To close CC or not?

Trying2save · #1 (**permalink**) 10-31-2009, 07:27 PM

When I was in college I was unable to get a credit card. My mom co-signed with me, and I had a limit of $500 on the card. She never uses that card but her credit is kinda of going downhill, she doesn't know how to control her money. Anyhow, I don't want my credit to go down the tubes bc of her -I have my own credit cards now, but still have this one as a co-owner. I never use it and they keep sending me one, when the expiry date comes around - should I cancel it and will it hurt my credit score? Even if I'm listed only a co-owner? Will cancelling it hurt my mom's score further?

Any comments would be helpful.. I'm in Canada if that makes a difference. Thanks.

maat55 · #2 (**permalink**) 10-31-2009, 09:21 PM

I would cancel it. You do not need an account with your mother.

Seeker · #3 (**permalink**) 11-01-2009, 04:44 PM

If you really want to keep the card, then you have another alternative of calling them and asking if they could take off your co-signer. You probably can qualify on your own now, and they should not give you any backfight. If they do, then yeah, just cancel.

EconoMutt · #4 (**permalink**) 11-01-2009, 06:04 PM

Quote:

Originally Posted by Trying2save

When I was in college I was unable to get a credit card. My mom co-signed with me, and I had a limit of $500 on the card. She never uses that card but her credit is kinda of going downhill, she doesn't know how to control her money. Anyhow, I don't want my credit to go down the tubes bc of her -I have my own credit cards now, but still have this one as a co-owner. I never use it and they keep sending me one, when the expiry date comes around - should I cancel it and will it hurt my credit score? Even if I'm listed only a co-owner? Will cancelling it hurt my mom's score further?

Any comments would be helpful.. I'm in Canada if that makes a difference. Thanks.

Does your mother have other credit cards beside the one you mentioned?
If so, then I would cancel the card.

disneysteve · #5 (**permalink**) 11-01-2009, 06:12 PM

Quote:

Originally Posted by EconoMutt

Does your mother have other credit cards beside the one you mentioned?
If so, then I would cancel the card.

Why does it matter if she has other cards? Whether she does or doesn't, OP needs to cut the ties with her to avoid having her financial problems affect him/her.

Seeker · #6 (**permalink**) 11-01-2009, 07:07 PM

Hmmmm.

Co-signer and Co-owner are two very different things. I re-read this again and am changing my response.

You're the co-owner -- which mean that it's her credit card and her account.

If I were you, and really wanted to stay with this CC company.... I'd call them and cancel my co-ownership of this card and apply under your own name/history.

disneysteve · #7 (**permalink**) 11-01-2009, 07:33 PM

Quote:

Originally Posted by Seeker

Co-signer and Co-owner are two very different things.

What's the difference?

Seeker · #8 (**permalink**) 11-01-2009, 07:57 PM

Co-signer is one who supports you and will backup you if you cannot or don't make payments. Generally a co-signer does not have a physical CC as a co-signer. They are just a supporter... co-signer usually does not accumulate more debt.

That's was how I interpreted the question at first.

Owner is someone who has the account as owner (the "Primary" in CC terminology) and adds someone else to it (the co-owner). The co-owner in this case, may not be "authorized" to make changes, however since there's no debt on the card, she/he should be able to get themslves off of it.
Usually the "owner" must request the change...

Trying2save · #9 (**permalink**) 11-01-2009, 08:01 PM

I actually already have my own CC's under my name, which I've had for at least 5 years now.

I wll put a call in and see if they can take me off as a co-owner.

Thanks everyone!

disneysteve · #10 (**permalink**) 11-02-2009, 06:55 AM

Seeker, for the purposes of this question, does it matter to OP if the mother is a co-signer or co-owner if her credit worthiness deteriorates? Would OP be affected the same either way?

EconoMutt · #11 (**permalink**) 11-02-2009, 08:03 AM

Quote:

Originally Posted by disneysteve

Why does it matter if she has other cards? Whether she does or doesn't, OP needs to cut the ties with her to avoid having her financial problems affect him/her.

