Co-signing for your kids credit card,

[MotF Bane]

Not an anti-CC thread.

I am 43 years old. Lets say I co-signed for one of my kids while they were in their early 20s.

20 years later, at 63 years old my wife and I are getting ready to enter retirement, when I find out a company wants $24,000 from me?

You signed, that's it. The company didn't force you to sign, didn't tell you no to removing your name (since in this case, she never asked). So don't bother trying to make the company out to be a bad guy.

 

[MotionMan]

Well, duh, that is what co-signing is all about - It gives the cc company someone to go after if the holder can't pay.

BTW, who needed a co-signer 22 years ago? In 1989, not only were they practically throwing cards at everyone (especially teenagers and college student), you got free gifts/t-shirts, too. My college campus was so sloppy with cc offers at the time the school instituted a rule to try to limit the amount of advertising they did.

MotionMan

 

[Locut0s]

My parents did this for me when I was a kid, but never gave me a card, just put my name on the card. This helped me establish my credit before I was even 18. When I was 18 I applied for my own CC.

Was this necessary? I just signed up for one of those $500/1000 limit student cards. No problem getting that with basically no history as a teenager.

 

[pcgeek11]

Stupidity has a price. This woman was very stupid and her daughter didn't fall far from the tree.

I hope the credit card company gets the money owed. I am shocked the progressives aren't crying " Unfair lending practices"... yet.

 

[alkemyst]

People have a lot of trust issues here, I have no idea what kind of family members they have, but it's scary.

My parents co-signed for quite a few things for me. I didn't keep those accounts longer than I needed too, once my credit was in the prime bracket I closed old accounts and picked up my own credit.

If a co-signer files for bankruptcy, even if the debt is not part of the filing it will affect you.

 

[Fausto]

Co-signed is co-signed. End of story.

 

[Shawn]

Was this necessary? I just signed up for one of those $500/1000 limit student cards. No problem getting that with basically no history as a teenager.

Dunno, but I got an 8.9% APR. I think those student cards are usually ~25% APR.

 

[PokerGuy]

My parents co-signed for all sorts of stuff, but I'm responsible so there were no issues.

My only issue with this is if they raised the credit limit along the way without her consent. I might co-sign for someone on a $500, knowing that if things go south I might owe $500.... but that doesn't mean I want to have a $24,000 risk. The company giving the credit should get approval from the account holder as well as any co-signers before increasing the credit limit IMO.

 

[Texashiker]

Co-signed is co-signed. End of story.

At what point should there be a time limitation on contracts?

You sign a contract, 20 years later it comes back to bite you in the butt. 20 years is a long time, a lot can change.

 

[Vic Vega]

FTY, there is no such thing as a co-signer for a credit card. You are either an authorized user, which has no liability for the debt or a named account holder, which grants full access to the credit line and full responsibility for the debt.

 

[mvbighead]

Not that it is the CC company's fault, but isn't a co-signer there to help someone establish credit?

I'd think after 1-5 years, some validation would be done to say, co-signer is no longer needed. In other words, prompt the co-signer with a mailing and suggest they remove themself as the co-signer.

In any case, mom screwed the pooch on this one. Should've gone through her credit report and cleared that liability 10-15 years ago.

 

[Vic Vega]

Not that it is the CC company's fault, but isn't a co-signer there to help someone establish credit?

I'd think after 1-5 years, some validation would be done to say, co-signer is no longer needed. In other words, prompt the co-signer with a mailing and suggest they remove themself as the co-signer.

In any case, mom screwed the pooch on this one. Should've gone through her credit report and cleared that liability 10-15 years ago.

Credit cards don't work that way, there is no such thing as a "co-signer" in the traditional sense you might have with a secured loan (car, house, business, etc). If you are a named on the account then you will be responsible for the full amount of the debt, as well as have access to the entire credit line.

Additionally, if your credit sucks you will not be able to open an account with someone with good credit. The CC company most likely won't do it. Oh, they'll open the account... for the person with good credit, and make you an authorized user, but you will not be named on the account (or responsible for the debt... surprise surprise).

Many people THINK they are acting as a "co-signer" when they open an account and add someone as an authorized user who is actually the primary user... then that person stops paying the bill and the CC comes after the owner of the account, the person who is named on the account.

