Which Credit Cards Allow Co-Signers?

In years past, college students could pick up new credit cards like bags of potato chips. Since Feb. 22, 2010, however, getting a credit card under the age of 21 hasn't been as easy. The Credit Card Accountability, Responsibility and Disclosure Act of 2009 prevents credit card issuers from issuing cards to underage consumers unless the applicant has a co-signer or can show "an independent means of repaying any obligation."

For young adults without jobs or assets, co-signing or becoming an authorized user on a parent or guardian's account is the only way to obtain a credit card in their own name. Co-signing differs from sharing an account with an authorized user in that both parties are jointly liable for repayment, while an authorized user isn't legally responsible for the debt.

Not All Issuers Allow Co-Signing

Despite the fact that co-signing is one of the only ways for young consumers to obtain a credit card, not every card issuer allows consumers to apply with a guarantor. Bankrate.com surveyed some of the largest card issuers and found that some simply don't permit co-signing.

This may be because some institutions might be reluctant to deal with "the logistics" of servicing joint accounts, says Dennis Moroney, research director of bank cards at CEB TowerGroup in Needham, Massachusetts. With authorized users, he says, "there's no question about who owns the debt."

Check With the Card Issuer

Most people younger than 21 years old can qualify for a credit card without a co-signer, says Nessa Feddis, senior vice president and deputy chief counsel for Consumer Protection and Payments at the American Bankers Association.

"Many people under 21 have part-time jobs or assets. They work during the summer, earn money, and so, would therefore be eligible for a card," she says.

When co-signing is the likelier route, call ahead to the bank or credit union before applying to find out what the process involves. It may be a matter of submitting an application and letting the issuer decide whether a co-signer is necessary.

"If they do not qualify for the Visa with their income, then we can offer them a Visa with a co-signer," says Suzie Hagardt, lending systems administrator at Rivermark Community Credit Union, in reference to applicants younger than 21. "We would use the income from the co-signer to qualify them."