BACK

Expert Q&A

Co-signed card leaves mom’s credit in ruins

Summary

When her daughter couldn’t pay the bill, collectors turn to her mom

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Question

Dear Sally,
I recently found out that a store credit card I had my mother co-sign for was put under her Social Security number as the primary cardholder instead of me. This was never an issue until I was unable to keep paying my monthly payments due to illness and unemployment. It was eventually sent to a collection agency and she was contacted. I was unaware of the store’s mistake in putting my mom as the primary cardholder until one day when we were shopping.

This late credit card bill has affected my mother’s account negatively. I called the collection agency and told them I was the owner of the debt. She has not once used this card or account. I want this debt under my name only and her removed from all this mess. How can I achieve this?    — Cheryl

Answer

Dear Cheryl,
It wouldn’t have made much difference if the store had called you the primary cardholder instead of your mother. The important thing is that she co-signed with you, which means she took 100 percent responsibility for the card balance if you did not pay. The store doesn’t care who used the card, or what was purchased with it. The store extended the credit for your purchases based on your mother’s financial information and good credit history.

Having your mom co-sign made it easy for you to get the card, but it’s a problem when you can’t pay. Because you have hit hard times with illness and unemployment, you may be a candidate for Chapter 7 or Chapter 13 bankruptcy, or negotiating the balances on your debts. However, with your mom’s signature on your card balance, the store would just move on to your mom and try to collect from her. If she doesn’t pay, her credit history and score will be damaged just as if she had opened a card she considered to be her own. As the interest fees and penalties pile on, the amount she owes will continue to go up.

In hindsight, people shouldn’t co-sign any loans that they would be unable or unwilling to pay themselves. It was nice of your mother to help you, but it sounds like neither of you quite understood how co-signing really works. I wish I could offer a better answer for you.

If you can possibly scrape together the money to pay the bill, that’s the only way to get rid of it and spare your mother the consequences of this debt. If your health and earnings prospects have improved, perhaps you can start paying more on the debt to put it behind you as quickly as possible.

It’s important that you and your mom discuss this problem. She needs to understand, if she doesn’t already, that you can’t just have her removed from the card or the bill until the balance is paid off. She should also understand that if she doesn’t pay it, the unpaid bill will affect her credit the same way it would if she had spent the money herself. If she is in a position to do so, she may want to pay off the debt to stop penalties and interest from accruing, and to salvage her credit history. You could then make payments to her, instead of to the collection agency.

If you have many debts that you cannot resolve, please visit a credit counselor. I recommend finding a nonprofit agency affiliated with the National Foundation for Credit Counseling or the Financial Counseling Association of America. They can help you find the best way to resolve your debts and take control of your financial life.

See related: 4 questions to ask before you co-sign on a credit card, Primary accountholder, authorized user: There’s a difference

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Expert Q&A

Car lien shouldn’t come as a surprise

People just can’t randomly attach liens to your property without notice

See more stories
Credit Card Rate Report Updated: July 2nd, 2020
Business
13.91%
Airline
15.48%
Cash Back
16.09%
Reward
15.82%
Student
16.12%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.