C'mon, Mom! Co-signed credit cards return in wake of reforms


One of the better provisions in the forthcoming credit-card reform legislation is a push to making it harder for students to get potentially ruinous access to too much credit. As you might suspect, the credit-card industry is looking for ways around that, and one trick it's come up with is bringing back co-signed credit cards.

According to this article, Discover is launching a co-signed credit card that will be available by the time the credit-card reform provisions kick in, and Capital One is also considering rolling one out. Four other major banks queried offered only a "no comment" in response to the question; a finance-industry trade group spokesperson suggested that many banks will consider co-signed cards in the near future if they're not already.

As cards go, co-signed cards are a whoppingly poor idea. In a nutshell, the co-signer doesn't get to use the card, but he or she is the one responsible if the person whose name is on the card flakes out and doesn't make their payments.

Imagine having to scarf down someone else's wilted green beans at Christmas dinner; in return, they get to eat all of your pie. If it sounds like a raw deal, it is. Nearly every reputable consumer-credit advocacy group advises consumers to run, not walk, away from this option.