I have excellent credit myself, but I have on my account an additional cardholder (family) whose credit isn't so spectacular. (They only use the card for emergencies and always deposit cash in my account within the month, so it's not a matter of trust—they're open with me. I'm just curious how much of their actions affect my own reputation.)

Take the worst case (or at least, what I think is the worst case): they declare bankruptcy. How would that affect me? I would hope that it wouldn't affect me at all, as long as I'm paying what's due.

Thanks in advance.

  • With additional cardholders, isn't this your account? You are just allowing other people to spend on it. Is it the case that you and only you are responsible for paying? If so, then I expect that the issuer doesn't care who the additional cardholders are - they will come after you and only you for payment. – DJClayworth Jan 11 '13 at 16:21

There are two kinds of 'additional cardholders' on a credit card. With most, you simply permit someone else to charge payments to your account as if they were you. You are entirely responsible for settling the accounts. If this is the case (and it looks from your comments as if it is) then their credit score won't matter. What will matter is whether or not you settle any charges they run up. They will be treated as if you had spent that money.

The less normal kind is where the credit card account is in a joint name. Normally in that case the credit card company will have already checked the credit records of a co-applicant. Any problems with the account will reflect on both of you.

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It will not affect you at all as long as all the accounts you're cosigned on are paid in full and on time, without defaults or delinquencies. Whatever you have not cosigned - has nothing to do with you at all.

You might want to consider removing them from your account, though, so that the creditors from their bankruptcy won't come after you.

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    I don't know anything about bankruptcy. Can they legally come after me? It's not like I ever borrowed their money. (This is a separate question I guess, so if it can't be answered briefly then please don't worry about it.) – Andrew Cheong Jan 10 '13 at 22:56
  • I'm not a lawyer, I don't know if they can come after you. But they can come after any account the bankrupt person has authority over. – littleadv Jan 10 '13 at 22:57
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    "so that the creditors from their bankruptcy won't come after you." - this sounds right for joint asset e.g. saving account. If I have my sibling as authorized used on my card, I agree to pay what she charges on that card, not an unlimited liability on what else she does (on other cards or credit accounts). Those creditors can't come after me based on this one relationship. – JTP - Apologise to Monica Jan 11 '13 at 2:16
  • I don't think the questioner asked about cosigning - isn't this about giving someone else a card that they can use to draw on your account? – DJClayworth Jan 11 '13 at 16:22
  • @DJClayworth - Yes, I just created a card with their name on it. But I don't know if that's like an "implicit" cosigning. I imagine not, since I did it over the phone and the process was informal; something like cosigning would be more formal, right? – Andrew Cheong Jan 11 '13 at 16:24

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