 

[Fausto]

At what point should there be a time limitation on contracts?

You sign a contract, 20 years later it comes back to bite you in the butt. 20 years is a long time, a lot can change.

It amuses me that you, Captain Personal Responsibility, have a problem with how this stuff works because you also have a problem with credit cards.

 

[D1gger]

My university aged kids both have a VISA card that is linked to my VISA account, but they have clear instructions that it is to be used only with prior authorization from me or my wife or for emergency use. They've had them for several years with no issues.

My older child now has their own credit card as well (with a very low limit) that is used for personal purchases.

 

[ichy]

I will never co-sign anything for anybody. No exceptions.

 

[Texashiker]

It amuses me that you, Captain Personal Responsibility, have a problem with how this stuff works because you also have a problem with credit cards.

Not a credit card thread.

As I asked in my previous post, shouldn't there be some kind of limitation on contracts like the one in the OP?

A lot can change in 20 years.

 

[D1gger]

Not a credit card thread.

As I asked in my previous post, shouldn't there be some kind of limitation on contracts like the one in the OP?

A lot can change in 20 years.

Legal contracts don't expire unless there is an explicit expiry date stated in the contract.

I do think if the bank was raising the limit, there should have been some responsibility to notify the co-signer and request approval, but I have never read the fine print to see if that point is covered in the agreement.

 

[Fausto]

Not a credit card thread.

As I asked in my previous post, shouldn't there be some kind of limitation on contracts like the one in the OP?

A lot can change in 20 years.

It is a credit card thread. You're just not sophisticated enough to disguise it very well.

 

[rudder]

mom should have raised her daughter not to buy so many handbags and shit

This... mom should pay up simply for being such a bad mom.

 

[Phoenix86]

Not a credit card thread.

Co-signing for your kids credit card

In short, mom co-signs for daughters credit card.

20 years later, the daughter files for bankruptcy with a $24,000 balance on the card.

Credit card company starts harassing mom telling her she owes the $24,000.

http://www.foxbusiness.com/personal-finance/2012/01/11/moms-on-hook-for-daughters-card-debt/.

OK.

 

[Golgatha]

People have a lot of trust issues here, I have no idea what kind of family members they have, but it's scary.

My parents co-signed for quite a few things for me. I didn't keep those accounts longer than I needed too, once my credit was in the prime bracket I closed old accounts and picked up my own credit.

If a co-signer files for bankruptcy, even if the debt is not part of the filing it will affect you.

Co-signing for a credit card for a family member is just asking for hard feelings if something doesn't go according to plan. I'd rather front the money for the want/need and just consider it a gift, which would probably be seen as a better gesture to the recipient than just co-signing for something anyway.

 

[Locut0s]

Dunno, but I got an 8.9% APR. I think those student cards are usually ~25% APR.

That's nice I suppose. Yeah mine was probably in the 18-25% range. But then I hardly if ever pay any interest so it rarely matters.

 

[chubbyfatazn]

I'd have to say it depends on your kid...

My dad cosigned my first credit card that I got about two years ago. It instantly raised my limit from $500 to $6500. He didn't hesitate once and he didn't once sit me down and give me a long lecture about the merits of overspending and being unable to pay my debts - he'd drilled that into my head since I was in high school.

Since then I've paid my bills on time and have never had a balance of more than $2000 (that was for a hospital visit). He gets my statements but tells me he never reads them since he knows he can trust me.

It's a different story once you factor in the 20+ years part, but if you raised your child in a manner so as not to hide monetary issues then I'm not seeing the issue.

 

[Clinkster]

What's so surprising? That's what co-signing is. My dad co-signed for me when I was 16 with a $1000 limit to avoid such a cluster of bad.

25k limit, lol.

 

[IronWing]

What's so surprising? That's what co-signing is. My dad co-signed for me when I was 16 with a $1000 limit to avoid such a cluster of bad.

25k limit, lol.

That's exactly what the mom in the linked story did. She co-signed for a $1000 credit limit. The question is "did the credit agreement contain the standard 'terms subjest to change at any time' language which would allow the lender to increase the credit limit, and therefore the mother's exposure, without the mother's consent?" It probably did, but definitely worth exploring.