Joint Credit Card Applications and Co-Signing for a Loan

Information verified correct on October 1st, 2016
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There are many reasons a bank would deny an individual a loan or line of credit, and some are more valid than others.

Two people may consider entering into a joint credit application for a myriad of reasons. Perhaps a married couple is looking to purchase a home or vehicle together. Or maybe a father is helping his child get a first credit card to build responsible credit. Occasionally when some people attempt to open a line of credit or take out a loan, the bank will deny them for lack of credit or bad credit.

Those who are just starting to play the credit game have a slim chance of being able to take out a sizeable loan. Even if cell phone bills are paid on time and rent is always delivered a week in advance, in the banks’ eyes, these people haven’t proven yourself financially responsible. People caught in credit limbo are pretty much faced with a Catch-22. Those lucky enough to get a line of credit are usually plagued with high interest rates.

Or worse yet, you’ve been given a chance and failed miserably. You could have dug yourself into a hole, or extenuating circumstances might have arisen leaving you unable to pay your bills. Regardless of the situation, the bank is not impressed and won’t let you borrow any more money.

Sometimes the bank will suggest for individuals caught in these circumstances to have another person cosign as a protective measure. The cosigner in this case is not only vouching that the other can and will have the funds for payment, but should the other person default on the loan, he/she will be responsible for the repayment. Share with each other your detailed credit score to get an idea of each other’s financial history. Before entering into a joint agreement, whether it is for a credit card or loan, it’s important to understand the benefits and risks involved.

St.George Vertigo Visa

Low Rate Credit Card Offer

With the St.George Vertigo Visa you will receive a great low rate on purchases plus pay a low rate on any balances transferred from other cards. This card also allows you to apply for joint-account applications.

  • $55 p.a. annual fee
  • 1% p.a. for 12 months (reverts to 13.24% p.a.) on purchases
  • 0% p.a. for 18 months on balance transfers
  • Cash Advance Rate of 21.49% p.a.
  • Up to 55 days interest free
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Benefits of joint credit card or co-signing a loan

It should go without saying that you better have a healthy and open relationship for anyone you wish to mix money. Involving your partner financially, whether via joint credit card or co-signing for a loan, with purchasing big-ticket items such as appliances, cars or a home is a great way to lock in a competitive interest rate. Moreover, there are two of you to contribute towards repayment. Two parties can both expedite the process and/or lessen the financial burden for each other.

  • Debt consolidation

    Entering into a joint credit card gives two people the opportunity to consolidate their debts. Because two people are being held accountable, banks will be much more accommodating with larger lines of credit and a lower interest rate. Should the holders of the joint credit card live under the same roof, it’s an ideal situation for allowing both parties to pay for utilities or family memberships.

  • Sense of responsibility

    With joint accounts comes a new sense of responsibility. It is almost easier for a person to accumulate debt when he or she feels like no one else is watching. A joint account may make a person think twice about a purchase since both people are accountable for all charges put on the card. It’s one thing to tell your wife you’re going out drinking with the boys. But it’s another to put it on the credit card where your wife can see just how much you spent. Before a husband orders another round for his buddies, it just might make him consider “What would my wife think when she sees I ran up a $150 bar tab?”

  • Rebuild credit

    Joint agreements also prove beneficial when one person in the relationship is looking to build (or rebuild credit). If one partner has better credit than the other, it is not uncommon for the better credit partner to co-sign for a loan. This is dually advantageous:

    1. It allows the low credit person to receive a better interest rate
    2. It is an opportunity for the low creditor to build good credit.

Of course, consistent repayment will result in the increase of both co-signers credit score.

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Risks of joint credit card or co-signing a loan

Before entering into the agreement, examine how the potential co-signor handles finances. If he or she is already a financial disaster, meaning paying bills late or not at all, it’s strongly advisable to put down the pen and walk away.

Credit card rating

The biggest risk to consider when applying for a joint credit card application is that you are putting your credit card rating in the hands of the co-signer. Any debts incurred after signing that paper ultimately will affect your credit card score. This opens the door for the co-signer to accumulate debt and leave you responsible for paying for it.

Financial history

In addition to assessing the co-signor’s financial history, evaluate the type of relationship you two have. Marriages are easy to assess since you have already entered into a binding legal agreement. Long-term relationships give you ample time to see your partner’s spending habits. If you are considering co-signing with someone in newer relationships or even friendships, you may be operating on little information, which can be potentially dangerous. Familial relationships are of a completely different breed. Since you can’t choose your family like you can your friends and partners, treat these on a case by case basis.

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Conclusion

Regardless of the relationship you hold with the person asking you to co-sign, if the person on your joint credit card application is late in making payments, then it is also reflecting badly on you and your credit may be tainted.

There is a widely held belief that relationships and money should never mix— this adage includes cosigning on a credit card or loan. Should you end up with debt and the relationship destroyed, it could ruin your credit. It is always better to air on the side of caution with joint credit card applications. If you have no doubts that the co-signer can make the payments, then help the person out in good faith. If someone does ask you to co-sign and you are unsure, then you should say no, and leave it at that. It may be tough for a while, but a good friend, significant other or spouse will get past it.

