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Hey Students! Don't Cosign Your Friend's Credit Card

New regulations that were part of the Credit CARD Act of 2009 have made it more difficult for students under 21 to get approved for student credit cards unless they have an adult cosigner or sufficient income. Unfortunately, this has led to a situation in which many older students are now cosigning for their younger friends in order to help them get approved for a credit card.

If this is something you're contemplating, forget about it right now. You need to understand that you will be on the hook financially for any debt incurred through the credit card's use once you become a cosigner. So, if a payment is made late or perhaps never made at all, your credit will be damaged just as much as the primary cardholder. That's not a situation you want to put yourself or anyone else in.

Unless you’re married and helping a spouse build credit, or a parent that wants to help their child start building credit at a young age, you should NEVER cosign another person’s credit card. Period!

on Mon, 2011-10-24 17:00