I was concerned that this might be the only credit card the mother owns.
If so, the mother might be put in a bad position if that card is cancelled.
I would give the mother a head's up before cancelling.

Seeker · #12 (**permalink**) 11-02-2009, 09:14 PM

Quote:

Originally Posted by disneysteve

Seeker, for the purposes of this question, does it matter to OP if the mother is a co-signer or co-owner if her credit worthiness deteriorates?

DS, if Mom were a co-signer.... she could not add to the debt at all. Mom's situation would not affect OP whatsoever. Lenders do not go to a co-signer unless there's a problem with collections with the owner.

OP worded the original posting both ways and you all were answering as if it would affect daughter, and that's why I got confused.

But ultimately, the OP is not talking about her own account. She IS talking about her Mom's account.... and thus, yes absolutely, she (the daughter ) would indeed be affected if Mom were to use that account and not pay that debt.

Quote:

Would OP be affected the same either way?

No, it's NOT the same.

A co-signer has no way to added to the debt of an original holder of the loan. Mom cannot add to the debt if she were a co-signer.

Co-owners do indeed both affect each other. It's a partnership of debts.

Seeker · #13 (**permalink**) 11-02-2009, 09:32 PM

Quote:

Originally Posted by Seeker

A co-signer has no way to added to the debt of an original holder of the loan. Mom cannot add to the debt if she were a co-signer.

Co-owners do indeed both affect each other. It's a partnership of debts.

Co-Signer means == Daughter's account (owner) and Mom will support any debts (or try to) if Daughter cannot pay (co-signer). Another person from the lender's perspective to go to. But the account is the daughter's. Mom cannot add charges to it in any manner.... no matter Mom's financial situation.

If anyone in college submitted a CC application and had to get their folks signature and did so, and got credit.... then those folks would be supporting son/daugter -- they'd be co-signers. Their son/daughter would be owner.

----

Co-owners both have cards, both have rights, and both must make it right if defaults occur on either side.

disneysteve · #14 (**permalink**) 11-03-2009, 10:42 AM

Quote:

Originally Posted by Seeker

Co-Signer means == Daughter's account (owner) and Mom will support any debts (or try to) if Daughter cannot pay (co-signer). Another person from the lender's perspective to go to. But the account is the daughter's. Mom cannot add charges to it in any manner.... no matter Mom's financial situation.

If anyone in college submitted a CC application and had to get their folks signature and did so, and got credit.... then those folks would be supporting son/daugter -- they'd be co-signers. Their son/daughter would be owner.

I understand that the cosigner can't add to the debt. What I'm wondering is if the cosigner's credit rating affects things. Isn't the whole point of a cosigner to grant the credit based on their rating since the actual applicant doesn't have a sufficient credit history to get the card on their own? If the cosigner's FICO drops, would that affect the account, raise the interest rate, lower the limit, etc?

fe2o3ez · #15 (**permalink**) 11-03-2009, 11:00 AM

This is kind of a twisted circumstance. Usually, the co-signor is the one who has their credit affected by the original applicant defaulting on a debt. In this case, though - probably because it is a co-owner - it is the original applicant that is being adversely affected by the fate of the co-signor. That seems just wrong, on so many levels. But I suppose the idea of a co-signor is to have a secondary path for the credit issuer to recover its finances.

Seeker · #16 (**permalink**) 11-03-2009, 03:26 PM

Quote:

Originally Posted by disneysteve

I understand that the cosigner can't add to the debt. What I'm wondering is if the cosigner's credit rating affects things. Isn't the whole point of a cosigner to grant the credit based on their rating since the actual applicant doesn't have a sufficient credit history to get the card on their own? If the cosigner's FICO drops, would that affect the account, raise the interest rate, lower the limit, etc?

Only up front. At the time of co-signing. Not later on.

Not unless daughter defaults and Mother is asked to pay.... daughter could further affect mother... but mother cannot do anything to affect daughter if she were a co-signer. Daughter would also very easily be able to remove Mom from the account at a later time.