Cosign on a credit card - bad idea?

[heyelander]

So my 19 year old cousin can't get her own credit card. She says she wants to get one to build credit so she can get a car loan or an apartment somewhere down the line. I was considering doing it (she didn't ask, she probably doesn't even know it's possible) but have a million questions.

Can you even cosign with someone as tangentially related as a cousin?
Is it better to get a joint card or cosign on hers? I would want to be able to see her bills etc (she lives in PA, so I'd need online access) and I wouldn't want her to be able to raise the limit. I'd also want to be able to cancel it without her sign off.
How terrible an idea is this? What's my max loss on the deal? I was hoping for something around a 2k limit. Having to suck that up would make me really mad and disappointed but wouldn't change my life.
I'm having a hard time saying if she is a responsible girl or not... she's never really been given any responsibility so there's no track record. She doesn't have a lot of follow through, but I think that's mostly because she has no direction. She's a people pleaser though and fairly serious with money so I think it might be a good thing to give her responsibility to me to pay her bill every month. I've stressed how bad it is for her credit to default and how terrible it is for her money to only pay the minimum. I told her she would only be able to spend what she can afford to pay off at end of month.
Yes, this is her parents job, but they are just as broke and I have no idea what their credit is at this point. I run the risk of pissing them off if I do it too. I should probably ask, but I feel like I'm big-timing them a bit by even offering sometimes.

How terrible all around is this thought?

[revo]

Here's an article on which issuers allow co-signers:

http://www.bankrate.com/finance/credit-cards/which-credit-cards-allow-co-signers.aspx

But yeah, probably a bad idea.

[heyelander]

hmm... all the authorized users things say parent or legal guardian, so that's probably not a possible route. Seems like that's the one I would have more control over.

[Hornsby]

Don't do it...period.

You can help her by lending her money to open an account tied to a credit card. That way, she can build her credit up by using the card, and paying it off every month. prior to our marriage, my wife filed for bankruptcy, and she rebilt her credit, by herself, to the point where her credit score is close to 800.

[Pogues]

If you're going to do this, and not being her parent or guardian I do not recommend it, $2,000 is WAY too much for someone that age to have as a limit on a credit card. $300 would be enough to start building that credit record, and if things go well you could bump it up to $500.

However, if you really want to help, as Horns said you can loan her money to get started. I would recommend she open a secured credit card. Essentially you give $300 or whatever to open the card, and she spends off of that money. Each month she pays back the $300 to maintain the credit limit, and help with building her credit.

As insane as this sounds, she should not pay off the balance every month. You actually want to carry a balance from month to month, and her credit will build up quicker.

So, don't pay minimums, don't pay it off, make payments on time, credit score goes up!

Over time, if she does a good job with the secured credit card, the company will offer her an unsecured credit card, probably with a low balance. Her, not both of you.

So think of it this way, you could help her get her own secured credit card by giving her a gift of $200-300, and not be on the hook if she screws up. If it's a gift, Unckie Wayne is a great uncle, giving her a nice "cash" gift, and her parents probably wouldn't be so upset.

You can give her a gift of opportunity to do what she wants.

[johnnya24]

Really bad idea.

[onejayhawk]

I have heard of worse ideas, but they all involve physical injury.

J

[TranaGreg]

I have heard of worse ideas, but they all involve physical injury.

J

Hey, it's still unclear, this could end up that way too!

[heyelander]

Hey, it's still unclear, this could end up that way too!

I did tell her at one point that I needed to find somethign with a low enough credit limit that if she screwed me I would just be really frickin' pissed and not have to kill her and bury her in the desert. (of course I think I spelled it dessert which makes it a bit less threatening sounding).

I offered to go horns'/Pogues' route. Loan her $200 to get a secured credit card, and she could pay me back when the card eventually converted to a regular card. Then the non-follow through thing I mentioned raised it's head and she said she would let me know in the spring when she is getting ready to go back to school. Win-Win for me.

[Fresno Bob]

I think you've got the right idea with the loan/secured card thing. The other thing to suggest to her is to get a student subscription to the Wall St Journal, credit cards offers will come flying in the mail to her after that.

[heyelander]

I think you've got the right idea with the loan/secured card thing. The other thing to suggest to her is to get a student subscription to the Wall St Journal, credit cards offers will come flying in the mail to her after that.

the concept of my cousin and the wall street journal in the same room boggles my mind.

I understand just having her name on the subscription list would be what you're aiming for here, but it's like suggesting my cat subscribe.