If you're applying for your first credit card or trying to rebuild bad credit, adding a co-signer to your credit card application could improve your chances of getting approved. A co-signer is someone with good credit and income who guarantees that they will pay your credit card balance if you default.
There are two big caveats when it comes to co-signers, however:
- Most major credit card issuers don't allow for co-signers, even on student credit cards.
- When an issuer allows for co-signers, you might have trouble finding someone to agree to co-sign. Being a co-signer means taking responsibility for someone else's debts.
If you can't get a co-signer, you have other options with bad credit or no credit, including becoming an authorized user or applying for a secured credit card.
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Major credit card issuers' co-signer policies
Among the largest credit card companies, only a few allow for co-signers. It may also be worth checking with local banks and credit unions where you live.
| Issuer | Allows co-signer? | Notes |
|---|---|---|
| American Express | No | Must be 13 years old to be added as an authorized user. |
| Bank of America® | Yes | There is no minimum age required to be an authorized user. |
| Barclays | No | Must be 13 years old to be added as an authorized user. |
| Capital One | No | There is no minimum age required to be an authorized user. |
| Chase | No | There is no minimum age required to be an authorized user. |
| Citi | No | There is no minimum age required to be an authorized user. |
| Discover | No | Must be 15 years old to be added as an authorized user. |
| U.S. Bank | Yes | There is no minimum age required to be an authorized user. |
| Wells Fargo | No | There is no minimum age required to be an authorized user. |
Getting added as an authorized user on someone else's credit card account is generally easier than finding a card that will allow a co-signer. Many times, parents will add a child as an authorized user or one spouse will make the other an authorized user on an account. Authorized users get a card with their name on it, but the primary account-holder is the only one responsible for paying the bill.
If your main concern is simply having access to a credit card rather than improving your own credit, authorized user status can do the trick. Most major issuers report authorized user activity to all three credit bureaus, so becoming an authorized user can help with building credit, too. But that benefit only goes so far:
- When you're approved for a credit card with a co-signer, you and the co-signer are both legally responsible for the debt. Authorized users have no such responsibility, so the FICO credit-scoring model gives less weight to authorized-user accounts than to accounts in which you are the primary borrower or cardholder.
- In general, the benefits from authorized user status are greater for people who have a thin credit history than for those who have bad credit because of past missteps. In thin-credit cases, authorized user status simply adds data where there was little to none before. With bad credit, authorized user status is weighed against damage already done.
Co-signer vs. joint account
Having a co-signer is in some ways akin to having a joint account with someone, but there are key differences, too:
- With a joint account, the account holders are equal partners: Both are listed as account owners, both names appear on the bill, the debt appears on both credit reports and both are legally responsible for the account.
- In a co-signer situation, the primary account-holder is typically the only one listed as the account's owner and theirs is the only name on the bill. The primary account-holder may be the only one allowed to make changes to the account. Both parties are still legally responsible for the debt, though, and the debt appears on both their credit reports.
The exact implementation of joint accounts and co-signers varies by issuer, but neither type of situation is very popular nowadays because issuers tend to prefer that one person bear sole responsibility for credit card accounts.
As with co-signing, opening a joint account also carries risks for cardholders. If the relationship hits a rough patch or ends, sharing a credit card can complicate matters further.
If you can't get your own credit card
If a co-signer isn't an option, either because you can't find an issuer to allow it or someone to agree to co-sign, you still have options:
- Secured cards. People with bad credit or no credit generally have a better chance of approval with secured credit cards. These cards require a collateral deposit, usually equal to your credit line, making it less risky to approve your application. You'll also be the primary account holder, so your card use can help build your credit more effectively.
- Authorized user status. In some cases, the primary account-holder can even set a spending limit on your card if they are hesitant about giving you access to credit.
- Alternative issuers. Alternative credit cards are aimed at people with little to no credit history. These products look at factors such as income, savings, bank account balances and employment instead of just credit history when deciding whether to offer someone credit.
Building credit doesn’t happen overnight — it takes time and patience. Even if you have limited options now, as you build credit, you'll get access to more financial products that offer greater flexibility and better benefits.
