Joint Cardholders Building Credit

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Reader Carl recently asked me whether or not you build credit with a joint credit card:

I’m a nineteen year old guy, and opened my first credit card account at Best Buy, in order to buy a laptop for school, along with other “necessities.” Mind you, this was in 2009, and it was incredibly hard to find credit, so I had to co-sign with my dad.

Now I hold a total of three credit cards: Best Buy, Express Clothing (my first independent credit card), and my Bank of America Visa card. My BB card has a $2,300 limit, Express $250, and Boa $2,000. During a recent conversation with one of the bankers at BoA, they informed me that my BB card really doesn’t help my credit report, as it’s not necessarily my “own” credit card. Should I close the first account, and attempt to reopen one in only my name?

I disagree with the bankers at BoA, the BB card does help your credit report because you are a joint accountholder on the card. You and your dad are both on the hook for the debt and it’s reported on your credit report. Many students are put on as authorized users on credit cards, because they can’t get their own, and even that (they aren’t even responsible for the charges) helps build your credit report.

Another point that they should’ve said is that with the Express Clothing and BoA card, you don’t need another credit card for credit building purposes. I suspect their comments may have been spurred on by a desire to sign you up to another BoA credit card! (or Carl misunderstood)

At this point, the best thing you can do to help your credit and credit score is to use the cards responsibly. Stay within your limits, pay off your balance in full, and don’t do anything silly. 🙂

{ 8 comments, please add your thoughts now! }

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8 Responses to “Joint Cardholders Building Credit”

  1. Jim: A joint card holder benefits only if the card company required that he supply his SS# and then reports activity against that SS#. Some card companies only require a SS# from one account holder and if was his Dad’s, he gets no benefit.

    Being an “authorized user” is different. In almost all cases, no credit history is reported for an “authorized user” because a SS# is not required.

  2. I can verify that being an authorized user on my dad’s Speedway MasterCard has affected my credit. I just checked my credit report and there are only three entries: Speedway (Chase), my own Discover card, and my Stafford student loan.

    I’m 99% sure my dad never gave Speedway/Chase my social when he requested the card.

    It’s definitely helping my credit score because the limit on the Chase card is $10,000, making my credit utilization extremely low.

  3. I believe that the recent CARD act changed this, and now authorized users are reported to credit bureaus.

  4. As I understand it, the importance of keeping the card has to do with history you have developed with it as well. Since it’s the card you have had the longest I would keep it for that reason. The way you say co-signed makes me believe it is on your credit too. My mother helped me get my first credit card that way too. It has been on my report forever. Good Luck.

  5. The wide array of answers here got me curious and I did some poking around. Here’s the deal:

    Co-signers are the same as joint card holders. Both the primary card holder and the cosigner are 100% responsible for all transactions on the card. Therefore both can end up liable for the debt, no matter who actually used the card.

    Authorized users may or may not benefit from being authorized on a card. Some companies report it to the bureaus and some don’t. There’s nothing set in stone.

    Authorized users should check their credit reports carefully. They have no legal responsibility to pay off such cards but any negative behavior of the primary holder could potentially end up on the authorized users credit report. In addition, some creditors have chased authorized users for the card holder’s debt. If that happens to you and you don’t answer the summons, the debt becomes yours through judgement.

    Keep a close eye on cards when you are an authorized user. You have no obligation to pay but that doesn’t mean you couldn’t get stuck with the bill.

    The CARD Act really has little affect on this issue. Those under 21 who cannot establish the ability to pay on their own MUST have a cosigner to get a credit card. But the Act makes no changes to how the rules play out for authorized users versus cosigners.

  6. Martha says:

    I found that out too! On my credit report it says that I’ve had a capital one card as long as I’ve been alive… and I’m sure that helps my credit score!

  7. Shirley says:

    I was an authorized user on my parents’ accounts at B of A, and those accounts and their address show up on my credit report. Thank goodness my dad was one of the old school who would rather be ’20 minutes early than one minute late’.

  8. live green says:

    I was on a joint credit card with my parents from when I was in high school. It really helped my credit because of the good history I had with it. When I went to check my credit report a few years back, I noticed that the card was no longer there. I’m not sure why that is the case since my parents still use the card. I have no idea why it dropped off, but it did end up hurting my score.

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