Why families shouldn't share credit accounts
Dear Credit Guy,
Many, many years ago, my mother requested an extra card on her bank card
account so that I could renovate a house for my grandmother. We live 1,500
miles apart, and this seemed like a logical answer. Now, 20 years later, she has
$10,000 in debt on the card and my name appears as co-owner, so to speak. Except
for the three or four months I was working on the house, I have never had a
copy of the card, nor did I agree to this arrangement. I don't feel I should be
held responsible for debt I did not incur on a card I did not approve or apply
for. Is there any resolution for this problem?
-- Gayle
Dear Gayle,
The first thing you need to do is to
determine your level of responsibility for this account. From what you
have written, it sounds as if your mother requested that you be added as an
authorized user on her existing account. Unless you jointly applied for the
account with her when the account was originally opened, most credit issuers
will not add persons to an existing account as a responsible party or joint
owner. That would require applying for a new joint account and signing a
cardholder agreement. So, if that did not happen, it is likely that you are
only an authorized user on the account.
I'm not sure what you are viewing that
you believe shows you as a "co-owner," so it's smart to double-check how your
name is listed on the account. To do this, I recommend that you review your credit reports from each of the three major credit bureaus. You are entitled to
a free copy from each bureau once every year (in some states you are entitled
to extra free copies each year) and can order copies of your reports at
AnnualCreditReport.com. Once you receive your reports, check the account
listings for your mother's account. Each of the accounts listed on your report
will be identified as individual account, joint account, authorized user, etc.
If my suspicions are correct, and you
are listed as an authorized user on the account, you are not financially
responsible for any balance due on the account, but your credit can still be
negatively affected if the account is not in good standing. My recommendation
would be to request that you are removed as an authorized user,
regardless of the account standing. In most cases, the authorized user can make the request from the card issuer to be removed. Once your name is removed from the account, it will no longer be
reported to the credit bureaus.
Should you be listed as a joint owner
on the account on your credit reports, you will need to contact the card issuer
and request that they send you a copy of the cardholder agreement with your
signature. If you are indeed a joint owner on the account, you can be held
financially responsible for any charges on the card, even if you did no make
any of them.
It might be time to have a frank
discussion with your mother about the account and your role on it.
Handle your credit with care!
See related: Authorized users aren't liable for card debt, Authorized user or joint account holder?, Piggybacking can backfire
Kim McGrigg is the community manager for Money Management International, the largest nonprofit, full-service credit counseling agency in the United States. You can find more money management advice on Blogging for Change and MMI's Facebook page.
Credit Care answers a question about a debt or credit issue from a CreditCards.com reader each week.
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Published: April 18, 2011
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