Can I Remove Myself as a Credit Card Co-Signer?
By Eva Norlyk Smith Ph.D.
May 6, 2013
When my son was in college, I co-signed a card for him. That was more than two years ago. He's done a good job of charging only a little and paying it off. I know, because I keep an eye on the account. He's going to graduate this May, and I don't think I need to share a card with him anymore. Can I get myself off the card? If not, do you think he can get a card on his own? I was happy to be on a card with him while he was in school, but I don't think that's appropriate now that he's an adult. But at the same time, I don't want to hurt his credit. — Darla
Co-signing a loan or credit card is a wonderful gesture to make for a loved one or even a friend, but as too many people experience the hard way, it can quickly get dicey.
When you co-sign, you take equal financial responsibility for the loan or credit card balance if the primary account holder doesn't pay. The credit account will be reflected in your personal credit history as well. This means that any late payments or high credit card balances would also weigh down your credit score.
In your case, fortunately, it sounds like the story has a happy ending. Obviously, co-signing the card has been a good move, and it has helped your son make his first step down the road of establishing an independent credit history. This is co-signing at its best, and what it is intended for.
Card issuers are reluctant to remove co-signers because it means letting go of an extra layer of security for the credit line. However, in your case, since there is no balance on the credit card, this is less of an issue. To remove yourself from the card, you can pursue one of the following two options.
1. Your son can apply for a new credit card and then close the old one. Because your son has had two years to build up his own credit report, it should not be difficult for him to apply and get accepted for another credit card with another card issuer. Once he gets the new card, he can simply close the old one. The positive payment history associated with the current card will not get erased; it will stay on his credit report for 10 years and continue to benefit him.
2. Ask the card company to remove you as a co-signer or to open a new account for your son. While the card issuer may not be motivated to remove you as a co-signer, it may be eager to keep your son as a cardholder, particularly with his stellar history of card usage. You can play this to your advantage to get the issuer to remove you from the account or close it and open a new card for your son.
Simply call the issuer and tell them you and your son are thinking of closing the credit card account and applying for a new card with another issuer because you no longer want to be a co-signer on the account. Then ask if they have any other options they would recommend. To keep your son's business, they might suggest a way for you to get removed as co-signer on the card, or offer to issue your son a credit card account on his own and close the current one.
The more specific you can be in terms of your plans for opening a card with another credit card company, the more leverage you will have. Ideally, reference the alternative credit card your son is thinking about applying for, so they know you mean business.
If the card issuer does offer to simply release you from your co-signer guarantee, be sure to get the release in writing, and keep that letter in a safe place.
In terms of the effect on your son's credit score, you don't have to be too concerned. Neither approach will affect his score that much. The positive payment history associated with the current card will stay on his credit history for a while, and as long he continues his good credit management behaviors with his new card, the effect on his score from the change will be negligible. Assuming he's not planning on applying for a major loan anytime soon, he will have plenty of time to continue to build an excellent credit score with his new card.
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