Navigation Top
AGO Logo Graphic
AGO Header Image
File a Complaint
Contact the AGO
All Consuming
Return to main blog
Should you co-sign a credit card for your student?

Should you co-sign a credit card for your student?

(Credit and Money Matters) Permanent link

As a teen, my mom instructed me in how to apply for my first credit card. We went to The Bon Marché, which at that time offered a “student” card with a low limit. Mom told me to buy a pair of socks with my new card. And then we right back to the register and made a payment on my account.

One pair of socks. Charged and paid for that day. And then the card was tucked away in a safe place. Years later, that first credit card (now Macy’s) remains my oldest account – and factors into my credit history, along with newer accounts and my mortgage.

Today’s students may find it more difficult to start building a credit history. Under the new Credit Card Accountability, Responsibility and Disclosure (CARD) Act, cards can’t be issued to people under the age of 21 unless they have an adult co-signer or show proof that they have the means to repay the debt.

The new law aims to address a growing debt problem. The average college student owes more than $3,000 on credit cards, according to a 2009 study. Many students use cards to live beyond their means – not just for convenience.

As we’ve mentioned before on All Consuming, credit card companies are notorious for wooing college students with everything from free pizza to iPods.

So what happens if your kid can’t get a card? Should you co-sign?

“As a co-signer you are responsible for that debt even if your child defaults. It’s their card, but you’re the backup on it,” explains Greg McBride, senior financial analyst with, told MSNBC’s Herb Weisbaum. “You really need to think about this. If Junior defaults on those payments the card company is going to come after you and that can have a negative impact on your credit.”

The CEO of Credit Karma told a FiLife blogger it’s OK. “As a society, we don’t spend much time teaching children about credit and its importance. By requiring a co-signer, parents can get involved in monitoring spending behavior early, before debt gets out of control," said Ken Li. (For the record, CreditKarma offers consumers a free TransUnion score and credit profile to consumers in exchange for collecting their personal information and pitching them targeted ads, such as a car loan with a lower rate.)

But overall, I found more naysayers than advocates.

Blogger Karen Datko for MSN’s Smart Spending says “absolutely not. Not even if it were the last card on earth, flat-screen TVs were 60% off, and your birthday was four days away. (Particularly not then.)”

College student Zac Bissonnette with WalletPop also says “never.” “I've talked to lots of rich people and I've talked to lots of broke people. I've never met a rich person who is rich because he had a credit card during college. But I have heard from literally hundreds of people in their 20s and 30s who are still digging out of the financial mess they created in college with the help of credit cards.”


Posted by Kristin Alexander All Consuming Blog Moderator at 03/11/2010 11:24:02 AM | 

I think we need to be teaching our kids more about financial responsibility. They still teach high school kids how to balance their checkbook (technology has made this completely obsolete in my opinion) but next to nothing is mentioned about credit cards. I'd have no problem co-signing for a credit card to help teach my son about what credit really means and how to use it properly.
Posted by: Nathaniel ( Email ) at 3/18/2010 2:10 PM

I already got debit card. My parent wont use credit card. Let say i wan apply a credit card with the most low credit least i need how many salary? Because i got a salary slip is working while industry training.
Posted by: Jeff Risk ( Email ) at 4/13/2010 4:01 PM

I agree with Nathaniel- we really need to start teaching our high school students about credit and credit cards. So many of these sad stories about kids digging their way out of debt could have been avoided with a simple class.

Posted by: Emily ( Email ) at 4/27/2010 2:11 PM

My parents helped me build my credit as well. It's a tough question, because it's really challenging for young college kids to have the foresight that they'll need to pay it back one day.
Posted by: Frederico ( Email ) at 9/7/2010 1:52 PM

Totally agree with the comment made by Zac. I was endowed with a credit car during college and am still paying off debt. Introducing a compulsory curriculum during high school to teach finanacial stability is surely the direction we need to be moving in now. [BLOG MODERATOR'S COMMENT: Far as I know, there is no comment from "Zac" so this could be comment spam. But I'm posting anyway.]
Posted by: Chris ( Email ) at 9/16/2010 3:37 AM

Thanks for posting - an interesting read that people can easily relate to. My solution? Don't use a credit card. Money before you spend it and using foresight to manage it properly is the key to a stable financial future. Just my 2 cents. Cheers, Dan.
Posted by: Dan ( Email ) at 4/15/2011 12:27 AM

Leave a comment
Name *
Email *

All comments are reviewed to ensure compliance with our Blog Comment and Use Policy. Comments are generally posted within two business days. Send Feedback
Content Bottom Graphic
AGO Logo