In today's world, everyone could be a co-signee. It gives
one the legal right to use the financing for him or herself despite having
conflicting issues with another party. It also eases the transaction for a
credit card given better collateral from two people is a guarantee. But, the
only problem is, credit cards lost under your name -- even if the bankruptcy is
the fault of the other co-signee -- would reflect on your credit score.
Often, co-signing for borrowing purposes is done between two
parties, the other being family members that one could trust. Despite blood
relations, their financial attitudes are still truly different from responsible
members of your home. As they are unpredictable co-signees, it might pay to
understand about "contingent liability" or the likelihood that their
performance would affect the possibility of you getting approved for a loan.
Co-signers -- even those paired with responsible credit
holders -- are reminded often to observe the changing credit limits of
co-signed credit cards. Often, borrowers are not reminded of these increases
and it may lead to skyrocketing costs on both you and the credit holder's part.
If co-signing is critical to save another person from
immediate fiscal distress, just make sure to understand the possible strategy
you could have in considering all possible outcomes of a problem. This includes
finding the possible bottleneck for future charges when the card debt gets too
high or how to repay the credit line when it gets too high.
Beware these possible outcomes when co-signing credit cards.
Managing a personal credit card is already difficult -- managing it with two
heads makes it worse.
