Is a joint credit card application a bad idea?

Q: I want to apply for a joint credit card account with my son in college to help him build credit. Is this a good idea or not?

picture of joint credit reportA: I’m glad to see you are giving this some thought before submitting an application. There are some benefits to going this route – but at the same time – some big pitfalls you need to be aware of.

Pro: Helps build credit for the other person

Obviously first and foremost, the biggest benefit is that the person with insufficient credit history will have a chance to build (or rebuild) their credit using a credit card they might not qualify for on their own.

Con: It can hurt the person with good credit

With a joint credit card application, you are signing up for 100% liability (not half liability, as some wrongly assume). That means if the other person makes late payments or defaults on the account, your credit score will be harmed… just as if you did those same things on your own account. It doesn’t even matter who made the purchases – with joint credit cards both parties will be held 100% liable.

Pro: Doing this favor for someone may strengthen the relationship

Whether it’s your boyfriend or girlfriend, son or daughter, or a best friend – applying for a joint credit card is a favor they will certainly appreciate (at least they should!). In turn, there is the possibility that doing this may strengthen the bond between the two people.

Con: It very well might ruin the relationship

I can’t even begin to tell you the number of horror stories I have heard involving joint credit card accounts. You and your partner may be head over heels right now, but what happens if you break up later on? Your son or daughter may not intentionally mean to harm you, but using credit for the first time can be a learning curve where mistakes happen. The ugliest stories I’ve heard involve friends and ex-spouses, where out of spite or vengeance, they abuse the joint credit cards and leave the other person to pick up the pieces.

Pro: It makes approval easy

A joint account makes it easy for the person with bad credit to get approved for a credit card, regardless of their credit history.

Con: The easiest route isn’t always the best

Joint credit card offers may be easy, but that doesn’t necessarily mean they are the best route to go. There are other ways a person with no credit or bad credit can get a credit card on their own. If they are a student and new to credit, then student credit cards have very lax requirements. If it’s a bad credit history that is getting in the way, then there are secured cards to rebuild credit with 100% guaranteed approval and no joint applicant is needed. If the person doesn’t have amazing credit, but not horrible either, then there are offers for fair credit that have more lenient qualifications. All of these options allow the person to get a credit card without someone else.

Should you or shouldn’t you?

The person with the good credit obviously has the most to lose, so the decision should be entirely up to them. From my experience running this forum, I would advise against it more often than not.

The person with bad credit may say “If you love me, you will do it” or “If you are my best friend then you will trust me” but both of these arguments make zero sense. Why? Because if you truly do love someone or are their best friend, then you won’t risk your good relationship by letting money get involved and muddling things up.

How to make both people happy

The reason you want to do this is to build/repaid credit, either for yourself or the other person, am I right? If that is the goal, then here’s a way you may be able to accomplish that, without risking the relationship…

Technically there is no such thing as a joint credit card application, because when you apply only one person’s name can be entered on the application. So the person with good credit will first have to apply for a credit card alone and get approved. Afterward, they can call up customer service and add the second person’s name and Social Security to the account – when this is done a second card will be mailed out with the other persons’ name on it.

At this point, whether or not that second card is physically given to the other person doesn’t really matter. Their name and social is already on the account and it will be showing up on their credit report. The information reported to the credit bureaus will be the exact same for both parties, even if one person doesn’t use their card. So as long as the primary applicant uses their own card, that activity will still be showing up on the other person’s credit file.

This is a great way to go because it minimizes the risk (and possibly saves the relationship) since the other person will never have possession of the card… yet their credit will still benefit anyway.

How to apply?

As mentioned, the person with the good credit will first need to apply for a card on their own. After they are approved, they can contact customer service and add the other person’s info to the account. So the first step will be to pick out a card and apply. Check out these reviews to get started:

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