Joint Account Credit Cards Comparison

Rates last updated October 1st, 2016.

St.George Vertigo Visa

Balance transfer and purchase offer have been extended until 4 January 2017.

September 30th, 2016

Bank of Melbourne Vertigo Visa Credit Card

Intro APR of 1% for 12 months and BT offer of 0% for 18 months extended until 4 January 2017.

September 30th, 2016

St.George Amplify Platinum

New bonus points offer of 30,000 upon sign-up which is valid until 4 January 2017.

September 30th, 2016

View latest updates

Jonathan Choi Jonathan
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
St.George Amplify Platinum
This card features a 30,000 bonus points offer, introductory interest rates on balance transfers and purchases and an annual fee waiver for the first year.
1% p.a. for 12 months (reverts to 19.49% p.a.) 0% p.a. for 18 months $0 p.a. annual fee for the first year ($99 p.a. thereafter) Go to site More info
Bank of Melbourne Vertigo Platinum
A platinum card with a low balance transfer offer of 0% p.a. interest for 18 months and 1% p.a. for 12 months on purchases combined with complimentary insurance covers.
1% p.a. for 12 months (reverts to 12.74% p.a.) 0% p.a. for 18 months $99 p.a. Go to site More info
Bank of Melbourne Vertigo Visa Credit Card
Enjoy a low annual fee combined with 0% p.a. balance transfer offer for 18 months and 1% p.a. for up to 12 months on purchases.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
BankSA Vertigo Visa
A low interest rate card with a low annual fee, a long term balance transfer offer of 0% p.a. for 18 months and an introductory offer of 1% p.a. for 12 months on purchases.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
Lombard 180 Card
Get 6 months interest-free on purchases of $250 or more, up to 55 interest-free days on purchases under $250.
0% p.a. for 6 months (reverts to 22.99% p.a.) 0% p.a. for 6 months with 1.5% balance transfer fee $99 p.a. More info
Teachers Mutual Bank Credit Card
No annual fee on your card plus a low interest rate on purchases.
7.9% p.a. for 6 months (reverts to 11.50% p.a.) $0 p.a. More info
Hunter United Visa Credit Card
Enjoy a low offer of for months on balance transfers. Plus a low annual fee of $59 p.a.
11.49% p.a. $59 p.a. More info
Bendigo Bank Black Basic Credit Card
Features a low annual fee and interest rate and get up to 44 interest-free days.
12.24% p.a. $45 p.a. More info
Bendigo Bank Ready Red Credit Card
Enjoy up to 44 interest free days after a purchase and no interest will be charged.
19.74% p.a. $45 p.a. More info
Bendigo Bank Platinum Credit Card
Get rewarded for every dollar spent plus up to 55 days interest free on your purchases.
18.99% p.a. $119 p.a. More info
Latitude 'Go' MasterCard
An everyday credit card with no annual fee plus you get free access to the GO Rewards program.
22.74% p.a. $0 p.a. More info
Latitude Eco MasterCard
An environment-friendly credit option with a low balance transfer offer of 0% p.a. for 6 months, fixed interest rates and flexible repayments.
22.49% p.a. 0% p.a. for 6 months $49 p.a. More info
Latitude MasterCard
Features low credit limits and annual fees, receive up to days interest free and 24.5% p.a. annual percentage rate for purchases and cash.
24.50% p.a. $69 p.a. More info
Bank Australia Visa Credit Card
$0 annual fee ever life and a long interest-free period to pay off your balance.
12.39% p.a. $0 p.a. More info
Hume Visa Value Credit Card
Enjoy a competitive low rate, no annual fee and up to 55 days interest free on purchases.
13.15% p.a. $0 p.a. More info
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6 Responses to Joint Credit Card Applications and Co-Signing for a Loan

  1. Default Gravatar
    aleks | April 2, 2014

    Do all credit card balance transfers only apply to new customers? And what happens to your credit rating if your application is rejected?

    • Staff
      Jacob | April 2, 2014

      Hi, Aleks.

      Thanks for your question.

      Generally speaking, the balance transfer promotions you see advertised on our site apply to new customers only. There are some balance transfer offers available to existing customers, however, the lender will make this known to existing customers as they become available. When you apply for a credit card, a credit enquiry mark is recorded on your credit file. Too many of these entries on your credit file in a short space of time can have negative implications for obtaining credit in the future.

      I hope this helps.

    • Default Gravatar
      aleks | April 4, 2014

      How many is too many?

    • Staff
      Jacob | April 4, 2014

      Hi, Aleks.

      There is no actual number we can tell you. It’s completely at the lender’s discretion. Common sense is the best approach here.

      Thanks for your question.

  2. Default Gravatar
    Talia | November 7, 2012

    Hi there,

    I was just wondering if any banks still offer the option for a second person to co-sign on a credit card?

    Thanks

Credit Cards Comparison

Rates last updated October 1st, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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