What you should know if you want to co-sign with a family member or friend on a credit card application. Is it a good idea? How to safeguard your own credit.
Wanting to help your friend, relative or child apply for a credit card is a selfless gesture. But will this move really help your loved one? And what about your own credit?
If your loved one is in financial trouble, co-signing on a credit card application is only going to make the problems worse and deepen his debt. What your friend/relative needs may be some financial counseling. Encourage him to seek help with a reputable credit counseling service. The National Foundation for Credit Counseling lists non-profit agencies in every state.
It is difficult to watch your adult child flounder with money problems. But "helping" might prove counterproductive. After all, people learn from their mistakes and a lot of young adults in their 20s have failed once or twice and eventually come out on top.
If you have a teenager, start teaching him/her how to handle money. Start with a prepaid card for teens that you monitor closely. It is never too early to start learning about money management.