved by the card issuer.